User login

Economics

Off the Cuff: Jittery Markets

Chris Martenson - August 7, 2014 - 10:18

In this week's Off the Cuff podcast, Chris and Mish discuss:

  • Russian Retaliation
    • Putin announces sanctions against food from the West
  • Jittery Markets
    • Have we seen the top?
  • The Danger In Bonds
    • That's where the real carnage will come
  • The Age Of Bubbles
    • We live in it, though it may be ending

Join the conversation »

Categories: Economics

Daily Digest 8/7 - Italy Falls Back Into Recession, ISIS Consolidates

Chris Martenson - August 7, 2014 - 07:54
  • Italy Falls Back Into Recession, Raising Concern for Eurozone Economy
  • Conflict Leaves Industry in Ashes and Gaza Reeling From Economic Toll
  • ISIS Consolidates
  • Gold Mining Industry: Fuel Costs Explode Over The Past Decade
  • Silver Pyramid Power
  • A Carbon Bubble In 2015?
  • New Method Keeps Solar Cells Clean And Efficient
  • Dry California Fights Illegal Use of Water for Cannabis

Join the conversation »

Categories: Economics

Why Germany Is Backing Away From a Trade Deal that Lets Corporations Sue the Government

Germans protest against a trade agreement. Photo by Mehr Democratie / Flickr.

In a move that has many on the left cautiously celebrating, Reuters reported on July 28 that Germany might reject a new trade agreement between Canada and the European Union.

Some commentators see Germany's move as proof that organizing against the new round of trade agreements is gaining ground.

The deal is called the Comprehensive Economic and Trade Agreement, or CETA. It’s part of a new wave of large, aggressive trade deals that also includes the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union, and the Trans Pacific Partnership (TPP) between 12 countries of the Pacific Rim.

If all the deals passed, they would affect more than half of the world’s economy. But the red light from Germany could signal that these agreements are not as inevitable as their advocates suggest.

Germany’s objections are centered specifically on the so-called “investor-state dispute settlement” provisions in CETA. These provisions—also known by the acronym ISDS—allow transnational corporations to take legal action against individual governments if they believe that the country’s domestic laws violate a trade agreement. And the legal disputes happen through arbitration, which is a way to settle disputes completely outside of the involved countries’ courts.

We’ve seen this movie before. Chapter 11 of the North American Free Trade Agreement (NAFTA) stipulates that three-person panels of private attorneys decide who wins in disputes between corporations and individual governments. These proceedings are closed to public observation.

The fallout has been dramatic: Corporations have used the NAFTA tribunals to win big-ticket monetary settlements from the taxpayers of nations whose domestic laws interfere with corporate profits. According to a report by the consumer-rights advocacy group Public Citizen, there are 17 pending claims in which corporations are seeking a total of $38 billion through NAFTA and other deals.

The compensation won through these claims hits particularly hard in Argentina—the most frequent target of these cases according to a 2014 report by the United Nations Conference on Trade and Development. In one example, Argentina was ordered to pay $185.3 million to the energy company BG Group, who sued for profits lost when the country froze gas prices in 2001.

Argentina is not alone: another report by the same U.N. group shows that 66 percent of investor-state cases initiated in 2012 were brought against “developing or transition economies”:

Chart courtesy of UNCTAD.

Meanwhile, the number of corporate claims has been on the rise: The UNCTD’s report from 2014 shows that in 2002 there were fewer than 100 known treaty-based ISDS cases. By 2013, that number had reached 568—a five-fold increase over 11 years:

Chart courtesy of UNCTAD.

The cases settled through NAFTA’s dispute resolution tribunals show corporate and investor rights trumping national sovereignty and domestic laws. Exxon Mobil won $60 million from Canada in 2007 because local regulations required oil companies to pay to support research and development in the country’s poorest provinces. U.S. energy company Lone Pine Resources is seeking CA$250 million in damages because the firm “expended millions of dollars and considerable time and resources” on a fracking project before Quebec banned fracking in 2011—a decision Lone Pine called “arbitrary” and “capricious.”

