Monday, May 10, 2010

May Is Turning To Crap

Back in February I first started to write about how I thought May would be a bad month.

I couldn't tell you then exactly what would happen. And the reason for that is fairly simple to explain. When complex systems are forced to simplify, they break down in complex and chaotic ways. You can predict when they'll break down, but it's often difficult to see exactly what events will occur during the break down.

In human civilizations, we see familiar patterns. when energy supplies are growing, we see our systems become more robust. Industries are amenable to paying for and installing safety measures and redundancies.

As energy supplies decline. Expenses are cut. Often in safety devices. As the system falls apart, the first things that are removed, are the things that keep it from breaking. These are considered the unnecessary components in the system. The waste and luxury items.

So we've seen all manner of industries deregulated. Laws and rules designed to keep industries from shooting themselves int he foot are removed. And those industries, then promptly shoot themselves in the foot. Then they pass the medical bills to the taxpayer.

During the Bush Administration, decades old mine safety regulations were removed. Not long after, we had our biggest mine accident in years. Now under Obama, with those regulations still removed, we topped that. Our mine safety record is reverting back to the good old days, at the turn of the century when being a miner was a game of roulette. You spun the barrel and took your chances every time you went back into the Earth.

The banks had their safety regulation removed, and promptly exploded. the taxpayers continue to borrow mind boggling quantities of money to funnel through various entities to keep these banks afloat.

Too big to fail, should be rephrased to, "Too Big To Exist." The banks are so huge now, that they can't make profits without being connected to the life support system of money presses running full bore, giving them free profits. Money for nuthin'.

Without money for nothing, they'd go bankrupt. One might be excused for thinking that anyone that needs tons of free money to stay in the black, shouldn't even be in business.

And now we learned that BP successfully lobbied to install deep water wells without mandated safety equipment. And the safety equipment they did install, was evidently defective, poorly designed, or just fake props. As a critical piece is a mile under water, we'll never know the truth.

I had hoped that this 'bell' that they tried to install over the leak would work. I didn't know that it wouldn't work. But as I noted here and there. The leak was way bigger than the capacity stated for this patch. Still I hoped that it would help a little.

After installation, we learned that it was only being placed over the smallest leak. The gusher wasn't being repaired yet. And even on the smallest of the three leaks, it failed. I wouldn't be surprised if there aren't some geologists out there that already knew it would fail and why.

But the point of BP's efforts aren't to fix the leak. But to show they are trying. After all, nobody has ever stopped a leak of this magnitude in one mile of seawater. BP doesn't know how to do it. But if they did nothing, they would get creamed in the arena of public opinion. so they must try, to fix it, even if they know their efforts will fail. It's in their best interest to even make attempts that they absolutely know are a waste of time. After all, the MSM wouldn't know the difference.

Last week, the market took a dive. Suddenly the EU prints a $trillion euros and the market magically rebounds. 60 million shares were purchased on the DOW to bring it up 440 points. Those bids were posted after hours and only took effect on the open. A savvy investor would put a limit on a bid that is going to ride through the weekend. It looks like savvy investors weren't present for this rally. From comments I'm seeing on news sites, it appears that the public thinks the market is rigged and the PPT drove the rally by pumping and dumping.

May isn't over. Nor will it be the end. It's the starting leg of a downturn. The news should continue to get exciting. there's a lot more crap that's going to break. I apologize that I can't be more specific. but this market downturn, BP and the rest all will produce a synergy that will continue wreaking havoc in unexpected ways.

Enjoy the gardening.

5 Comments:

At 9:47 AM, Blogger Kitty said...

Civilizations rise and fall...

And blunder along...

It's good to garden... :)

 
At 3:00 PM, Blogger Bukko Canukko said...

In the (Northern Hemisphere) winter of 2005, when the Mrs. and I went to Switzerland to begin our moneyvacuation, we took a side trip to Munich. I had never been to a concentration camp (Mrs. Bukko had, and she swears that one of her past lives had ended in one. She believes that sh!t; I don't) and Dachau is relatively close to Zurich. It was to remind myself of what America might be turning into under Bush.

The barracks and ovens etc. were interesting enough, but what stuck in my mind was the educational exhibit in the buildings where new prisoners were processed. It had newspaper articles, copies of Hitlerian decrees, bits from history books (all translated into several languages) from 1933 up through the war. It showed how THIS right was taken away one month, and THAT show trial was held six months later, and ANOTHER oppressive decree followed on the heels of the previous...

I had always thought that Hitler took over and BOOM! -- full on fascist dictatorship immediately. But the exhibit showed how there was a step-by-step descent into madness.

It made me wonder what the "tick-tock" of a tumble-down would look like. What's the day-to-day view in a country that's falling apart? I reckon it's what we're seeing now. And under the first black president, no less.

Enjoy the present! As bad as they are, THESE will someday be seen as the good old days. At least the lights come on, the water runs from the taps and you can buy food with green pieces of paper. But someday -- soon?

 
At 2:53 PM, Blogger edgar said...

Hello Weaseldog,

I can't imagine what it would be like to be so desperate for clownbux that I would go down in a hole and dig for coal day after day, or go to the hell hole afghanistan. The center will give in a big way when the people doing the dirty work begin to realize they are being ruthlessly hosed by the maggots.

 
At 8:36 PM, Blogger Dave Dubya said...

The oil debacle in the Gulf and the market's "flash crash" should be plenty to start bringing the pattern in view.

The Karmic Wheel turns...

 
At 11:40 PM, Blogger Bukko Canukko said...

It's still May, and Israel has attacked the group of boats trying to defy the Gaza blockade. Killed a buncha people, pissed off the Turks (their one Muslim ally in the region) and will likely start more rioting/missile attacks by Hezbollah. Further vindication for your call on May!

 

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