"The plan was money. The architect was money. The designer was money and the builder was money. And if you ever wondered what money would look like if it were left to its own devices, it's Dubai."
So therefore, OPEC felt justified in raising the price of oil. To 45 dollars a barrel. At the height of the commodities boom, oil was trading for three times that amount.
Why Gas Is So Expensive Today (Hint: It’s Not Libya) A long but enthralling proposal that current gas prices have nothing to do with supply and demand, but are instead due primarily to rampant unchecked commodities speculation ("unchecked" because it had been granted special exemption from the clearly-defined checks). Quotes heavily from this article and this book. (found via Hacker News)
"New Economy, New Wealth - We are entering a post-industrial age with a very different economy and needs for a different view of wealth. What does this mean for us?" A presentation by Arthur Brock, using Prezi (previously). I recommend viewing it full-screen.
"People have always thought of tax havens as sideshows to the main event, whereas in fact they are central to the global economy". . . Treasure Islands: Tax Havens and the Men who Stole the World [more inside]
Squatters on the Skyline: "Facing a mounting housing shortage, squatters have transformed an abandoned skyscraper in downtown Caracas into a makeshift home for more than 2,500 people." [SLNYTVP]
"Meanwhile, Important Politician stretches out in his business class seat and listens to his wife talk about the pearls! And the silk scarves! And the amazing food! And IP thinks back to that Foreign Service Officer he just met. And he thinks: what a great life that guy has! He goes to parties at the President's mansion. He drinks fancy wine. He drives around in air conditioned motorcades, with people saluting him as he walks into government buildings. He goes hiking - in the middle of a work day, even! - on the Great Wall. What a cushy life he leads, thinks Important Politician." A proposed pay cut is not going down well with some Foreign Service Officers.
In his analysis The REAL Death of the Music Industry, BI author Michael DeGusta denounces inaccuracies in a recently circulating chart (source). A further analysis of the situation is provided: the music industry is actually doing much worse than the Bain chart implies. [more inside]
As California goes, so goes the country, they used to say. Well, yikes. Golden State, an n+1 piece by Nikil Saval, presents a bleak picture of paralysis and conflicted interests that has rendered "The Bellwether State" all but inoperable. (via Arts & Letters Daily)
"Imagine a parallel universe where the Great Crash of 2008 was followed by a Tea Party of a very different kind.... The name of this parallel universe is Britain." The UK's Progressive Tea Party.
"The World", an ambitious real estate project conceived at the height of the real estate boom, is sinking back into the sea.
Patsy Campbell has been fighting her foreclosure in Florida courts for the past 25 years. She has not made a mortgage payment since 1985 while foiling the efforts of several banks to evict her from her home in Okeechobee, Florida.
There is a firestorm in Bedford, New Hampshire, because a parent wants the school board to take the book "Nickel and Dimed: Not Getting By In America" off the reading list for a high school personal finance class. [more inside]
A look at how fatwas are issued, and how Iranian authorities were able to change the classification of caviar from haram (forbidden for Muslims to eat) to halal (permissible for Muslims to eat) in order to retake the caviar industry from the Soviets. [PDF]
The cost of raising a child from cradle to 18 has risen to $222,000. Chiefly among the reasons is parents' desire to "cultivate" their children.
A new brand of super shoppers use coupons and other discounts to get products for absurdly low prices. The Web has turned this group from a series of independent operators into cohesive groups, frustrating retailers.
The once shining beacon of capitalism in the Persian Gulf has lost a lot of its luster since the global financial crisis in 2008. But is it too soon to declare Dubai dead? [more inside]
The NY Times explores the darker side of bingo.
What Good is Wall Street? Think of all the profits produced by businesses operating in the U.S. as a cake. Twenty-five years ago, the slice taken by financial firms was about a seventh of the whole. Last year, it was more than a quarter. (In 2006, at the peak of the boom, it was about a third.) In other words, during a period in which American companies have created iPhones, Home Depot, and Lipitor, the best place to work has been in an industry that doesn’t design, build, or sell a single tangible thing.
Kelli went to Northeastern University and got loans to pay for her sociology degree. Her repayment schedule is featured in the article and it is not pretty. [more inside]
The Soviet Collapse "The document which effectively concluded the history of the Soviet Union was a letter from the Vneshekonombank in November 1991 to the Soviet leadership, informing them that the Soviet state had not a cent in its coffers."