Opposition to these provisions is not limited to the political left. The Cato Institute, a libertarian think tank, has taken issue with investor-state dispute provisions in trade agreements like the TPP and TTIP. The institute’s Free Trade Bulletin argued in March that investor-state dispute settlements are “an unnecessary, unreasonable, and unwise provision to include,” and suggests sacrificing the provision in order to save the trade agreements.

Some implications

Germany is no stranger to similar dispute settlements. After the country decided to phase out nuclear power following the disaster at the Fukushima Daiichi Nuclear Power Plant in 2011, the Swedish energy firm Vattenfall filed for arbitration to seek 3.5 billion ($4.6 billion) in damages, blaming the country for past and future loss of profits.

Not everyone is convinced by the messages coming out of Berlin.

Considering how that worked out, Germany’s change of heart is perhaps to be expected. But some commentators see the move as proof that global organizing against the new round of trade agreements is gaining ground. Arthur Stamoulis, director of the Citizens Trade Campaign, noted that “The German government and other governments are starting to feel the heat from public opposition to [investor-state dispute settlements].”

Yet not everyone is convinced by the messages coming out of Berlin. Peter Fuchs, executive director of PowerShift, a Berlin-based NGO focused on international trade and investment policy, expressed skepticism toward the idea that German opposition will sink CETA.

“Unfortunately, you cannot trust this government at all when corporate interests are at stake,” Fuchs said, calling the German government “a staunch proponent of neoliberal trade and investment agreements.”

According to Fuchs, this is a time for the public to ramp up pressure by calling on politicians to reject the trade deals. He pointed to the upcoming European Citizens Initiative against TTIP and CETA as one campaign aimed at making that happen.

However seriously one takes Germany’s apparent about-face, the development has emboldened the fight against the agreement. And with a growing chorus of skeptics from both left and right, these problematic provisions seem newly vulnerable, as do the agreements overall.

As Arthur Stamoulis told YES, “With renewed activism, corporate power grabs like CETA, TTIP and the TPP … really can be stopped.”

Alexis Goldstein wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Alexis is a former Wall Street professional who currently serves as the communications director for The Other 98%. She is the co-host of the radical finance and economics podcast Disorderly Conduct. Follow her on Twitter at @alexisgoldstein.

Read More:

Categories: Economics

Why Germany Is Saying No to a Trade Deal that Lets Corporations Sue the Government

Germans protest against a trade agreement. Photo by Mehr Democratie / Flickr.

In a move that has many on the left cautiously celebrating, Reuters reported on July 28 that Germany might reject a new trade agreement between Canada and the European Union.

Some commentators see Germany's move as proof that organizing against the new round of trade agreements is gaining ground.

The deal is called the Comprehensive Economic and Trade Agreement, or CETA. It’s part of a new wave of large, aggressive trade deals that also includes the Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union, and the Trans Pacific Partnership (TPP) between 12 countries of the Pacific Rim.

If all the deals passed, they would affect more than half of the world’s economy. But the red light from Germany could signal that these agreements are not as inevitable as their advocates suggest.

Germany’s objections are centered specifically on the so-called “investor-state dispute settlement” provisions in CETA. These provisions—also known by the acronym ISDS—allow transnational corporations to take legal action against individual governments if they believe that the country’s domestic laws violate a trade agreement. And the legal disputes happen through arbitration, which is a way to settle disputes completely outside of the involved countries’ courts.

We’ve seen this movie before. Chapter 11 of the North American Free Trade Agreement (NAFTA) stipulates that three-person panels of private attorneys decide who wins in disputes between corporations and individual governments. These proceedings are closed to public observation.

The fallout has been dramatic: Corporations have used the NAFTA tribunals to win big-ticket monetary settlements from the taxpayers of nations whose domestic laws interfere with corporate profits. According to a report by the consumer-rights advocacy group Public Citizen, there are 17 pending claims in which corporations are seeking a total of $38 billion through NAFTA and other deals.

