Juggling Dynamite

This discussion looks at the evolution of economics into a dominant global theory built on mathematical models and flawed assumptions. Also some insightful observations about “boring bankers” being banned from Bretton Woods in 1944, the empowering of finance since, as well as the political influences trumping democracy to dictate policies across the free world.

Yanis Varoufakis is the former finance minister of Greece, an economist, and the author of the book And the Weak Suffer What They Must?: Europe’s Crisis and America’s Economic Future. Recently, he was joined at LIVE from the NYPL by Noam Chomsky, the prolific linguist, social critic, and political activist. For this week’s episode of the New York Public Library Podcast, we’re proud to present Varoufakis and Chomsky discussing financial collapse, the euro, and “the sickest joke in the history of humankind.”Here is a direct video link.

The high-frequency algos went wild blasting millions of buy orders at risk markets yesterday afternoon on headlines that OPEC members might agree in November to freeze production near all time highs. But this morning sober thoughts are dawning that capping output at the highest levels in history–while the many other non-OPEC producers continue to pump-for-their-life amid slumping global demand–is not likely to sop up the excess supply here.  This chart of OPEC production since 1990 offers perspective.

Not only that, but as shown here in my partner Cory Venable’s chart of oil (WTI) since 2007, last cycle in 2008 (when OPEC had more swing sway than today),  they also agreed to cut in September after prices had fallen from $148 to around $100 a barrel.  They then cut twice more in October and December 2008 as prices collapsed 60% to the $40 range.

Apart from OPEC having less swing influence today, another obvious difference this cycle is that oil prices have already fallen and languished in the $40’s for 20 months since January 2015, and still global demand has continued to weaken.

Like central banks who are observing the economy today with ZIRP bullets rather than that 5%+ of loosening power they wielded in September 2007, global oil producers are not in the position of demand influence they once took for granted.

Today in the mean reversion phase of what was the largest credit-driven supercycle in human history, price cuts–whether on the cost of capital or of oil–are not enough.  Consumers, sick and tired from too much consumption, have adopted a new obsession:  saving more and spending less.   In the process, old prods and masters have lost their potency.

All the clean energy and electric vehicles in the world will be insufficient to combat climate change so long as animal consumption keeps soaring. That’s the conclusion of leading researchers at Oxford, who found earlier this year that emissions from food production will eat up a whopping 50 percent of our carbon budget in a few decades.  Thinking people who care about human sustainability are called on to evolve to smarter eating habits.

Some are leading the charge.  Patrick Brown, who rose to prominence as a geneticist at Stanford pioneering DNA technology that transformed genetic research is now a biochemist and founder of Impossible Foods which has engineered a veggie burger that bleeds and tastes like meat.   See: Why this bloody veggie burger may be the Tesla of foods.

Also listen to this enlightening podcast discussion with Brown, here is a direct audio link.

‘Patrick Brown on plant-meat that bleeds and the science of flavor’ by The Ezra Klein Show https://t.co/RqhT6AenC5

— Danielle Park (@kdaniellepark) September 29, 2016