Possible Futures In A Changing World

For Non-Believers Everywhere

  • This site is a collation and analysis of various information sources to give a big picture view of the factors behind the 2008-2009 crash and what future possibilities might arise.

    Many "alternative" commentators focus on say Peak Oil, or the Real Estate Crash, or 9/11, or the "New World Order", or Environmental Destruction, or Aliens and Black Ops Technologies. Well I've tried to bring all those threads together, because everything really is connected.

    Are you nuts?? Why mention Aliens? Because in a Universe that for all practical purposes is infinite, it seems just as insane to me to assume that humans are the only intelligent lifeform, as it is to assume that unemployed single Mothers with no jobs, income or assets can afford to pay the mortgages on 3 townhouses.

    Also, if you search through the data, it seems likely there was alien involvement in several ancient civilizations and that doesn't even take into account UFOs, crop circles etc. Hell, we couldn't even build the Great Pyramid with our technology today.

    Anyway, back to life on Earth. If you step back from the media and government propaganda and apply just a small amount of discrimination to what you hear and read, it has to appear more and more like mindless drivel with each passing day. Once you've taken that step, it becomes clear that something has to give.

    Then, if you still think life as we have been fortunate to know and live it in the West for the last 50 or so years can happily roll on, well "you ain't been payin attention!"

    However, you do have to go beneath the surface of the "happy surburban motoring utopia" (although that utopia now has cracks appearing in it that are getting harder and harder to ignore) and ask questions with unpleasant answers, if you really want to understand the "dark side" behind the financial collapse.

    Why should you bother? Well mental and physical preparation is going to make a big difference when the crunch comes.

    However, in reality only a few people are actually willing to take an open minded look and to learn what is happening behind the scenes, because most people have too much invested in believing the status quo will roll on.

    Still, if this blog triggers even just a few to take the step, it's worth the effort.

    My personal agenda changes over time and is a mixture of:

    - Trying to help people to wake up and get themselves ready for BIG changes heading straight towards us down the road of history

    - In doing so, perhaps persuade people to consider whether they could change and who knows, maybe change the course of history.

    - For my own ends, to clarify my understanding about the human race as a whole and what the hell we are doing here.

    - Also, writing this all down helps me to get the ideas clear and stops me driving my wife to distraction.

    P.S. Regarding the human race and our general mixed-up-ness, we really should know better by now, but it does seem that we're really slow learners!

2009 Review

Posted by drylightning on February 2, 2010

A run through of the highs and lows of 2009.

Awakening

One of the main themes of this site is that sufficient of us need to awaken, so we reach a critical mass that changes the context of human civilisation i.e. recognise who we really are, how we are related to each other and the rest of life in all its aspects.

I’m not sure but I think there are signs that the awakening is spreading, although in overall numbers it it still a small proportion of the population.

Unfortunately, I think awakening is our only chance. We’re too far down the path to self and environmental destruction to find our way to sustainability by driving hybrids, recycling plastic bags, adding insulation in the roofspace, planting a few trees, or changing to more efficient lightglobes within the context of current society.

Awakening has a multi-layered meaning. Firstly it means lookig at the world through new eyes to understand what is really going on. Ultimately it suggests a spiritual journey to arrive at an awakened state, which is a very personal experience and one that is different for everybody.

For me, awakening is different to and broader than religion, which usually provides a narrower, prescriptive viewpoint. Nor is it about my God is bigger and better than yours, or the only true God (sigh).

Unfortunately, most religions typically embody the same power and hierarchy-based limitations that plague most human institutions, although the essence of being awakened may be present in the original teachings on which the religion is based.

The Economy

Personally I lost money trading in the stock market, by going short when it went long, long, long. What a pisser!

Hindsight being a wonderfully annoying thing, 2009 was one of the best trading opportunities for 10-15 years. The double bottom went in in March and it was up from then on.

That’s the trouble with seeing the big picture and thinking you know what the market should do, it takes you away from what it is actually doing.

On any sane measure using traditional fundamentals, the economy and the favourite mantra “economic growth” appear to be irretrievably f–d in the long term, but in the shorter term all the money that was printed had to go somewhere and the stock market turned out to be the place.

Simply, economic growth is now constrained by the physical limits of the planet and it’s various resources, plus the growing physical / mental /spiritual sickness afflicting more and more people who are caught up in the citizen-as-consumer model.

Peak Oil and Energy

Traditional crude oil production has been bumping along the plateau it’s been on since 2005 at around 85 million barrels per day. There is talk of Iraq raising production to 10 mbpd in a 10 to 20 year timeframe, via the development of dormant fields by foreign oil companies that obtained leases in recent auctions.

