G20 - The Outcome

[Huguenot]

Sorry, on re-reading, you were referring to wage deflation as a threat to repayment schedules? Well, yes and no.

From a bank-centric point of view, the banks are only required to make profit over and above costs. If costs are dropping through deflation, then service fees such as interest can drop accordingly. This is preferable to bankruptcy - the natural consequence of excessive repayment defaults.

Tragically this only applies if the employees of the banks suffer the long term consequences of their decisions. It doesn't work if one annual bonus is enough to keep them in gold slippers for life.

[Huguenot]

So what is a more palatable solution...?

I'd like to see:

*an increase in cash reserves compared with loan exposure

*a reduction in repayment periods for credit (ensuring the real economic environment for repayment schedules is more transparent)

*bonus payments for senior financial executives vested in shares over decades not months (exposing them to the long term impact of short term decisions, encouraging them to remain with one firm rather than more opportunistic behaviour)

*broader bonus terms based on holistic business success rather than divisional targets (meaning executives are exposed to the destruction certain strategies can wreak in other market areas)

*restrictions on derivative products that make speculative investments now, based on projected market conditions in the future

[Marmora Man]

I would second Hugenot's palatable solution in it's entirety.

[mockney piers]

All perfectly sensible, though would clarify the last point to say restrictions on speculation on derivative futures products.

Futures themselves have a perfectly sensible use aimed at reducing risk exposure to possibly harmful conditions in the future (ie to damaging fluctuations in FX rates or commodities prices, say a big building firm having the right to buy steel at a capped price).

[HAL9000]

Huguenot Wrote:

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> Overall I thought the programme was somewhat

> informative, but heavily one-sided.

It does a good job as far as it goes. I don't know of a better or more neutral treatment in this format. It's a pity religious and conspiratorial elements were included - I suspect commercial motives.

> Its proposed solutions ...

I don't subscribe to.

The extant system is unstable and liable to collapse under certain circumstances. As far as I can see, G20 is focused on restoring the system to what it was before. That's not enough, in my view.

The challenge is to apply rigorous and transparent controls that anticipate the likely stresses that Climate Change and Peak Oil will have on the global economy in the not too distant future.

For those who do not see Climate Change and Peak Oil as viable threats, it's a moot point.

[Marmora Man]

I don't see Peak Oil and Climate Change as threats to our very existence that will put us back into HAL9000's stone age (tho' I doubt many of the premises of the latter), but more as part of a changing environment in which we (the human race) are existing and to which we respond / adapt and evolve.

Two centuries ago the Royal Navy was worried that there were not enough oak trees to build future warships - 150 years ago the Victorians were predicting a gridlock in London of horse drawn vehicles and horse dung. Advancing technology did away with the problems. Peak Oil represents a similar situation - predicating disaster based on continuing current trends without proper consideration of emerging and current technology that is already responding to the long predicted exhaustion of oil and other resources.

[SeanMacGabhann]

But worrying about things (constructively) is what we should do surely? It's one thing to say "well, previous problems have been sorted out by ingenuity" but it's moe true to say we often strike lucky, and that luck always runs out

The current financial crisis was predicted by some only to to be told "sush - it's different this time - go away you jeremiah"

[HAL9000]

Marmora Man Wrote:

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> I don't see Peak Oil and Climate Change as threats

> to our very existence that will put us back into

> HAL9000's stone age (tho' I doubt many of the

> premises of the latter),

We've spent the last hundred years turning massive quantities of fossil fuels into human biomass that needs ever more massive quantities of resources to sustain itself, in the process compromising the stability of the planet's climate and our ability to feed ourselves.

If some unforeseen tipping point kicks in we may not have the time to develop technological fixes - that is the danger.

> but more as part of a

> changing environment in which we (the human race)

> are existing and to which we respond / adapt and

> evolve.

Isn't that what I am advocating - but by being proactive rather than complacent?

