But Klein was intellectually unfazed. Rather than re-think the economicist premises of her recent radicalism, she set out to synthesize her old worldview with the post-9/11 world. “I felt it emotionally,” she told The New York Times, “before I understood it factually.” Doggedly connecting the dots, she discovered that the Iraq war was–guess what?–part of the same economic tissue that connected Nike and the World Trade Organization. Klein is nothing if not a totalistic thinker. Everything always adds up, and darkly. the new republic

What has always struck me about Ms. Klein is that her world view admits no possibility of doubt, much less error. She knows the truth and sets out to find the facts that back her up. Chait, a rather more nuanced thinker, finds more than a few facts which shoot her down. Not that it matters: to the sort of people who read Klein, “truthiness” is more important than actual fact. And much more interesting.

A number of bloggers have pointed out that at least Boshcoff is honest.

It is time for the West (and Newfoundland and Nova Scotia) to make it very clear to the Boshcoffs and the Dions that this sort of a revenue grab will have a single consequence: the end of Canada as a nation. I am old enough to have been around for NEP I and I saw the anger first hand in British Columbia and Alberta. Now Saskatchewan will join the party.

Think Bloc Quebecois in Parliament and an activist, separatist, movement at a regional level. Paint this revenue grab “Green” is not going to work simply because “Green” is not selling as it did when Dion was elected leader of the Liberal Party.

There will be a lot of industry solutions to this problem: reducing investment, reducing production, using carbon sequestration as a weapon (goofy as it is as science, its costs can be passed right along to the silly buggers in Ontario in the form of higher oil prices). But there will also be a final recognition that there is really very little Eastern Canada can do for the New West save sanctimoniously claim to be raping us in the name of Green rather than Greed.

Bye guys, best of luck; hope you can do something about that air pollution problem - you know the real one not the CO2 BS. But of course you are…you are losing manufacturing jobs. Fast. And you will, of course, lose more as investment in the oil patch decreases because (you morons) nearly 50% of that investment ends up in Ontario. So no body will be able to say that the Eastern Bastards are not doing their bit to be green: they are actually hollowing out their economy….Bravo, but excuse us if we are not willing to hollow out ours.

Tony Curzon Price writes a bit about oil prices and how the high price of oil is likely due to speculation. He takes The Economist to task on the basis that the “free market” is not working.

Mr. Price seems to be incapable of understanding the critical role speculators play in discovering price. He quotes George Soros “Oil prices are high because of a series of self-feeding beliefs, which, as George Soros says, are ‘intellectually unsound, potentially destabilising and distinctly harmful’. Soros has it about right and I have to bet he is short in the oil market.

Markets correct, often violently. The oil market is no different. Sometime in the next few days, weeks or months, the tankers will rush to port. When they do the price will fall and the shorts will make perhaps the biggest killing ever seen on the planet. And what they are being paid for is providing the needed correction to a market in which real supply and real demand are in rough balance but there is a perceived gap. That is the value of the short seller in any market.

But the real danger lies in the details. There are anti-DRM circumvention measures and “ISPs would be obligated to inform subscribers when a complaint has been launched against the consumer by a the owner of a copyright, however they would also be obliged to track that user’s Internet activity for six months in case the information became necessary for legal proceedings.”

The Globe and Mail article makes no mention of the current media levy on all recordable media nor does it mention the private sharing right which has protected Canadians from the lunacy of the Digital Millennium Copyright Act.

Two things are evident: first, now is the time to grab those torrents and MP3s. Second, hard drive swapping, thumb drives and such like have apparently slipped under the technological radar. Sneaker nets are very powerful when it comes to swapping big files.

One other thing is evident as well, the CPC has no spine at all when it comes to facing down the dying copyright interests in the United States.

18 minutes of your life. Malcolm Gladwell (who could have a career as a stand-up). Spaghetti sauce.

via Bob Lefsetz who runs it about music. But it is a very much bigger point.

Littering my desk are the products of China. USB ports and Canon cameras. China’s rise in the world is made on products which, as Fallows has pointed out before, involve neither design nor marketing. China can never be dismissed; but a nation in which 90% of its major cities are close to “out of water” is not a threat regardless of the missiles at its command. The real Chinese Revolution is just beginning.

I suspect we will be shocked and surprised as China shrugs off a century of corruption and economic idiocy. And we’ll adapt.

My very old pals in Shaunavon Sask are sitting pretty because the Bakken forgot to stop at the Canada US border.

Jim Griffin is a smart guy and Warners is smart to hire him. Of course they would have been brilliant had they adopted the “music as service model” a week after Napster was founded which would be, well nearly a decade ago.

But Kurzweil had a special confidence that grew from a habit of mind he’d been cultivating for years: He thought exponentially. To illustrate what this means, consider the following quiz: 2, 4, ?, ?.