However, even if Iraq did reach 10 million mbpd in this 10 to 20 year timeframe, this would only offset the global production decline that is building momentum.

Traditionally in recessions, oil drops to $20-30 a barrel, but it’s stablised around $70-80 this time. If renewed economic growth does (temporarily) occur, oil is likely to go back above $100, throwing the economy back into recession.

Natural Gas

The big change in energy supplies was the uplift in natural gas production in the US obtained through new drilling techniques (fracturing).

There have also been large, new natural gas fields discovered in the US, in particular the Marcellus field (#27 in the map), which holds as much as 500 trillion cubic feet of natural gas – the equivalent of total US gas consumption for 25 years. Even if this estimate is off by 50% or so (and that 500 trillion cubic foot number might be on the LOW side), it’s still a lot of gas.

You’d think this will have to shift the US energy picture, but it’s not clear how yet.

Many cars and trucks can be converted to run on natural gas, but the infrastructure to supply the gas at traditional gas (petrol) outlets doesn’t exist yet.

Politics

How many people now realize that Obama is not the new Messiah, but just an empty suit fronting the same old system?

If you’re one of these people and you can take that on, the next step is to start looking behind the facade of a lot of other stuff to figure out what’s going on behind the scenes.

Given something like 75% of the people making decisions around the US President are the same as the Bush era, how could you get a different outcome?

The same system of “bait and swap” i.e. election flipping between 2 supposedly different political parties “left” and “right” that in reality deliver almost identical outcomes, prevails in most (sic) democracies.

Collapse

The mistake made in late 2008/early 2009 was to predict a straight line descent. Although for some unfortunate people, collapse is here and now, for others it’s business as usual.

Again, at the heart of everything are the fundamental limits of the planet to provide sufficient resources for continued economic growth and hyper consumption. You can print as much money as you like, but that doesn’t create more oil, coal, iron ore, rare earth metals, forests, clean water or topsoil.

Who knows what a collapse timetable will look like? It could be a slow degradation in living standards, or there may be a “black swan” (a major political,’social or environmental disaster) that triggers a sudden change.

Alternative /Alien Energy Technologies

More and more studies suggest that so-called “zero point energy” is available from the “ether” or “vacumn”, in the same way that atomic energy is available from atoms. The prevailing mainstream cosmological theories postulate the existence of  this “dark energy” or “dark matter” to explain the otherwise inexplicable behaviour of the observed Universe.

Several sources suggest that the technology to extract this zero point energy is already available on Earth in “black ops” labs and operations, possibly derived from alien technology, but is kept underwraps for military-political reasons.  See www.projectcamelot.org

Again, without an awakening more / free energy isn’t going to solve the planet’s problems. Either we’ll consume ourselves and the planet to death in a different way, or we’ll use it to create even deadlier weapons e.g. the oft written “planet buster bomb”.

Posted in 2009 Review | Leave a Comment »

Funny Economic Crash Video

Posted by drylightning on February 2, 2010

Gordon Brown is the Prime Minister of the UK. Substitute the President / Premier / Head / Prime Minister for your country and the story is probably equally applicable. Either way it’s damn funny!

Posted in Humor | Leave a Comment »

Real Estate Market Status and Useful Links

Posted by drylightning on June 20, 2009

RealtyTrac® May 2009 U.S. Foreclosure Market Report™

“May 2009 foreclosure activity was the third highest month on record, and marked the third straight month where the total number of properties with foreclosure filings exceeded 300,000 — a first in the history of our report,”

The report shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 321,480 U.S. properties during the month, a decrease of 6 percent from the previous month but an increase of nearly 18 percent from May 2008.

“We expect REO activity to spike in the coming months as foreclosure delays and moratoria implemented by various state laws come to an end.”

Now About All Those Option ARM Mortgages

(courtesy of www.dailyreckoning.com )

You remember the good old Option ARM don’t you? That’s the loan that allows you to choose the size of the payment you make on your monthly mortgage. Typically the loan begins with a twelve month introductory rate. After that, you can choose the minimum payment option.

If you choose the minimum payment option, you actually pay less each month that the interest on your loan. That interest is deferred, but it’s added to your principal. That means your principal is growing all the time. This is why these loans were also referred to as negative amortisation (or neg am) loans. You weren’t paying it off. You were actually growing it.

We hope you’ll bear with us for a moment as we go through this. The reason? There’s a slight sense of relief in markets right now. Everyone is throwing stones at AIG. And with the market putting a few good up days, people are losing the sense that our financial system faces serious problems. But they are trillions of dollars serious. And no amount of pleading by the U.S. Treasury Secretary for bankers to lend will change that. More losses are head.

