AS THE ECONOMY CRUMBLES
Summarizing the crappy economic news of the week
"If work were so pleasant, the rich would keep it for themselves." – Mark Twain
Issue #13 - June 16, 2003
1. Depleting Resources
2. Free Market Misery
3. Deficits, Deflation, Recession, Depression
4. No Jobs
5. Increasing Costs, Decreasing Benefits
6. Iraq and a Hard Place
Top 100 Corporate Criminals of the Decade
1. DEPLETING RESOURCES
World Without Oil
It has become the foundation upon which our entire modern civilization has been built. Recently, that foundation has begun to develop some cracks and has become a little shakier than it used to be, as cheap oil and natural gas become harder to find and acquire. Even if we were to develop a new source of energy and a more fuel-efficient car today, without oil, modern civilization as we have come to know it is still in deep trouble.
FROM: Alternative Press Review, 6 Jun
Suburbs are doomed by the coming energy crunch
The price of natural gas is soaring. Next it will be oil. Suburban life as we know it could be doomed. Many suburban homes could be worthless in less than 20 years.
FROM: Globe & Mail, 22 May
Ocean’s bounty is gone
The journal Nature this spring published the most comprehensive study ever conducted of the worlds fisheries. Simply put, it concluded that the worlds oceans are wrecked.
From: Miami Herald, 5 Jun
Natural gas in dangerous decline
Gas production and drilling results in Western Canada have been so "dreadful" in recent months almost no amount of drilling can overcome production declines in the next few years, according to a report by FirstEnergy Capital Corp.
FROM: National Post, 11 Jun
Alarm as US gas supply hits low
Natural gas supplies in the US have reached critically low levels in recent months and may be inadequate to meet demand during a hot summer this year.
FROM: Financial Times, 9 Jun
California desert residents use water like there's no tomorrow — but tomorrow is coming
"We've gone from being assured that we lived in this magical place where the rules of water didn't apply to now having, I think, a very appropriate wake-up call about the fact that we do live in the California desert," said Buford Crites, a 17-year member of the Palm Desert City Council. "People have lived in this false water utopia."
FROM: Environmental News Network, 11 Jun
Revealing Statements from a Bush Insider about Peak Oil and Natural Gas Depletion
I think basically that now, that peaking of oil will never be accurately predicted until after the fact. But the event will occur, and my analysis is leaning me more by the month, the worry that peaking is at hand; not years away. If it turns out I'm wrong, then I'm wrong. But if I'm right, the unforeseen consequences are devastating.
FROM: From the Wilderness, 12 Jun
Canadian gas production can’t keep up with US demand
The United States shouldn't look northward to ease its worsening natural gas supply crunch because Canadian production won't be able to keep up with soaring demand south of the border, a U.S. congressional committee has heard. Canada has filled half of all new U.S. gas demand for a decade now, but the well is running dry, Harold Kvisle, president and chief executive officer of TransCanada Corp. of Calgary, warned the energy and commerce committee yesterday.
FROM: Globe & Mail, 11 Jun
Heating bills may rise again
The United States has limited opportunities to boost natural gas supplies, which may mean surging prices for heating fuel again this winter, U.S. Energy Secretary Spencer Abraham said in a letter to lawmakers.
FROM: Bloomberg, 10 Jun
Gas price surge hits chemical makers
Fertilizer makers and petrochemical companies that rely on natural gas as a component of their manufacturing processes, and not just a fuel source, have seen their single largest cost soar since the beginning of the year. And the situation is only likely to get worse.
FROM: CBS MarketWatch, 14 Jun
Crude Awakening: Add Oil to the List of Worries
Federal Reserve Chairman Alan Greenspan highlighted the risks of higher natural gas prices. Conversely, scant few seem terribly concerned about oil prices, Greenspan included. But those believing robust economic growth is imminent, and thus higher stock prices are justified, have reason to be at least a little concerned.