The compensation won through these claims hits particularly hard in Argentina—the most frequent target of these cases according to a 2014 report by the United Nations Conference on Trade and Development. In one example, Argentina was ordered to pay $185.3 million to the energy company BG Group, who sued for profits lost when the country froze gas prices in 2001.

Argentina is not alone: another report by the same U.N. group shows that 66 percent of investor-state cases initiated in 2012 were brought against “developing or transition economies”:

Chart courtesy of UNCTAD.

Meanwhile, the number of corporate claims has been on the rise: The UNCTD’s report from 2014 shows that in 2002 there were fewer than 100 known treaty-based ISDS cases. By 2013, that number had reached 568—a five-fold increase over 11 years:

Chart courtesy of UNCTAD.

The cases settled through NAFTA’s dispute resolution tribunals show corporate and investor rights trumping national sovereignty and domestic laws. Exxon Mobil won $60 million from Canada in 2007 because local regulations required oil companies to pay to support research and development in the country’s poorest provinces. U.S. energy company Lone Pine Resources is seeking CA$250 million in damages because the firm “expended millions of dollars and considerable time and resources” on a fracking project before Quebec banned fracking in 2011—a decision Lone Pine called “arbitrary” and “capricious.”

Opposition to these provisions is not limited to the political left. The Cato Institute, a libertarian think tank, has taken issue with investor-state dispute provisions in trade agreements like the TPP and TTIP. The institute’s Free Trade Bulletin argued in March that investor-state dispute settlements are “an unnecessary, unreasonable, and unwise provision to include,” and suggests sacrificing the provision in order to save the trade agreements.

Some implications

Germany is no stranger to similar dispute settlements. After the country decided to phase out nuclear power following the disaster at the Fukushima Daiichi Nuclear Power Plant in 2011, the Swedish energy firm Vattenfall filed for arbitration to seek 3.5 billion ($4.6 billion) in damages, blaming the country for past and future loss of profits.

Not everyone is convinced by the messages coming out of Berlin.

Considering how that worked out, Germany’s change of heart is perhaps to be expected. But some commentators see the move as proof that global organizing against the new round of trade agreements is gaining ground. Arthur Stamoulis, director of the Citizens Trade Campaign, noted that “The German government and other governments are starting to feel the heat from public opposition to [investor-state dispute settlements].”

Yet not everyone is convinced by the messages coming out of Berlin. Peter Fuchs, executive director of PowerShift, a Berlin-based NGO focused on international trade and investment policy, expressed skepticism toward the idea that German opposition will sink CETA.

“Unfortunately, you cannot trust this government at all when corporate interests are at stake,” Fuchs said, calling the German government “a staunch proponent of neoliberal trade and investment agreements.”

According to Fuchs, this is a time for the public to ramp up pressure by calling on politicians to reject the trade deals. He pointed to the upcoming European Citizens Initiative against TTIP and CETA as one campaign aimed at making that happen.

However seriously one takes Germany’s apparent about-face, the development has emboldened the fight against the agreement. And with a growing chorus of skeptics from both left and right, these problematic provisions seem newly vulnerable, as do the agreements overall.

As Arthur Stamoulis told YES, “With renewed activism, corporate power grabs like CETA, TTIP and the TPP … really can be stopped.”

Alexis Goldstein wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Alexis is a former Wall Street professional who currently serves as the communications director for The Other 98%. She is the co-host of the radical finance and economics podcast Disorderly Conduct. Follow her on Twitter at @alexisgoldstein.

Read More:

Categories: Economics

The Tree of 40 Fruit

Chris Martenson - August 6, 2014 - 09:17

Get inspired to diversify your food production by incorporating grafted fruit trees into your garden and orchard. 

http://hackaday.com/2014/07/28/the-tree-of-40-fruit/

Join the conversation »

Categories: Economics

Is This Decline The Real Deal?

Chris Martenson - August 6, 2014 - 07:36

Is this stock market decline the "real deal"? (that is, the start of a serious correction of 10% or more) Or is it just another garden-variety dip in the long-running Bull market? Let’s start by looking for extremes that tend to mark the tops in Bull markets.