But what size will the losses be? Another trillion? Another two trillion? Well let’s exclude commercial property and loans securitised with credit card receivables or auto loans. Let’s just look at Option ARMs.

Remember, an Option ARM loan “recasts” after five years to a new principal. The interest rate might even stay the same. But if the loan has been negatively amortising (growing as deferred interest payment are added to the principal), then the size of the loan is going to be much larger (an average of 30%, by some estimates).

Even if you’re paying the same interest rate, households at the margin are going to have a much harder time making minimum payments on loans that are 30% larger. And we’re not talking a small amount here. The Washington Post reports that between 2004 and 2007, over US$750 billion in Option ARM loans were originated. The scary part is that, as of late December last year, 28% of those loans were either delinquent or already in foreclosure.

And that’s before the “recasts” have even hit the borrowers. Most “recasts” don’t happen until five years down the track. That means mortgage holders wouldn’t confront the prospect of a higher monthly payment until 2011 or 2012. The chart below from Credit Suisse shows the pig in the python problem.

Option ARM Reset Schedule

Bernanke has solved the interest rate problem for home buyers with adjustable rate mortgages by slashing short-term rates to zero, effectively. What’s more, he’s conducted purchases of mortgage backed securities by Fannie Mae and Freddie Mac in an attempt to bring down mortgage rates directly.

The looming trouble, however, is that negative amortisation ads to principal. It does so at a time when home prices continue to fall and unemployment is rising. Making a much higher payment is pretty shocking to begin with. It’s near impossible when you’re out of a job.

The trouble will hit sooner than the Credit Suisse chart suggests. Option ARMs automatically recast at the higher principal level once a predetermined loan to value ratio (LTV) is reached. For example, say you take out an Option ARM at an 80% (LTV) and immediately begin making the minimum payment. Your loan automatically recasts at an 85% LTV ratio. In other words, your loan recasts sooner than the five years you expected because of negative amortisation.

This is why the Credit Suisse chart shows a swelling amount of recasts beginning in April of 2009 and peaking in December of this year. It turns out many of those who took out Option ARMs chose the minimum payment. This led to much faster growth in the loan principal, thanks to neg am. And now, it’s going to lead to a much sooner recast of the loan.

As you may know, the current mortgage relief plans in the States, as feeble as they are, do not allow you to refinance your home if you already have negative equity. This means that in the coming months-starting next month-you have millions of home owners who will face much higher monthly payments on their mortgage.

Do you think they’ll pay them? Can they afford to? What will happen to house prices as this wave of neg am Option ARMs goes into default and foreclosure? There could be some real bargains in the housing market.

But for the banks, there will be some real pain. The banks, the insurance companies, the usual suspects, these are the institutions that stand the most to lose from losses on that $750 billion wave of Option ARM recasts. We’re not saying all those loans will go into default. But at the very least, the losses are certain to be taken, even though no one knows how big they will be.

Now maybe all this is “priced in” to bank shares and financial stocks. It’s pretty hard to price in what you don’t know, though. What seems certain is that banks would want to hoard capital in the coming months, not lend it. They face hundreds of billions more in losses, and that’s just from residential real estate (not commercial real estate or corporate bonds).

How will credit recover under those conditions? We reckon it won’t. In fact, the second contraction of the credit crisis could be worse than the first. You should consider that as you ponder your decision to get in our out of the stock market. Think of the number of companies that are already locked out of access to capital and credit. Will that improve in the coming months?

There’s a very real chance it could get much worse. Of course we hope that’s not true. But if it is, it means all those clowns holding press conferences about bailouts and recoveries are just whistling past the grave yard.

Excellent Real Estate Statistics for Sacramento Area

http://sacrealstats.blogspot.com/2009/06/sacramento-regional-real-estate-trends_14.html

Useful Real Estate Links

  • Phoenix Flippers In Trouble
  • Sacramento Flippers In Trouble
  • Sacramento Landing
  • After The Crash
  • Alyssa Katz
  • Soot and Ashes
  • The Housing Bubble Blog
  • Marin Real Estate Bubble
  • Bubble Markets Inventory Tracking
  • Mish’s Blog
  • Calculated Risk
  • Patrick’s Housing Links
  • Bakersfield Bubble
  • Mortgage Lender Implode-O-Meter
  • Countrywide Foreclosures
  • Average Buyer
  • The Baglady
  • Exurban Nation
  • Posted in Uncategorized | Leave a Comment »

     
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