Author: VD

The $30 trillion demand gap

The good news: outstanding credit is still growing. L1 grew 0.69 percent in Q1-2014. This is still credit disinflation, as it is below the 60-year 2.36 percent quarterly growth rate, but it is not outright deflation.

The bad news: all of that growth comes from the federal and corporate sectors. Household was positive flat, state and local government was negative flat, and financial went negative again after five months of being positive flat. The worse news is that the credit demand gap is growing; it has now reached $30 trillion.

In other words, that’s how far off the US economy is from one that continued at its 60-year pace of growth. That’s why things look and feel so terrible despite the nominally positive economic statistics. Were it not for the $2.4 trillion in new corporate debt and the $7.1 trillion in new federal debt since 2008, the ongoing state of economic depression would be obvious. As one can see from the chart, there is absolutely no indication of any recovery for either US households or US financial institutions.

So, there are two obvious questions:

  1. How much more debt can the Fed force-feed the federal government and the corporations before they can’t service it?
  2. Will that new debt be a) defaulted or b) rolled-over when it becomes due?

The idea was that federal debt-spending would jump-start the two more important sectors. But not only has that not happened, but now the two government sectors combined are larger as a percentage of the total than either Household or Financial sectors. And at the current rate, the Federal sector alone will be bigger than the Household sector by Q2-2015 and the Financial sector by the end of next year.

And the really bad news? Of the $13.1 trillion in Household debt, 8 percent of it is student debt. Which means the credit demand has been pulled forward, as those indebted students are much less likely to be able to take on credit card, auto, and mortgage debt in the future. In fact, without the tripling of student loan debt in the last decade, the Household sector’s decline would be twice what it is now: it would be 10 percent credit deflation despite a growing population.

Data released by the Federal Reserve Bank of New York suggests that the relationship between student loan debt and the housing market has turned ugly fast. People with student debt used to buy homes at higher rates than peers who had not taken out loans, partly because going to college meant earning more money, according to the report.

But in 2012, the New York Fed reported that for the first time in at least a decade, 30-year-old student borrowers were less likely to take out home mortgages than other young people.  Among people around 30 years old, homeownership was plunging fastest for student debtors.

Having already devoured the weak, the starving debt-predators are now being forced to devour the young before they are capable of being safely milked for decades.

Vaccine “safety”

The testing of vaccines is nowhere nearly as extensive as most people erroneously believe it to be:

Mick and Kirsten Button’s daughter Saba was just 11 months old when she received the Fluvax shot in April 2010. The then toddler suffered a hypoxic brain injury, kidney, liver and bone marrow failure. She can now no longer walk and talk and needs round-the-clock care. Three days after Saba was admitted at Princess Margaret Hospital, Fluvax was recalled. It is now banned for children under five….

In the claim the Buttons alleged Fluvax was defective after testing conducted by the company prior to April 2010 identified fever as a serious side effect of the 2010 batch. However the company denied liability then filed a cross-claim against the State of WA and the Health Minister. In return the State of WA filed a defence to the cross claim denying any liability. Settlement was reached between CSL, the State of WA and the family during recent mediation….

After Saba was admitted to hospital in 2010, it emerged there had
been more than 100 adverse reaction presentations to the vaccination at
PMH that flu season. But this information wasn’t passed on to the general public until after Saba was in the intensive-care unit.

The fact, the undeniable fact, is that vaccine companies have tremendous financial incentive to cut corners on safety, since they are not legally liable for their products in the USA. And what little information on the dangers exists is not, for the most part, available to the public. This combination of limited liability and limited information is bound to result in undesirable consequences.

The price of war

I posted this 10 years ago. I think it is still relevant today.

The price of war does not stop being paid when the guns fall silent.
This was driven home to me when we bought our first house from an older
couple who had lived there for many years. My grandfather, a Marine
who’d fought on Guadacanal and Tarawa, recognized the home seller as an
Army veteran and asked where he had served.