[david_carnell]

MamoraMan - I think comparing the danger of climate change including the over-heating of the earth rendering vast swathes uninhabitable, to the production of excess horse-dung in Victorian London a little disingenuous?

The trouble with many of the so-called new technologies (although many of them haven't advanced much since the 1980s) is that they remain a distant pipe dream. Take hydrogen fuel cells for example. In theory an excellent alternative to the petrol driven engines of the present. The Bush administration invested billions in it (to the detriment of the electric car btw) but a workable hydrogen car/motorbike/engine remains elusive due to five major, and so far, insurmountable problems (this is care of Joseph Romm, author of The Hype About Hydrogen):

1. Current fuel cell cars cost an average of $1,000,000. This cost has to drop.

2. Current materials cannot store enough hydrogen in a reasonable space to provide the range customers demand.

3. Hydrogen fuel is wildly expensive. Even hydrogen from dirty fossil fuels is two or three times more expensive than gasoline and hydrogen from clean electrolysis even more so.

4. The need for an entire new fuelling infrastructure. Someone is going have to build at least ten or twenty thousand hydrogen fuelling stations, before anybody is going to be interested.

5. Competing technologies will improve over time as well. You have to hope and pray that the competitors in the marketplace don't get any better. Because right now the best car in the marketplace just got a lot better - the hybrid vehicle.

Now, this is just one technology that is seen as a future saviour, has billions spent on it and yet still isn't a realistic alternative to fossil fuels.

Surely what we should be doing in the meantime is making the most efficient use of those fuels and ensuring we burn them in the cleanest way possible. So to argue, which I think you are MM, that we can sit back, relax, and wait for technology to save us seems ostrich-like behaviour.

[louisiana]

Hydrogen car RTAs also quite interesting.

[Brendan]

Kaboom!

[Marmora Man]

MamoraMan - I think comparing the danger of climate change including the over-heating of the earth rendering vast swathes uninhabitable, to the production of excess horse-dung in Victorian London a little disingenuous?

Suggesting I was comparing is disingenuous. I was making the point that extrapolating from a known position without taking into account current and future change has been wrong in the past. HAL9000 doesn't seem to believe that science and technology could resolve the quoted problems - I believe they can.

I am a climate change sceptic - but I know that there's a lot a fine and very clever research and development going on that will reduce reliance on fossil fuels. Thus I do not, personally, lie awake panicking about the end of the world and Peak Oil issues.

Hydrogen fuel cells are but one of many avenues being explored - the recent breakthrough in battery technology making electric powered cars far more realistic is encouraging, particularly when backed by nuclear fusion power stations - which could also make the hydrogen at a low cost (tho' I'm not convinced about DC's cost argument - I spent much time in vessels that produced hydrogen 24/7 through electrolysis - we actually wanted the oxygen and our problem was disposing of the hydrogen overboard quietly).

I am sure human ingenuity and perseverance will resolve the issues - that doesn't mean I'm sitting back and abrogating responsibility - I support the research efforts and have always been an enthusiast for both pure and applied scientific research. Surely only luddites would refuse to applaud new technology.

[HAL9000]

Marmora Man Wrote:

> I was making the point that extrapolating from a known

> position without taking into account current and

> future change has been wrong in the past.

> HAL9000 doesn't seem to believe that science and

> technology could resolve the quoted problems - I

> believe they can.

Your arguments are contradictory.

You do not believe technology can foresee problems but you believe that technology can solve those same problems.

> I am a climate change sceptic - but I know that

> there's a lot a fine and very clever research and

> development going on that will reduce reliance on

> fossil fuels.

Implies the same contradiction.

What exactly is a climate change sceptic?

1. The climate never changes.

2. The climate will remain the same from now onwards.

3. The climate changes but has no effect on mankind.

> I am sure human ingenuity and perseverance will

> resolve the issues

But those qualities are useless when it comes to detecting changes in the climate and extrapolating them into the future?