Join the conversation »

Categories: Economics

Prepare For The Bear

Chris Martenson - August 6, 2014 - 07:35
Executive Summary
  • The underappreciated impact of the Fed's current tapering
  • Get ready for corporate profits to start rolling over
  • Why record margin debt is such a big danger
  • The myth of de-leveraging
  • Why the data make a clear case the long Bull market is ending

If you have not yet read Is Part 1: Is This Decline The Real Deal? available free to all readers, please click here to read it first.

In Part 1, we looked extremes in valuations, sentiment, leverage and complacency, and how these make the Bull case for further advances in stock prices difficult to make without drawing this time it’s different parallels with previous asset bubble tops.

In this Part 2, we’ll look at how the fundamentals of the Bull case have been weakened or threatened, and determine whether indeed we are witnessing a key moment of direction-reversal in the markets.

The Federal Reserve’s Tapering of Quantitative Easing

Everyone who follows the financial news is aware that the Federal Reserve has tapered its unprecedented Quantitative Easing bond and mortgage buying program from $85 billion a month to $25 billion a month, and has made noises about ending the program entirely by October of this year.

Observers see two primary consequences of the end of QE:

1.  Interest rates, no longer suppressed by Fed bond and mortgage buying, will likely tick higher from historic lows.

2.  The support for stocks and other risk assets provided by QE will end, removing a key prop under stocks.

It’s clear that interest rates—shown here by a commonly used proxy for interest rates, the 10-year Treasury bond yield—have hit bottom, and while they might bounce along the bottom for some time, they don’t have much room to decline even if “risk-off” buying of Treasuries pushes the T-bill yield lower.

In other words, even if Treasury yields fall as investors flee ‘risk-on” assets such as stocks for the safety of Treasuries, this doesn’t necessarily translate into...

Join the conversation »

Categories: Economics

How Cooperation Jackson is Transforming the Poorest State in the U.S.

Shareable Magazine - August 6, 2014 - 07:29

With a median household income of just over $37,000, Mississippi is the poorest state in the United States. A powerhouse organization promoting economic justice, Cooperation Jackson was born of a need to transform the state, in particular its capital and largest city, Jackson.

Categories: Economics

Daily Digest 8/6 - Liberia Struggles To Contain Ebola, A Modern-Day Dust Bowl

Chris Martenson - August 6, 2014 - 07:24
  • Charleston, WV mayor proposes sales tax increase to fund police and firefighter pension funds
  • U.S. National Debt Now Stands at $1.1 Million per Taxpayer
  • Prices soar as Liberia struggles to contain Ebola
  • Ukraine Alarmed by Russian Buildup as People Flee Luhansk
  • A Modern-Day Dust Bowl
  • Obamacare rates to soar by as much as 23 per cent in 2015
  • U.S. Treasury to put public pensions under scrutiny
  • Russia to Use Pension Savings as Short-Term Budget Fix for Second Year
  • How Tax Inversions Became the Hottest Trend in M&A
  • Wealth gap is slowing U.S. economic growth, S&P says

Join the conversation »

Categories: Economics

Roots & Remedies Converges to #WageLove in Detroit

Shareable Magazine - August 5, 2014 - 15:15

Growing the Adjacent Possible

Categories: Economics

Fermentation is the New Canning

Chris Martenson - August 5, 2014 - 08:05

A good look at why one should consider establishing fermentation food preservation method as an alternative to canning.  Many additional health benefits can be found by eating fermented foods and with reCAP Mason Jars Pour Cap lids, it is easier than ever to get started.

http://www.resilientcommunities.com/fermentation-is-the-new-canning/

Join the conversation »

Categories: Economics

Daily Digest 8/5 - Europeans Struggle To Pay Electric Bills, Summer Gas Prices Down

Chris Martenson - August 5, 2014 - 06:58
  • Turn On, Retweet, Tune Out
  • Gaza War Strains Relations Between U.S. and Israel
  • Here's Everything We Know About The 'Secret Serum' Used To Treat An American With Ebola
  • Focusing on G.M. Unit, U.S. Starts Civil Inquiry of Subprime Car Lending
  • Summer Gas Prices Down Despite Geopolitical Turmoil, Higher Demand
  • Europeans Struggle To Pay Their Electric Bills
  • Marc Faber’s Outlook for Middle East, Oil, Gold Prices
  • Amid Preservation Efforts, Farmland in the Hamptons Goes for Other Uses