One day after midterm elections in the U.S., Fed Chairman Ben Bernanke announces the nation's plans to purchase $600 billion in Treasuries. NPR takes Bernanke's announcement and attempts to "translate it into plain English." [more inside]
The Chancellor of the UK coalition government has announced the details of the Comprehensive Spending Review, setting budgets for government departments to 2014/15. Total savings will be £18 billion. Local government funding will be cut 7% each year for the next four years. The Arts Council budget will be cut by 30%. 490,000 jobs are forecast to be lost over the period in the public sector. The average cuts for each government department will be 19%. The speech. HM Treasury Spending Review pages. Guardian summary. Independent article. Nick Robinson's blog for the BBC. Make your own cuts with the Guardian's interactive tool. Graphic showing 09/10 government spending (that is, before the cuts).
If a car dealership makes less than $30 million per year or has less than 200 employees - help is on the way!
Don't Make Excuses - Make Good! Between World Wars I and II, the U.S. economy was booming - workers had choices and employers competed for their time. How to motivate and gain loyalty from a labor force that knew it could walk out the door and find more work soon? Charles Mather, head of a family printing business in Chicago, offered employers a solution: the first motivational posters for the private workplace market. Printed between 1923 and 1929, Mather's "Work Incentive Posters" used strong imagery and short, clear messaging to encourage workplace values like teamwork, punctuality, safety, and loyalty. Today, some of his 350 designs can be seen in traveling exhibitions and poster galleries, and Antiques Road Show - or you can soak up some motivation from his modern-day successors at Successories - or generate your own. [more inside]
"Anybody that's not in the city of South Fulton, it's a service we offer, either they accept it or they don't." In Obion County, Tennessee, the services of the South Fulton Fire Department are provided only to those customers who wish to pay their $75 annual fee. If you don't feel like subscribing, and your house catches fire, the firefighters will at least keep you company as you watch it burn to the ground.
Over at Slate magazine, Timothy Noah is doing a multi-part examination of America's growing income gap. The Great Divergence.
How to End the Great Recession. Robert Reich's prescription for the economy.
Do you feel overwhelmed trying to understand the driving forces behind our economic collapse. When listening to the latest Planet Money podcast, do you find yourself yearning for something a bit more toe-tappin'? Meet Merle Hazard. "He is the first and only country singer to write about mortgage-backed securities, derivatives, and physics."
Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles--and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.
How to be frugal and still be asked on dates Though saving and overall frugality are making a comeback in all areas of life, dating remains the one area where it is (probably) not acceptable to be cheap.
China is now the world's second-largest economy.
High frequency trading crop circles. Automated trading is flooding stock exchanges with nonsensical orders making odd patterns like The Knife at millisecond scales. Bugs, emergent phenomena, or market jamming strategies? No one seems to know.
Hale "Bonddad" Stewart shows that U.S. Manufacturing is NOT Dead, but says that to
zombify resurrect rejuvenate it America should look into Industrial Policy. Meanwhile, in Detroit, a President is saying that the automobile industry bailout prompted an "industrial revival", a Senator is calling it "industrial policy" and an economist is saying even if it is, "it's the most successful...in American history". All of which prompts the age-old question.... [more inside]
99 Weeks Later, Jobless Have Only Desperation. 'In June, with long-term unemployment at record levels, about 1.4 million people were out of work for 99 weeks or more, according to the Bureau of Labor Statistics.' While the Senate ponders a debate on tax cuts for the rich, jobless claims hit highest level since April. With such unemployment, frustration and despair grow as job searches drag on. 'In her well-thumbed, leather-bound Bible, Terri Sadler recently highlighted in bright pink a passage in the Gospel of Matthew. In it, Jesus urges his followers not to “worry about tomorrow, for tomorrow will worry about itself.” But Ms. Sadler’s tightening throat and halting breath when she tries to read the words aloud make it clear that she is having trouble mustering enough faith to follow them.' [more inside]
"[Bank robber Peter Barry] Lawrence, 71, made his getaway in his wheelchair, with $2,000 in cash on his lap... he took a meandering route down Seventh Avenue until the police caught up with him five minutes later. But that was all part of the plan." And an embedded reporter in Afghanistan notes that "many young soldiers told me that they actually live better in the army, even when deployed, than they did in civilian life, where they couldn't make ends meet, especially when they were trying to pay for college or raise a family by working one or two low-wage jobs" (p. 1). Meanwhile, "parents of means are now resorting to buying franchise businesses to keep their adult children employed." Economic life in contemporary America.