FROM: TheStreet.com, 12 Jun
This isn't the way it's supposed to go. As it became clear that the war in Iraq was not going to go as badly as some traders feared, and that Saddam Hussein lacked the will or, more likely, the ability to scorch his country's oil fields, the market was enthusiastic that oil prices would come scuttling down.
FROM: CNN Money, 12 Jun
Oil prices surge past a barrel
Oil prices surged above a barrel for the first time since mid-March on Wednesday, as traders fretted about scant supplies, the rising price of natural gas and a signal from OPEC that production cuts might be on the horizon.
FROM: Associated Press, 12 Jun
Electricity costs near 20-year highs
U.S. air conditioning bills might bulge this summer as electricity prices are projected to rise to their highest level in at least two decades. ... The expected price increase is partly attributed to elevated natural gas prices, which have climbed as inventories have fallen to 29% below the five-year average. Natural gas is the third-biggest source of electricity generation after coal and nuclear power.
FROM: USA Today, 9 Jun
2. FREE MARKET MISERY
Downsizing in Disguise
Iraq looks like every other country that has undergone rapid-fire "structural adjustments" prescribed by Washington, from Russia's infamous "shock therapy" in the early 1990s to Argentina's disastrous "surgery without anesthetic." Except that Iraq's "reconstruction" makes those wrenching reforms look like spa treatments.
FROM: The Nation, 5 Jun
Gilded Cage: Wackenhut’s Free Market in Human Misery
One of the hottest stock market plays of the 1990s was the investment in hotels without doorknobs: privately operated prisons. And the hottest of the hot was a Florida-based outfit, Wackenhut Corporation, which promised states it would warehouse our human refuse at bargain prices.
FROM: Guerrilla News Network, 11 Jun
The Truth That Economists Forgot
Clive Hamilton, director of the Canberra think-tank the Australia Institute, is a former econocrat with a PhD in economics. His book, Growth Fetish, published by Allen & Unwin, is a powerful attack on conventional economics and its rarely examined assumption that unending growth in the consumption of goods and services is what will make us happy. Hamilton argues that economists have created a story about how the world works based on certain aspects of human behaviour: self-interested calculation, individualism and materialism. "The strangeness of the economists' world," he says, "arises from the fact that they recognise only this form of behaviour as valid and insist on imposing it on everything that people do." In other words, Homo Economicus - the person who inhabits the economists' models - bears only a passing resemblance to you and me. The economists have seized on a few aspects of human nature and assumed (because it makes their models easier to play with) that this is all there is to us.
FROM: Sydney Morning Herald, 7 Jun
3. DEFICITS, DEFLATION, RECESSION, DEPRESSION
World economy sliding towards deflation and recession
In the United States, the recent upturn in the market masks a worsening situation in the economy as a whole. The continued decline in manufacturing—highlighted by the approaching crisis in the car industry—points to the fact that the Fed’s ability to prevent a full-scale recession may be coming to an end.
FROM: World Socialist Web Site, 11 Jun
Looking Like Japan?
The problem? Japan's failure may have had nothing to do with the eventual cutting back on economic stimulus, and everything to do with the overcapacity that developed during the bubble years. The United States is dealing with similar excesses, said Dresdner Kleinwort Benson global investment strategist James Montier (who was his firm's Japan economist in 1995), and pouring money on the economy will not make them go away.
FROM: CNN Money, 13 Jun
The “Enronization” of America
Could the U.S. economy go the way of Enron?
FROM: Business Week, 10 Jun
Drowning, First-Class Style
To begin on a somber note, the bubble and the bust of high technology, the debt build-up of American households, the obsession with a strong dollar -- all of this existed before we got George Bush. The late 1990s were a fine time, but they set the stage for a slump which began in late 2000, from which we have not recovered, and will not recover soon.
FROM: TomPain.com, 9 Jun
CBO expects deficit to shatter record
Congress' top budget analyst warned Tuesday that the government is on track this year for a record deficit exceeding 0 billion…
FROM: Associated Press, 10 Jun
U.S. States Face Record Deficits, Boost Taxes as Bush Cuts Them
U.S. states are boosting taxes and fees to erase their biggest deficits since World War II, moves that will blunt the impact of President George W. Bush's 0 billion in tax cuts, state budget officials said.