 

In Europe, the man answered, and his eyes filled unexpectedly with
tears. He turned away for a moment, and then, composed again, he
apologized and explained that he’d lost his brother in Normandy. This
conversation was taking place 53 years later, but it was clear that the
pain still lingered.

It is almost impossible for us, sixty years later, to understand the
grim realities of D-Day. Yes, we are unfortunate enough to live in
what a Chinese sage described as the curse of interesting times, and
yet, we do not yet live in a real state of war. Most of us know a few
soldiers who are involved in the present conflict – I was relieved to
receive an email yesterday from my Italian cousin in Baghdad, telling me
that he was fine after the embassy attack – but it is not the vast
majority of young men of our acquaintance who are in uniform and in
danger as was the case back then.

A few years ago, I took part in a massive simulation of Gold Beach,
using the Advanced Squad Leader system. Each player was responsible for
a section of the beach; I was commanding three companies of British
troops plus 12 Shermans and a few funnies. The experience drove home
how a relatively small number of defending German troops were able to
inflict terrible casualties on the landing Allies, and it was sobering
to see the pile of cardboard casualties grow and realize that each piece
represented the lives of ten men.

To the left, I lost an entire company, and only a lucky shot and a
wildly aggressive charge by one Sherman commander allowed me to take out
the two AT-guns defending my attack sector and get the two surviving companies off the beach. It
was only a game, and yet, one could see how the valiant action of a single brave man could make all the difference in the world to the rest of the men involved.

In the end, after many hours, the Allies triumphed on the table just
as they had many years before on the real beaches. But there was no
celebration by the winners, instead we found ourselves standing quietly
around the massive array of maps, contemplating those who had fought and
died so long ago. Some may think that it is strange and silly, if not
downright disrespectful, to view the tragic loss of human life through
the lens of a wargame. But, sixty years later, this is the only lens
that many of us have.

Soon, all the young men who stormed Normandy will be gone. But as
long as there are other young men who are curious about history, who
want to know what happened when, where and why, neither they nor their
sacrifices will ever be forgotten.

Negativity

The European Central Bank goes negative on interest rates:

The European Central Bank broke new ground yesterday; it became the first of the monetary superpowers to cut its deposit rate below zero. This is truly desperate stuff. That nearly six years after the collapse of Lehman Brothers, Europe is still belatedly trying to address the twin afflictions of deflation and economic depression tells you as much about the political paralysis that grips the euro area as about the severity of the crisis.

These are not uncharted waters. Denmark and Sweden have experimented with negative nominal interest rates, and in any case, the difference between minus 0.1 per cent and the pre-existing deposit rate of zero is so marginal as to be almost irrelevant. Certainly, it’s hard to see why, beyond symbolism, it would make much difference to the eurozone’s beleaguered economies, even combined with other measures announced by the ECB on Thursday to ease credit conditions.

None the less, it is quite something when bankers actually have to pay a fee for the privilege of parking their money with the central bank, which is the effect of a negative deposit rate.

It’s important to keep in mind that this is the interest rate paid to bankers by the central bank rather than the interest rate paid to depositors by the banks. Remember, the banks are just borrowing those loan-deposits from the public, so they will still compete on the interest rates they pay. There is a relationship between the two interest rates, of course, but it is not a fixed ratio. Depositors have to worry about bail-ins and manufactured fees more than they have to worry about the interest rates on their savings account going negative.

However, it is indicative of the strong grip that Keynesian economics still has on the central bankers. They are still trying to figure out the best way to fine-tune the magic financial remote for the economy, little realizing that they are the equivalent of children pressing buttons on an outdated remote for a cathode ray tube television, with no batteries in it, pointing it at a flatscreen and wondering why it doesn’t work.

Everything revolves around the concept of the demand gap, and the idea that more liquidity will cause people to spend more. But credit money requires someone, somewhere, to borrow something and while one can print money, one can’t print borrowers. As Americans learned in 2008, even if one creates a new class of borrowers by loosening the standards, they tend to fall behind on their payments and default so rapidly that it would be better to have never loaned them money in the first place.