What are the missing numbers? Many people will say 6 and 8. This suggests a linear function. But some will say the missing numbers are 8 and 16. This suggests an exponential function. (Of course, both answers are correct. This is a test of thinking style, not math skills.) wired

Now I am not a math whiz but isn’t another possible sequence 2, 4, 16, 256…ie. 2×2=4, 4×4=16, 16×16=256.

Stuff can happen very, very fast.

People like Jim Kunstler can barely contain their glee. After all, the potential collapse of the American financial system just proved that George Bush, the suburbs, greedy Wall Streeters and sleazy mortgage merchants are just as bad as Kunstler has been saying they are. Throw in the rising price of oil and the falling dollar and the end of economic life as we know it - at least in America - is just around the corner.

Now, as it happens, I don’t live in America and from where I am sitting the “marking to market” of the sub-prime mortgage market, assorted bundled credit card debt and mounds of leveraged buyout corporate paper seems both necessary and manageable. The decline of the American dollar - given the US trade deficit and ongoing budget deficit - is also necessary and can be controlled to a degree. A decade and a half of capital export has to be paid for and that payment will take the form of a significant reduction in Americans standards of living.

How big a reduction and how it is distributed is, at the moment, unknown. However, to take a simple example, if the American dollar continues to decline the price of oil in dollars will continue to rise (although there is an awful lot of speculative froth in the oil market). Gas will go to $5.00 a gallon and this will take a chunk out of people’s disposable income. Similarly, consumer goods made overseas will rise in price.

On the other hand, things like houses and rent are likely to fall and fall fast. Not good if you own a house with a big mortgage, but encouraging if you are renting and hoping to buy.

The real question is how quickly this all happens. If it occurs over a few years the dislocations will be painful but possible. However, if it occurs in a matter of months the foundations of the American economy will be threatened.

At this point the Federal Reserve is pumping money into the system to try and extend the adjustment period. The worry is that that extension may be purchased with bad decisions and that those decisions will further erode the currency:

Paper dollars are technically Federal Reserve Notes, which means they are liabilities of the Fed. When it puts newly minted notes into circulation it does so by buying assets, usually U.S. treasuries, which it then holds on its balance sheet to offset that liability. By swapping treasuries for mortgages, the Fed effectively alters the compilation of its balance sheet and the backing of its notes.

However, backing paper money with mortgages is nothing new. The French tried it in the late 18th Century, and it lead to hyperinflation. Assignats, which were first issued in 1790 to help finance the French revolution, were backed by mortgages on confiscated church properties. Although the stolen underlying collateral did have some value, the revolutionaries saw no reason to limit how many Assignats were printed, which resulted in massive depreciation. Within three years, price controls were introduced and failure to accept Assignats, initially an offence subject to six years in prison, was made a capital crime. By 1799 the currency was completely worthless. 321gold.com

Central bankers know this stuff. To a degree the Fed is willing to run the risk of holding potentially worthless collateral in order to preserve the overall system. As a “one off” the Bear Stearns loan is not completely idiotic; however, as a pattern such loans could sink the value of the dollar in a matter of months.

Canada is in an odd position in all this. Our banks, while they took on some sub-prime exposure, have not been lending recklessly. Our governments, federal and some provincial, have a decade and a half of zero deficits and, in many cases budget surpluses. We have relatively low inflation. We have a huge endowment of ever more valuable oil and gas.

While we are, of course, exposed to the economy of our largest trading partner, our economy has been decoupling from the American economy for years. Which can be seen in our dollar’s strength relative to the USD. There is no reason to believe that the pain in the US will cross the border.

The US is undergoing a reality check. It’s political and financial systems have to re-align themselves so that budget and trade deficits are first reduced and then eliminated. Lending into bubbles will cause trillions of dollars to simply be flushed from the system. However, at the end of this process America will still have a huge economy and a vast capacity to invent, manufacture, design, distribute and market high value goods and services. If America can get its financial and political house in order there is every reason to believe it can beat the bears and emerge as an economic, scientific and cultural powerhouse.

With intelligent, realistic, decisions the contraction and re-emergence could take a couple of unpleasant years. With the wrong decisions, or, worse, no decisions or panic, a decade could be wasted.

Update: blazingcatfur notes that JP Morgan has just bought Bear Stearns for $2.00 per share. It closed Friday at $30.00 per share. Marked to market indeed.

Update:

JPMorgan today agreed to buy Bear Stearns, the second- biggest underwriter of U.S. mortgage securities, for $240 million, less than a 10th of its value last week. In order to strike a deal before the opening of Tokyo trading, the Fed agreed to help JPMorgan finance up to $30 billion of Bear Stearns “less liquid assets.” bloomberg