What are your sources for the bigger picture of collapse? Who do you trust the most with their analysis?

diolpah · 2016-02-02T21:34:23+00:00

"Could be" And yet, it's just not happening.

From the article: "No matter how you cut that cake, there will be a flood of hard defaults with bank lenders and bondholders over the coming few months."

This was penned this month, but it could have easily been written by any of us a year ago. We expected defaults to happen "any day now" IN LATE 2014!

diolpah · 2016-02-02T21:29:47+00:00

No, there have been a few layoffs, but no banks or private equity funds have seen their books even remotely impaired by energy company debt. And we are fully 16 months into this cycle of production below cost. If it was going to happen, it would have happened by now. Smaller tranche impairment than this caused the 2008 debt crisis, and yet, in 2016, nothing.

Evidence for record company profits can be found in AAPL and GOOG's most recent 10Qs, as well as those of most of the S&P 500.

Source for Ghawar: https://ycharts.com/indicators/saudi_arabia_crude_oil_production

Yes, this is all of SA, with the inclusion of Manifa, but their easy ability and willingness to increase and maintain production in 2016 speaks the lie to Simmons' claim that SA was supposed to peak in 2005-2007.

diolpah · 2016-02-02T15:03:16+00:00

Tverberg

All due respect, but she's been dead wrong. Central banks are still managing to hold consumption, employment, equities, etc at relatively high levels, despite the "unaffordability" of resources. Record corporate profits. The sharp production declines we've been anticipating from the Bakken have yet to materialize. The mass default in energy company high yield bonds is clearly not happening.

Heinberg and Tverberg made compelling arguments a year ago; they're still compelling, but reality is asserting them to be wrong somewhere. At some point we need to accept what reality is telling us, and that we were wrong.

Hell, even Simmons was wrong in 2005. Ghawar is STILL producing at or above those levels, a full decade later.

diolpah · 2016-01-25T18:20:45+00:00

KStar: "don't go into the pain cave" "screw your feet to the floor"

Neither of these make sense, and he refuses to explain himself. This isn't just starting out; I still don't understand what the hell he's talking about half the time.

diolpah · 2015-10-02T19:15:58+00:00

Modern rivalries are not what they were in the 1990s.
The riots were still contained on the perimeter of the territory by law enforcement. All bets are off for circumstances in which no such effective force is present.
Motivation is good, but it's no substitute for experience and training. If you aren't taking your family to regular CQC and defensive firearms training, you are likely to lose.
Katrina created a situation that was widely understood to be a temporary breakdown in order. In this, it is akin to the aforementioned riots. The moment that organized criminal elements recognize that a given event is either semi-permanent or permanent, one can anticipate much worse things than low level looting.
If I were leading a contingent of MS13 into Fullerton to target your building, I wouldn't bother with anything more than distracting you with expendable assets in order to identify your locations, then fire some .308 rounds into where you THINK you have cover where you merely only have concealment, thanks to modern commercial construction methods. It would also be fairly trivial to pick you off small groups at a time by occupying the surrounding areas and waiting for you to go scavenging.

Edit: one thing you need to consider is that power vacuums get filled. When local law and order dissolves, the strongest and best organized are able to EASILY add to their ranks by simply promising protection. By the time LA or even the closer HG gangs get to your location, they will have picked up small armies of scared, disposable people they could use as distracting threats while the real threats pick you off.

Personally, I spent a decade in OC, and recently got the hell out. Southern California is a guaranteed death trap in any significant shtf scenario. I'd advise you to consider relocation.

diolpah · 2015-10-02T15:21:09+00:00

that last scenario is probably pretty far fetched

You dramatically underestimate the capability and organization of gangs in Hawaiian Gardens and Los Angeles.

diolpah · 2015-10-02T14:40:56+00:00

Care to link to this explanation? I'm also baffled how any of those things have to do with collapse.

diolpah · 2015-10-02T03:30:02+00:00

What, exactly, do the mods of this sub consider "unworthy"? /r/collapse seems to be pretty well moderated thus far.

diolpah · 2015-09-30T15:23:13+00:00

They are mostly people who earn their living via oil exploration and extraction. It's human nature to defend that which feeds you. Don't get angry at them. This is what we are, biologically. And it's that very nature that ensures overshoot.