As usual, the central bank is belatedly reacting to events; it isn’t controlling them. This is merely another indication – not proof, but an indication – that the global economy is in a deflationary scenario rather than the inflationary one most people tend to assume. The takeaway: don’t add to your debt with the assumption you’ll be able to pay it off with cheaper currency.

“Opera” on Amazon

Tor is giving away its various Hugo nominees for free on Amazon today, so I thought it might be a good idea to follow suit. The Hugo-nominated “Opera Vita Aeterna” is now available on Amazon for 99 cents, and it will be given away as a free download as soon as Kindle Select permits. If you’ve read it, I encourage you to post a review there; if nothing else the contrast between the pinkshirts’ reviews and everyone else’s should make for some entertaining reading.

In other Castalia House news, we will be introducing a number of new bloggers in the next two weeks as part of our long term plan to become the leading SF/F destination site. The release of John C. Wright’s latest masterpiece, a real mind-bender, will be taking place this month, and just in time for the World Cup, both QM:AMD and QM:GK will be published in Brazilian Portuguese next week.

Speaking of Amazon, the good news for readers is that they appear to be winning their showdown with the publishers to keep book prices low. From Publishers Weekly: “A spokesperson for Hachette Book Group has confirmed that they initiated a round of layoffs today.”

The consequences of an atheist morality

John C. Wright has entirely too much fun deconstructing what passes for the logic of an altruism-based morality of the sort advocated by midwitted atheists who genuinely believe Richard Dawkins is a formidable philosopher:

Now, the most common and most persuasive argument an atheist or materialist can make in favor of universal morality is a genetic argument. The argument is that, as a matter of pure game theory, any races and breeds that develops a gene which imposes an instinct for altruism toward other members of one’s own bloodline, will, as a matter of course, have a definite statistical advantage in the lottery of Darwinian survival, and will come to outnumber those races and breeds that do not.

The argument is that the purely blind and selfish drive of the genes we carry in us therefore mesmerizes us with an instinct to altruism and self-sacrifice which is not in our immediate self-interest, but unintentionally serves the self-interest of the family, clan, tribe, breed, bloodline, and race.

The argument is that this mesmeric spell makes us hallucinate that there is such a thing as a moral code we are bound to obey, but whether this hallucination is true or false, it serves the blind and selfish reasons of the parasites called genes dwelling inside us, whom we much, willy-nilly, serve and obey.

Putting this argument to the test, I asked a hypothetical question about the following rule of behavior:  “Abducting Nubile Young Woman to Serve as Concubines, Dancing Girls, or Breeding Stock is bad.” Is this a rule that bind only those who share the non-abduction gene, or does it bind all men, including those with not one gene in common with us? I used the hypothetical example of an abductor who is a Man from Mars. He is not of our tribe, nation, or race. He is, at least during the Obama Administration NASA days, beyond the reach of any reasonable expectation of retaliation from Earthlings.

Is it objectively wrong for the Martian Warlord to abduct a luscious Earthgirl like Yvonne Craig to his horrible harem of terror atop Olympus Mons? Or is it only wrong because the Selfish Gene says it is wrong? Is it wrong objectively, or only genetically?

(Of course I mean to use this as an excuse to post more pictures!)

The genetic argument as a basis of morality makes me laugh until I puke green foam from my nose. It is obvious enough that if my instinct for altruism is proportional to how many selfish genes I have in common with another, that I will always prefer my self over my brother, my brother over my cousin, my cousin over my second cousin, my family over my clan, and my clan over my race, and my race over the Slavs and Jews and Untermenschen.

Racism, and I mean REAL Nazi-style kill-the-Jews racism, is not only excused by the genetic argument for altruism, it is demanded by it. Aiding anyone outside your clad and clan and bloodline is treason to the Selfish Gene, ergo, by this logic, immoral.