Join the conversation »

Categories: Economics

Global Coworking Week Celebrates 9 years of Coworking & Collaboration

Shareable Magazine - August 4, 2014 - 16:48

This Saturday marks the 9th year of International Coworking Day; an annual worldwide celebration of the first day ‘coworking’ was birthed and shared by Brad Neuberg in San Francisco, CA. Globally an estimated 500 coworking spaces will commemorate Neuberg’s vision as part of this event.

Categories: Economics

Meanwhile In Iraq, The Situation Grows More Dangerous

Chris Martenson - August 4, 2014 - 16:29

As if there wasn't enough to concentrate on given all that's happening in Ukraine between Russia and the West, and in Gaza between the Israelis and the Palestinians, the situation in Iraq has been taking some decidedly worrisome turns of late.

As ever, we keep our eye on this hot spot because of its special importance to the world supply of oil, any loss of which will rapidly lead to much higher prices.

Join the conversation »

Categories: Economics

How to Harvest and Store Garlic

Chris Martenson - August 4, 2014 - 15:12

I actually almost forgot to harvest my garlic this year. Thankfully, I wasn’t too late. I was probably a couple of weeks later than I should have been, but most of the garlic was still good. One could say it is a resilient crop. 

When do you harvest garlic?

It really depends on the garlic. I harvested towards the end of June, but it should have been mid-June. It is best to observe the tops of the garlic. You should harvest when most of the leaves are still green, but two or three of the bottom leaves have gone brown. This will typically give you a mature tight head. The idea is to pick the garlic when it is mature, but you don’t want to pick it so late that the cloves start to separate. If you pick at this ideal time, the garlic will store well.

Join the conversation »

Categories: Economics

Water Kettle and Power Generation

Chris Martenson - August 4, 2014 - 14:01

A new TEG water boiler / kettle system that will work on any flame.  Lots of interesting possibilities with this piece of gear.

Join the conversation »

Categories: Economics

Daily Digest 8/4 - Ebola's Acceleration Mapped, Can Ants Cool The World?

Chris Martenson - August 4, 2014 - 07:45
  • Land Grabbing – A New Political Strategy for Arab Countries
  • Gold Prices Reveal Truth About U.S. Economy
  • Mapping the acceleration of Ebola in West Africa in five charts
  • As more male bass switch sex, a strange fish story expands
  • Toledo Mayor Lifts Water Ban in Northwest Ohio
  • Is Europe's Bread Basket Up for Grabs?
  • More Oil Companies Abandoning Arctic Plans, Letting Leases Expire
  • And Now, The Farm Pollution Gets You
  • Investing In Nutrient-Dense Food: Vitamin D
  • Thousands Stranded After California Storms; 1 Dead
  • Can Ants Save the World from Climate Change?
  • As Oysters Die, Climate Policy Goes on the Stump

Join the conversation »

Categories: Economics

How to Build a Computer Lab for Free

Shareable Magazine - August 4, 2014 - 07:44

When Robert Litt, a teacher at Ascend, a K-8 school in Oakland, California, was told that there wasn’t money for a computer lab, he got creative and built one anyway; at zero cost to the school. As he explains in a 2012 Maker Faire presentation, he needed computers to built a lab and individuals, businesses and government are regularly discarding outdated computers. By connecting these dots, he created a thriving lab that teaches technology, and literacy through technology.

Categories: Economics

Why Startup Urbanism Will Fail Us

Shareable Magazine - August 4, 2014 - 07:20

Top image: A rendering of the Downtown Project's Container Park, now in operation. Is this serious or adolescent urbanism?

In 1958, three years before her masterpiece, The Death and Life of Great American Cities, Jane Jacobs wrote an article called “Downtown Is for People.” In it she noted:

Categories: Economics