These folks in rural Arkansas and Missouri are getting jobs that are often reported as going to India and other countries. Is this a sign of American ingenuity or decline?
Britain Is Puzzled by Its Inflation Problem in a Downturn. Inflation in Britain is an economic mystery. It seems unique in the Western World which on the whole is closer to the dangers of deflation than inflation. April of this year was particularly bad - in an inflation spike that alarmed Britain, 'British price inflation including housing costs hit a 20-year high of 5.3% in April, sending shockwaves through an economy still struggling to exit recession'. [more inside]
Keith Gessen of n+1 Magazine interviewed an anonymous hedge fund manager. [Previously]. HFM provided many more insights than were published back in 2008. [more inside]
Plummeting Marijuana prices cause panic in CA. In 1983, the Reagan administration launched a massive air and ground campaign to eradicate pot and lock up growers in northern California. Charley Custer, a writer and community activist, had just arrived to Humboldt County from Chicago. With the Reagan crackdown, Custer recalls, wholesale prices shot up — to as high as $5,000 a pound. That sudden and ironic windfall for those growers willing to risk prison time transformed the community.... Prices are now much less than $2,000 a pound, according to interviews with more than a dozen growers and dealers. Mendocino County Sheriff Tom Allman says some growers can't get rid of their processed pot at any price.
Major market indices fell almost 10% this afternoon before recovering half of that value. Some blame the failing Greek economy and the related loss of confidence in the Eurozone. But a lot of attention is being paid to the role of automated trading systems. Accenture's stock, for example, dropped from $41 to one penny in two minutes and then recovered just as quickly. Will this trigger a loss of confidence in automated trading?
Proposed austerity measures in response to Greece's economic crisis have led to riots and three deaths . However, this isn't the first time that riots have shaken Greece in response to the economic turmoil. One dog has seen them all.
After more than 160 years of treating patients, historic St. Vincent's Hospital in New York City's Greenwich Village filed for bankruptcy protection on Wednesday and will close its doors to new patients. The last remaining Catholic Hospital in NYC, St. Vincent's was originally founded in 1849 to serve the poor. The effect is already being felt at other hospitals in the area. But despite the filing, there was still time for one last cry: Abigail Jancu was the the last baby ever born in St. Vincent's maternity ward.
Today, while testifying for only the second time on Capitol Hill since the financial crisis began, [former Fed chairman] Alan Greenspan said the Fed closely monitored the subprime market [...]"I was right 70% of the time, but I was wrong 30% of the time, and there were an awful lot of mistakes in 21 years...". But Greenspan's defense of his record today rang hollow to many seasoned observers, if not downright deceitful.
Gaza's tragically peculiar economy - Last week Palestinians marked the 1,000th day of the "siege" of the Gaza Strip. The continuing economic embargo, with its attendant social and economic effects on the more than 1.5 million Gazans, makes for a depressing story. Equally depressing is the extent to which this situation has somehow become accepted as normal and acceptable by much of the international community. [more inside]
Click here? Was structuralism, the big idea of Claude Lévi-Strauss, more cult than science? Apostolos Doxiadis, Alecos Papadatos and Annie Di Donna – the team behind the bestselling graphic novel Logicomix – investigate.
NPR's Planet Money has bought a toxic asset. As announced on their podcast Tuesday and on Morning Edition today, the team's five reporters pooled $1000 to buy a stake in over 2000 mortgages, with the (highly unlikely) profits going to charity. Listeners can track the asset's progress, suggest it a name, and even watch it personafied in a two minute video.
Last week, economist Simon Johnson (his blog; previously on MeFi) spoke at the Roosevelt Institute about the failure to regulate the financial industry, and the doomsday cycle of our economy (via).
It has been looked at for many years (link to a 2003 PDF revised edition of a 1983 report). Inspiring reports trying to predict where this was heading, the knowledge economy is incredibly difficult to get a grip on, mainly because its products are intangible. [more inside]