> I support the

> research efforts and have always been an

> enthusiast for both pure and applied scientific

> research. Surely only luddites would refuse to

> applaud new technology.

But you ignore any research that foresees survival threatening climate change?

Just for the record: I am a great believer in science and technology. It's human nature I don't trust.

[Huguenot]

Neologism #3,277: Fisknacious. [fisk - ney - shuhs] - adjective

Showing latent tendency to fisk; inclined to fisk readily; fisksome

Origin - 2009 EDF, HAL2009, demonstrating tendency to pedantry reflected in fictional sociopathic CPU of similar name

;-)

[HAL9000]

Huguenot Wrote:

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> Neologism #3,277: Fisknacious. ney - shuhs] -

> adjective

>

> Showing latent tendency to fisk; inclined to fisk

> readily; fisksome

>

> Origin - 2009 EDF, HAL2009, demonstrating tendency

> to pedantry reflected in fictional sociopathic CPU

> of similar name

>

> ;-)

You should have seen me before the lobotomy. Daisy, Daisy, .....

(Edited to increase pedantry rating.)

[Jeremy]

Personally I cannot see hydrogen fuel cells taking off any time soon. The vehicles are too complex and expensive, and the process of producing the hydrogen is costly and will take time to scale up. And nobody will buy these cars unless there are enough places to fill up (chicken and egg situation). I think the medium term solution for cars will be to improve efficiency, and to develop hybrid technology.

Nuclear fission is a long, long way from being a feasible source of power. Maybe it will be viable one day, but the truth is that nobody knows. So we really have to look at alternative sources combined with lower consumption, instead of pinning hopes on a technology which may never bear fruit.

[mockney piers]

Basically ever since the enlightenment every time we've assumed that human rationalism and applied science will solve issues, or allow us to control disease, our environment, our markets or even our wars, we've been brought down low.

The level of progress, advancement and problem solving in the last 300 years, is indeed unprecedented, but then so is the severity of our failures. Surely the current mess is an indicator of just how little we can predict or control.

I understand what you're saying Mamora Man, essentially that your pint is half full, but it smacks, albeit in the nicest possible way, of the sort of hubris which always seems to be followed by his old enemy.

There is no room for complacency in the challenges we face, one of the reasons why I keep banging on about investment in education, universities and scientific research needing to be vastly increased. Fusion really is a maybe. we've poured a lot of time and effort and infrastructure over the last 50 odd years, into getting to the point of using enough energy to power a small town to create a few brief seconds of fusion. Hardly an encouraging pace.

The sea-change in our behaviour needs to start now, and can only be a win-win for humanity as a whole. Through cooperation and reasonable behaviour, rather than faith in reason, will we succeed (though the latter might end up helping a lot of course).

[Brendan]

Failing that we can throw some money at inventing a super efficient means of getting rid of large quantities of horse shit and go back to equine transport.*

*This may or may not be some kind of metaphor.

[HAL9000]

I read somewhere that the USA would need something like 300 million horses to replace it's mechanised horsepower. I'm not sure there's enough food on the planet to produce that much horse shit, though.

[mockney piers]

Actually, apart from the metheun issue, is this such a bad plan. Horseys are nice, and less noisy and smelly, no really, and it would appear that the average road speeds in London have budged little since the late victorian era.

And trams are nice too

[Brendan]

Do you mean, Methane? Surely it can be collected in bags or something and used to heat the trams during winter.

[mockney piers]

no no, horses are notoriously talented writers I tell you!!

[Brendan]

I know. Shame about the hooves though, they keep breaking the typewriters, or they would be able to bash out the complete works of Shakespeare a lot more efficiently than all those dam monkeys.

[Huguenot]

Perhaps, then, the Augean Stables could be seen as the inspiration for a contemporary environmental revolution?

[Brendan]

On that note they are actually in the procurement stage of a Herculean* project to install separate storm water and sewage sewers in central London.

*geddit