For that matter, women’s liberation causes a drop in fertility rates, so it also is treason against the Selfish Gene. for that matter, monogamy is treason, polygamy is demanded, and the consent of the concubines in the breeding harem is not required, because the gene does not care if you wanted to have happy children, only many children.

So, logically, if altruism is basic on the Selfish Gene, abducting dancing girls and nubile starlets to the breeding harem is not only licit, it is the highest and most saintly and most moral of all possible actions!

It may not be coincidental that this “morality” is most often advocated by the sort of male atheist whose only chance of any sexual exposure to dancing girls and nubile starlets would be through forcible abduction and rape.

It should be apparent that if we were to seriously adopt this sort of biology-based “morality” on a large scale, our world would more closely resemble John Norman’s Gor than anything else. The first imperative for any human society that values stability, let alone survival, is to eliminate unrestricted female volition in sexual matters. That is why religions and governments have always concerned themselves with a multitude of rules restricting it in some manner. Because without them, the civilized society will not survive.

As Camille Paglia pointed out repeatedly in Sexual Personae, the female represents the chaotic and unreasoning aspect of humanity, vital for the survival of the species, fertile when husbanded, and insanely destructive when left unrestrained.

Nicholas Kristof and the Butterfield Effect

Michael Graham defines the Butterfield Effect:

It’s what happens when someone on the Left makes a statement that is laughably ludicrous on its face, yet it reveals what the speaker truly believes — no matter how dumb.

“The Butterfield Effect” is named in honor of ace New York Times crime reporter Fox Butterfield, the intrepid analyst responsible for such brilliantly headlined stories as “More Inmates, Despite Drop In Crime,” and “Number in Prison Grows Despite Crime Reduction,” not to mention the poetic 1997 header, “Crime Keeps on Falling, but Prisons Keep on Filling.”

Mr. Butterfield is truly perplexed at what he calls the “paradox” of more criminals in prison coinciding with less crime in neighborhoods. An observation that might appear obvious to an 8th grader (crooks + jail = fewer crimes) is simply beyond his grasp. Butterfield of the Times is the poster boy for the greatest conundrum facing the American Left today: How do you explain to people who just don’t get it that the problem is they just don’t get it?

 Nicholas Kristof is my favorite exemplar of this effect. Previously there was his brilliant idea to combat Boko Haram with redoubled efforts to educate Nigerian girls. And look at his column today, in which he affects to be puzzled why Aung San Suu Kyi isn’t standing up for the rights of Myanmar’s Muslims to set up madrassas all over the country and indiscriminately murder Buddhists.

  1. Aung San Suu Kyi should be one of the heroes of modern times. Instead, as her country imposes on the Rohingya Muslim minority an apartheid that would have made white supremacists in South Africa blush, she bites her tongue. It seems as though she aspires to become president of Myanmar, and speaking up for a reviled minority could be fatal to her prospects.
  2. In the absence of schools, Wahhabi madrassas are popping up ominously in closed camps.
  3. “She supports Muslims,” U Pan Tha, a 66-year-old Buddhist, told me,
    bitterly. His home was burned by Muslims in 2012 clashes, and he now
    lives in a camp for displaced people. He voted for Aung San Suu Kyi’s
    party in 1990, but he says he won’t in the elections next year. “We will
    choose the military government over Suu Kyi,” he said.

It’s an apt reference to South Africa; it would appear Suu Kyi has learned from de Klerk’s mistakes. Kristof doesn’t seem to realize that once there are enough Muslims in the USA, history suggests they will begin behaving the same way they do in Myanmar, in India, in the Philippines, in China, in the former Soviet Union, and in the Middle East. After a few schools or churches or synagogues are attacked, what the American people’s response will likely make Myanmar’s patient strangulation of the Rohingya look moderate in comparison.

There will be a second and larger scale Reconquista across the West sooner or later. It’s that or Sharia. The sooner it takes place, the less violent it will be.

