Juggling Dynamite

Danielle was a guest today on Talk Digital Network talking about recent developments in the world economy and markets.  You can listen to an audio clip of the segment here.

Blast from the past: the idea of banning smoking inside public buildings was considered absurd and impossible for decades. But then it was slowly acknowledged that smokers were harming the health of others by continuing in this practice. Burning fossil fuels is indoor smoking on a global scale. Those who want to keep doing it and block smarter policies are degrading the environment and harming the health and viability of everyone else. This is  a key reason that change to non-emitting, alternative energy is inevitable.  The enormous cost savings, increased efficiency and productivity, are the other glaringly obvious reasons to evolve.

Here is a direct video link to a TV report on the evolution of public sentiment on smoking indoors from 1973 to 2007.

Also see:  30 years of oil and gas pipeline accidents mapped:

“The oil industry says this is the safer way, but that doesn’t mean this is safe,” says Stover. “Property is damaged. People are killed. There is no way to safely transport fossil fuels.”

Below is a time lapse map of fatalities resulting from pipeline incidents between 1986 and 2016. Incidents with fatalities accounted for 372 of all significant 9,006 pipeline related incidents that have occurred over the last twenty years. Red dots indicate incidents that resulted in fatalities and black dots indicate incidents without fatalities that could be geolocated

https://georgejosephmapping.carto.com/builder/4c8d374a-b665-11e6-826e-0ef7f98ade21/embed

For a few years I have been warning that higher education costs have escalated uncontrollably as wages for the masses have flat lined. As with autos and housing, the stop gap that enabled prices to vault well beyond income and productive utility, has been the availability of credit underwritten by the government and often packaged into securities sold by Wall Street.

Not surprisingly, a growing number of students are now defaulting on these loans because they have insufficient income to make the payments. In the process, investors are facing mounting risk in the so called “AAA bonds” that securitized these loans. See: $40 Billion of AAA loans at risk of becoming junk. With $1.3 trillion+ in student loans now outstanding, risk-repricing here is just getting started and the ramifications will be widely felt.

For more insight on how higher education devolved into yet another credit-fueled-price bubble in search of a bust, see: How American universities turned into corporations. You can also watch documentaries like Ivory Tower.  Here is a direct video link to the trailer.

Here again, policies and practices that have grossly enriched administrators and corporations running this self-imploding financial model, are leaving our economy weakened in the process, with consumers struggling under crushing debt.  Alert to older folks:  this is also holding young people back from forming households and starting families, and buying all that expensive real estate that Baby Boomers are hoping to off-load.

The cost of these bad debts is already flowing back onto the taxpayer tab as usual.  See:  US to forgive at least $108 billion of student debt in coming years.

Another Ponzi-like financial fiasco that ends up enriching a few at the front end of the origination process, at the expense of everything else.  These self-destructive models must end.  Costs need to move back down in line with incomes to be sustainable.  Adding even more debt, to sustain unreasonable prices, only makes the costs even greater in the end.

One small step for sanity, the rule of law and accountability: the SEC has told an important court that exchanges should not be exempt from investor lawsuits that allege that the exchanges privileged High Frequency Trading firms (HFT).

Thanks to years of being allowed to purchase high speed robbery of other legitimate investors, HFT firms have amassed very deep pockets indeed. May herds of litigation lawyers now go after these predators like rabid dogs. So, so deserved. See: SEC supports pension funds in dispute over HFT:

A group of public and private pension funds is suing a number of high profile US exchanges – including NYSE, NASDAQ and Bats – on the grounds that services provided by the exchanges to HFT firms allowed those firms to front-run the pension funds.

Their claim had initially been dismissed by the court on the grounds that the exchanges had immunity. However the pension funds appealed and have found an important ally in the SEC which said immunity applies to the exchanges only when they “act as regulators of their members” and not as service providers.

The case is being heard in the US Court of Appeals for the Second Circuit, which hears appeals for the Court for the Southern District of NY. The latter is the center for much securities market litigation due to its proximity to Wall Street.