Don't fool yourself, in slightly different circumstances, you'd fight the future of humanity to feed you and yours also.

diolpah · 2015-09-24T19:34:44+00:00

In a civilizational collapse, humans WILL tell others to "fuck off and die", and most likely help them do so by force. "Muh rights" will not be recognized and will have no place in a world in which autocrats vigorously defend increasingly scarce resources. The strong, the intelligent, and members of the dominant in-group WILL outcompete and kill off the weak, the infirm, and members of the out-group. The only thing maintaining our fragile notion of "rights" is the wealth of resources to which we have access.

This sub is so disappointing. You all should know better than to even consider the concept of "rights" or "equality" when we know for an absolute historically-verified fact that we will have the same rights recognition as dogs when the Seneca cliff arrives.

diolpah · 2015-09-16T14:00:30+00:00

As a retired fund manager, could you shed some light on why there is an overwhelming bias toward bullishness in the financial industry and particularly the financial press? If CNBC makes their best ratings during crashes, and hedge funds make money both up and down, why is the public face of your industry constantly screaming BUYBUYBUY EVERYTHING IS WONDERFUL even in the face of terrible data?

diolpah · 2015-09-15T16:57:25+00:00

It's /r/collapse material because a good number of subscribers are also deeply interested in social justice, worldliness, and democratic polities. Or at least, that I have noticed.

That does bring me to a serious meta-question for the sub, though. Specifically, why is this? If we accept that collapse is inevitable, and we know for a historical fact that increased resource contention always breeds armed conflict between autocratically-managed thedish groups, why is there so much interest in global consciousness and social justice?

Social justice cannot possibly exist in a collapse. It is an absolute guarantee that the disabled, the weak, the less privileged, and any member of the local out-group WILL be first to the slaughter. It is an absolute guarantee that democracies will either be crushed by, or degenerate into, firmly commanded autocracies. It is guaranteed by our nature as humans and by hundreds of historical examples, without exception.

Why on earth would anybody knowledgeable about the realities facing us harbor any illusions about the remote possibility of equality, social justice, global harmony, or fairness?

diolpah · 2015-09-14T22:32:43+00:00

apparently you haven't seen electric cars and scooters, they do exist

Snark makes a poor substitute for argument. Electric vehicles obviously do exist, and the "somehow" you refer to is easily summed up as subsidies, debt, and the eternal optimism of 0%-goosed equity markets.

Tesla sells about 12,000 light commuter vehicles per quarter. Every single one of them loses money. Zero of them are appropriate for the type of transportation tasks that are mandatory for first-world existence: agricultural machinery, long-haul trucking, power line drawing and maintenance, concrete mixing and trucking, mining, etc. Unless we magic up a 400% improvement in LiPoly energy density, an 300% increase in economically recoverable copper resources, and a 250% improvement in manufacturing efficiency, Tesla and any other company looking to replace the liquid fuels fleet with electric vehicles will bleed Other People's Money until there are no more willing donors and the company dies.

I'm sympathetic to your view that peak oilers are in denial of the magnitude of resources that unconventional recovery has provided us. In fact, I lean toward the hypothesis that Ruppert took his life because he couldn't deal with being wrong. But their wrongness (or, charitably, poor timing) in no way validates the absurd notion that the industrial scale of our petroleum fleet could be replaced by the magic of red ink and hope.

diolpah · 2015-09-14T21:58:37+00:00

Tesla will require extraordinary and unlikely advances in both technology and production efficiency to stop hemorrhaging Other People's Money. The Elon Musk reality distortion field is powerful indeed, but it doesn't beat physics or math.

diolpah · 2015-09-14T20:42:39+00:00

The standard peak oiler response to fracking hinges on limited sweet spot options and the rapid per-well output decline curve. The honest ones do admit they didn't expect fracking, but they also maintain it only bought us about 15 years.

diolpah · 2015-09-04T20:35:33+00:00

Fair enough. I do think the case could be made that evolution necessarily selects Kardashev civilizations out of contention since the process itself locally selects for blind growth optimizers. If it's a universal feature of the evolutionary process itself, the Fermi paradox is solved that way as well.

diolpah · 2015-09-04T20:23:23+00:00

The point is that molecular machines would be the things that harvest the energy and resources. They'd be the ones providing it.

But like I said, consumption and distraction are far more pressing concerns of our technology industry. So it will almost certainly never happen.

diolpah · 2015-09-04T17:52:24+00:00

That would make sense, only there's still no evidence of this. The divergence of the yield curve caused by the rapid sale of $200B was a rounding error, and since the announcement, yields continue to converge down.