Three Hugo reviews

Technically four, actually. Jeffro’s Space Gaming Blog is reviewing this year’s Hugo nominees. He’s reviewed three in the novelette category so far, one of them being the Puppinette’s The Lady Astronaut of Mars:

The story begins with the confused ramblings of an elderly woman. We
know there’s something about Mars and Kansas… but we’re left collating
hints and scraps of information given to us by what is possibly an
unreliable narrator. If this actually is serious science fiction… then
it must be some sort of alternate history because we are shown some kind
Mars Mission from the fifties that was engineered with punch card
programs. And yet, the doctor from Kansas is named Dorothy and has an
Aunt Em and Uncle Henry… and this is so outrageous I can’t tell if this
is satire or a some kind of a joke.

If you keep reading, you soon discover that it isn’t some kind of drug addled hallucination. There is
a bit of science folded into the story: a domed colony on mars, an
asteroid impact on earth, an inhabitable extrasolar planet…. It’s not a
bad little premise there, really… but it is entirely smothered in the
details of particularly uninspiring elderly couple. The images and
situations are as far from those depicted in Frank Frazetta covers as
can possibly get. Instead Dejah Thoris, you get a sixty year old woman’s
flabby arms. Instead of gruesome sword fights and pulse pounding
action… you have a couple of bureaucrats coaxing a former astronaut to
come out of retirement.

The tone of the work is very even… almost elevated. It’s hard not to
read it in the cadence of an open mic slam poetry routine. Sometime like
this could be on NPR– it seems to hit all the right notes with a bit of
panache– but the story ends up grinding on into more and more graphic
and disheartening details.

He has also reviewed Brad Torgersen’s Lights in the Deep, which includes not one, but TWO Hugo-nominated works:

I remember the last couple of stories I’d
read in magazines like that. Back in the early nineties, I dipped into
several of them hoping to find the next Robert A. Heinlein. One story
was about a scientist running experiments on computer simulations of
pigs and chickens or something. If they passed, he might get to test his
drugs on a computer model of a human! (No aliens or explosions there.
Heck, I can’t even remember any conflict.) In another story, a painter
that specializes in portraits always ends up romancing the women he
paints. He’s a real Lothario. Then he gets a gig to paint an alien on
Mars or something… and his work just isn’t coming out right. Then it
dawns on him that he needs to get freaky with the alien in order paint a
good picture of it. Twist ending: the alien with incomprehensible
anatomy turns out to be a dude!

Perhaps  somebody else can confirm this for
me, but maybe the magazines have continued to be as godawful as I
remember. (I’m afraid to check, honestly. What if they’re worse…?)
Maybe “real” science fiction with aliens and space ships and laser
beams and exploding planets just isn’t done so much anymore…? Maybe the
fans that are deep in the science fiction scene are actually starving
for the sort of thing that I would recognize as, you know… being science
fiction. Maybe the way that Brad Torgersen’s collection combines
apocalyptic catastrophe with a sense of hopefulness really is having an
impact.
That he does this while straining to meet
editorial expectations and bending over backwards to not offend the
readership’s political and religious sensibilities is perhaps the most
obvious constraint holding back these stories. 

 He also reviewed The Last Witchking:

There’s nothing like a good pogrom, fatwā, book banning, congressional committee, or concerned citizens group to pique my interest in something. The greater the moral panic, the better the advertising. It was inevitable the hand-wringing surrounding the Hugo nominations this year would be just enough to get me to see what the fuss is about. I dove in to a book by the infamous Vox Day just hoping to be scandalized. (It’s the least I can do after growing up in the shadow of B.A.D.D. and the PMRC.)

I almost didn’t finish it. The first few pages consisted of two star-crossed lovers saying their last goodbyes to one another. I just about gave up right there, but the depiction of elves shortly after that held my attention. They weren’t the stereotypical tree-hugging types, but had a bit of an edge to them. Before long I was caring about the main character and clicking the page down key. My eyeballs were glued to the monitor and I couldn’t stop reading. (I’d picked up the Kindle edition that was free the other day because of the third story’s controversial Hugo nomination.)