FROM: Bloomberg, 11 Jun
Insiders’ big stock sales may be omen
Here's some cold water for a red-hot stock market: Executives are rushing to sell their companies' shares at a pace not seen since 2001. ... The moves are a concern because insider buying and selling – by people who presumably are the most knowledgeable about their companies' prospects – have been good predictors of the market's direction. For example, many executives sold their holdings in early 2000, just before a bear market in stocks began.
FROM: Wall Street Journal, 8 Jun
US consumers in gloomy mood
New figures have revealed a surprise decline in US consumer confidence, dashing hopes that free-spending shoppers would revive the sluggish economy.
FROM: BBC, 13 Jun
Pop goes the housing market?
Some critics who say there is a dangerous runup in housing prices across the nation worry that the shake-up at the nation's No. 2 domestic mortgage financing company could spell big problems for home prices -- and the U.S. economy.
FROM: CNN Money, 10 Jun
Freddie Mac: US mortgage financier in derivatives trouble
The ousting of three top officials from Freddie Mac, the second biggest financier of residential mortgage loans in the US and one of the world’s biggest financial institutions, and the launching of criminal investigations has sent a shiver through US financial markets.
4. NO JOBS
Jobless at 20 year high
In an ongoing sign of the weak economy, the number of Americans getting unemployment benefits hit the highest level in more than 20 years during the last week of May.
FROM: NY Daily News, 13 Jun
Jobless recovery persists as unemployment continues to climb
Prior to the revisions, it appeared that 2.1 million total jobs and 2.7 million private-sector jobs were lost between the beginning of the recession in March 2001 and April of this year. With today's revisions, and including May's results, those losses have been revised to 2.5 million and 3.0 million. Both in terms of numbers and percentages, more private-sector jobs have been lost over this downturn than in any prior comparable period in post-WWII history.
FROM: Economic Policy Institute
Down and Out in White-Collar America
Professionals have never had a tougher time finding a job. It's not just the economy; the rules of the game are changing.
FROM: Fortune, 9 Jun
5. INCREASING COSTS, DECREASING BENEFITS
US health costs rose 9.6 pct in 2002
U.S. health care costs grew robustly in 2002, easing slightly from the year earlier, fueled largely by a hospital building boom experts said is causing overuse of medical services and higher patient costs, a survey found.
FROM: Reuters, 11 Jun
France faces more chaos as pensions strike continue
France braced for yet more disruptions after being hit by another day of walkouts, protests and transport chaos, as trade unions stepped up the pressure on Prime Minister Jean-Pierre Raffarin to withdraw a controversial pensions reform bill.
FROM: AFP, 11 Jun
All Work and No Play
American workers already put in more time than those in most other industrialized nations. Now, with little comment or scrutiny, the Labor Department and Congress have declared open season on the 40-hour week, pushing ahead on new workplace rules that could turn offices into all-night crash pads.
FROM: Los Angeles Times, 8 Jun
6. IRAQ AND A HARD PLACE
Reservists pay steep price for service
Thousands of citizen soldiers charged with rebuilding Iraq face an even more daunting prospect when they return home: repairing the damage to their careers and personal finances.
FROM: USA Today, 9 Jun
Postwar euphoria evaporates in US economy
Post Iraq war euphoria evaporated in the United States as the sluggish no-jobs recovery failed to gather speed, data showed…
FROM: AFP, 14 Jun
Post-war euphoria fades as consumers wake up to reality
The road map to peace lies in tatters, the “battle for Iraq” is far from over and the economy is still shedding jobs. Welcome back to reality.
FROM: MSNBC, 13 Jun
AS THE ECONOMY CRUMBLES is compiled by Visualize Economic Collapse
Editor: Dean Thomas
Feedback / suggestions to: Economic Collapse
Previous issues are available at: Infoshop News