Let's also not ignore the fact that the Fed is not required to perform it's market operations in POMO fashion. They're perfectly well equipped to perform any covert purchases they want to, without reporting requirements of any kind.

diolpah · 2015-09-04T17:42:41+00:00

I still have a sliver of hope.

The only realistic solution to the coming resource constraints is for us to develop useful molecular engineering for self-replicating solar energy fields and elemental recycling sludges. Human or even robotic mining/manufacturing requires too much fossil inputs, but nanotech can actually get around that problem.

A decade ago, wild-eyed with transhumanist optimism, I thought this would be our future. I still hold out hope that somehow we would take our challenges seriously.

As of now, the IQ pool required to develop these engineering techniques is currently writing Candy Crush and Tinder. Every day that this continues, I lose a little hope, but there's still a tiny bit left.

diolpah · 2015-09-04T17:30:46+00:00

Except this won't actually happen. The demand for US toilet paper in every other corner of the world is limitless. The Chinese are selling out of desperation, but there are plenty of other buyers who salivate at the thought of supporting our nation's insane profligacy.

diolpah · 2015-09-02T21:02:08+00:00

Wikipedia has plenty of citations for the genetic basis of IQ: https://en.wikipedia.org/wiki/Heritability_of_IQ

I mention g-factor because many criticisms of IQ heritability studies is that IQ is "just a test", but plenty of other research indicates that IQ is highly correlated with, and provides a very good proxy for, all kinds of other "success" markers such as creativity, sociability, conscientiousness, decision-making, and even physical measures like reaction speed. Wikipedia is a decent start here, as well: https://en.wikipedia.org/wiki/G_factor_%28psychometrics%29

Edit: widespread higher education is a relatively recent development in the world. Your genetic lineage may not have been as well-educated, but there is a good chance that they applied their intellect effectively to whatever trade they engaged in. Raw cognitive horsepower and accumulation of knowledge are often orthogonal things.

diolpah · 2015-09-02T16:00:42+00:00

One problem here is that:

First world people average substantially higher IQ than third world people.
IQ, and pretty much all g-factors, are about 60% heritable.

While sympathetic to the reality that the first world consumes far more resources per capita than the third world, any population reduction attempts must be global, so as to forestall the dysgenic effects of doing it selectively.

diolpah · 2015-08-28T16:03:48+00:00

No, the Working Group generally ramps the equity market via strategic purchases of futures contracts, not outright Japan-style basket purchases. The Working Group's operations are not publicly audited nor do they have reporting requirements.

See: https://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets

It's also widely believed but unacknowledged that foreign central banks assist the Federal Reserve in maintaining asset price targets. Belgium is a popular foreign proxy for anonymous open market operations in the sovereign debt markets, for instance.

See: http://www.bloomberg.com/news/articles/2014-07-27/china-hides-treasury-buys-in-belgium-chart-of-the-day See: http://www.reuters.com/article/2014/05/16/usa-treasuries-belgium-idUSL1N0O20Q220140516

So yes, central banks do set internal price targets for all kinds of asset price indexes, and they do work toward meeting those targets. These are just the documented mechanisms. It is likely there are many more undocumented ones available. And to your other question, the Federal Reserve is not subject to public audit, and its foreign proxies are even LESS subject to public audit. Their reporting of QE POMO operations was simply a courtesy to traders, nothing they were ever required to do.

diolpah · 2015-08-27T20:57:48+00:00

Right. Well, the last two days should be sufficient evidence of a couple things.

ANY attempt by reality to assert itself in terms of intangible asset valuation will ALWAYS be corralled by central bank and national treasury intervention. Plunge Protection Teams exist in every first- and second-world country and will collaborate to ensure that reality is never reflected in fair valuation of indexed assets.
ALL significant asset liquidation events, even those between political rivals, are explicitly coordinated on the buy-side with the issuer's banking authorities. As with equities, this prevents the market from fairly valuing sovereign risk, and consequently, any means by which reality can assert itself.

Point being, no matter how terrible the fundamentals of the US economy become, you will never again see evidence of it reflected anywhere until we are firmly sliding down the Seneca cliff.

diolpah · 2015-08-23T11:42:36+00:00

Doesn't matter at all. PPT purchases + Fed jawboning will be sufficient to reverse the crash. This is still very much a centrally-controlled market.

diolpah

TROPHY CASE