Now, I’ve been hooked on page turners before that ended up making me feeling disappointed afterwards. You might know you’ve been had, but you keep buying books in the series because you have to know how it ends. This wasn’t like that. The main characters here are all so different from each other: an evil witchking, a goblin warrior, and elvish “seeker.” What’s intriguing to me is the extent to which I became immersed in the perspectives of each one. I really want to see each one to succeed… even when I maybe shouldn’t such as in the case of the titular character…. I’m glad for this brouhaha over the Hugo nominations, because this
book would have never crossed my radar otherwise. It was well worth the
few hours it took to read it, but I’m skeptical of the idea that a book
set in this world could go toe to toe with George R. R. Martin’s epic
fantasy series.

I don’t know Jeffro and he’s clearly not a reader of this blog, but I find it telling that his perspective as a genuine science fiction fan is so vastly different from that of the self-appointed “fan writers” who have been loudly pronouncing the intrinsic terribleness of my nominated work. Now that the Hugo packet has been made available to the voters, it should be fascinating to learn how many of them share his perception of these works in comparison to the usual suspects. It will certainly be more than a little amusing to hear the shrieks and the popping sound of five hundred heads exploding like Red Viper skulls if there turn out to be more Jeffros than Damiens among the voters.

In any event, I sent him a copy of A THRONE OF BONES to review, so that he could see for himself how well, or how poorly, it goes toe-to-toe with Mr. Martin’s ever-expanding trilogy.

UPDATE: Since some of you apparently weren’t aware, the Hugo Voter’s Packet is now available from LonCon and can be downloaded here by registered voters.

Book Eight

I think this marks the point at which George Martin has officially lost the plot. I never thought he was likely to finish all seven books, but now they’re talking about stretching the series to eight? I assume they’ll end up enlisting Joe Abercrombie, or one of the HBO screenwriters, to finish them after Martin goes the way of all Starks in Westeros, but I think that Martin should instead consider pulling an epic literary prank that would dwarf the HBO campaign featuring Sean Bean that misled all the viewers who hadn’t read the books.

What if everything that has “happened” is just a terrible nightmare of the Mad King, Aerys II Targaryen? How AWESOME would that be? After A DANCE WITH DRAGONS, it would probably be considerably more entertaining than whatever perversions and grotesqueries Martin, or his successor, attempts to gin up in order to prod his torpid readers into feeling some sort of emotional reaction to the events in the books.

The challenge of cause-and-effect

This plaintive protest, in a nutshell, explains why there can never be any significant mixing of various population sub-groups that will be successful over time. Not without the rule of a militarized aristocracy at a bare minimum, and a strictly limited voting franchise at best.

“I’m at the breaking point,” said Gretchen Gardner, an Austin artist who bought a 1930s bungalow in the Bouldin neighborhood just south of downtown in 1991 and has watched her property tax bill soar to $8,500 this year.

“It’s not because I don’t like paying taxes,” said Gardner, who attended both meetings. “I have voted for every park, every library, all the school improvements, for light rail, for anything that will make this city better. But now I can’t afford to live here anymore. I’ll protest my appraisal notice, but that’s not enough. Someone needs to step in and address the big picture.”

Now, this is a woman who cannot grasp the connection between her votes for “anything that will make this city better” and the consequent increase in her property tax bill. How can one reasonably argue that she should be permitted to vote? She is literally non compos mentis with regards to basic politics.

And she is high-functioning in comparison to millions of other voters! If nothing else, she has managed to provide for herself and pay her mortgage for 23 years. That puts her ahead of tens of millions of people.

The worst thing is the probable consequences of her selling her house. She’ll move somewhere less expensive, and then promptly resume voting for the very things that forced her to move there. Because she does not understand cause and effect.