Cycles: Shorter and faster

Another factor keeping capex weak is poor visibility on global growth.

The rate of change in our economists’ Global Leading Indicator, which tracks ten early indicators of global activity, suggests that cycles are becoming shorter over the last few years, i.e. neither positive nor negative data points persist for too long.

This uncertainty provides a reason for companies to delay long-term capex and instead opt for as-a-service alternatives that provide greater flexibility. But, extending this argument on outsourcing capital intensity to its extreme would also imply shorter capex cycles for the users. If the advent of ERP software led to more efficient supply chains and shorter inventory cycles, we wonder if the rise in tech-driven services business models could do the same for capital investment cycles.

In other words, will short business cycles beget shorter business cycles?

2nd August 2015

By Alan R. Adaschik

Guest Writer for Wake Up World

To most Americans, the notion of our government having been overthrown is the fodder of conspiracy nuts or the province of people out of touch with reality. However, not only do the vast majority of Americans have no clue our government was overthrown at the start of the 20th century, they also have no comprehension of the insane and exorbitant price we are collectively paying as a result.

America once truly was a land of freedom and opportunity, yet without our knowledge, everything changed upon of passage of the Federal Reserve Act in 1913. These changes where extensive in regard to how our government functioned, but from a citizen’s point of view nothing major or important happened. This was no accident but instead, an important aspect of their plan. The changes Americans would experience came slowly at first so nobody noticed or become alarmed, but eventually Americans were put on the rollercoaster ride we live with today.

Almost all Americans know something is terribly wrong with our ship of state, but most of us have no idea what is wrong or how it can be fixed. As a result, we sit back and watch helplessly as the American dream crumbles and dies around us…

How a Private Banking System Works

(The following is an been excerpted from Alan R. Adaschik’s book: “100 Years of Deception: A Blueprint for the Destruction of a Nation”.)

In 1913, Congress made the Federal Reserve Bank the central bank of the United States. This name is the epitome of deception. First of all, because of the passage of Amendment XVII, we no longer had a “federal” government. Amendment XVII transformed our federal government into a national government. Thus, there was nothing federal about the Federal Reserve Bank. Furthermore, it is not an agency or a part of our government. Instead, it is a privately owned banking cartel accountable to no one other than the people who own it. The Fed is not reserve of any kind and has nothing to do with reserves. Finally, it is not even a bank because no one deposits money with the Fed.

The best description which applies to the Fed is that it is a money pump for those who own it and this enables these people to harvest huge amounts of money from working Americans without giving them anything in return. In other words, the Federal Reserve Bank is a racket far worse than a Ponzi scheme or Mafia created con game. However, the tragedy of our situation is that the Fed is racket which Congress made legal by voting it into existence.

Money is a medium of exchange and the study of its use is called economics. In days gone by, bartering was the order of the day. If you had corn and wanted wheat, and I had wheat and wanted corn, we would decide how much of one commodity was equivalent to the other and make an exchange on this basis. However, bartering is an awkward process because of the unwieldy items involved. Obviously, exchanges of goods would be facilitated if people used something less cumbersome as a medium of exchange such as gold or silver. If I grow wheat, by exchanging my wheat for gold this permits me to obtain other things conveniently when I want them. Thus hard to find metals like gold and silver became widely used mediums of exchange.

Once people started using precious metals to trade goods, the need to transform these metals into standardized amounts became necessary. This led to the development of rudimentary coins; whereby a ruling authority would weigh out various amounts of these precious metals and stamp them as to purity and weight. Once this practice became common, it was only a matter of time before coins took on their characteristic disc shape and were impressed with a mint date and the likenesses of important officials. With the development of coinage, a person could exchange the fruits of their labor for coins and use them to obtain other things when convenient. During good times, some people ended up with more coins than they needed. Thus they had to find a safe place to keep them. This brought the goldsmith into the picture.

Goldsmiths worked with precious metals and as a result, needed a safe or strongbox within which they would keep their supplies. Having this capability, it made sense for people to take their excess coins to the goldsmith for safekeeping. Upon doing so, the goldsmith gave them a written receipt for the amount of coins being stored. Soon people realized that instead of trading coins for the things they needed they could conveniently trade the receipts instead. Thus paper currency was born and this blessing freed people from carrying bags of bulky coins when they went to market.

This rudimentary monetary system worked well in small agrarian economies, but as villages turned into towns and towns into cities, a need to borrow money developed and who was better positioned to loan money than the goldsmith. Not only did he have his own money on hand, but he also held other people’s money which was sitting in his coffers doing nothing. Of course, if the goldsmith was going to loan other people’s money, he needed to share some of the interest he earned with them. This was the start of modern banking. The goldsmiths were our first bankers. People would entrust their money to the banker/goldsmith and instead of paying for this service, he would pay them a share of the interest he received from loaning their money to other people. From a depositor’s or borrower’s perspective this made sense, was beneficial, and appeared reasonable. However, appearances can be deceiving and how deceiving will soon be addressed.

If people are going to borrow money from a goldsmith, for obvious reasons, it would be far more convenient if the loan was made in paper demand notes instead of coins. However, the demand notes presently in circulation were for all the coins held by the goldsmith. How could the goldsmith issue demand notes on coins which he did not have? Being a clever fellow, the goldsmith solved his quandary by reasoning as follows: It was a rare occurrence when someone retrieved all the coins they deposited with me. Therefore, if I issued demand notes for more coins than I had, the chances are that I would always have sufficient money on hand to cover the notes which were redeemed by one or even several of my depositors. This line of reasoning made sense, so our enterprising goldsmith went out on the limb and adopted this practice. Upon so doing, fractional banking was born.

No one would be injured or hurt by this practice unless there was a run on the goldsmith’s strongbox. Aside from this possibility, this development was a blessing to society. However, unknown to everyone else, it was a greater blessing to the goldsmith. In fact, it was so much greater that the goldsmiths became far wealthier than an average citizen. For every loan made by the goldsmith, the borrower had to pay the goldsmith not only the interest accrued by the loan, but also the total amount originally borrowed and this was true for every loan the goldsmith made. The borrower was happy because he was able to obtain something he wanted before he earned the money to buy it. The fact that this privilege also cost him the interest he agreed to pay did not dampen his enthusiasm. On the other hand, the goldsmith was far happier than the borrower. He was reaping huge returns from his loans and he was loaning money to every borrower in town. This state of affairs made the goldsmith very wealthy and it was this unconscionable wealth which positioned the goldsmith to hold sway over the institutions of society and in time, even over governments.

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This Sept. 10, 2014 photo provided by the Idaho Dept. of Fish and Game shows a mixture of wild and hatchery-raised sockeye salmon released into Redfish Lake in central Idaho to spawn naturally. (Photo: Chris Kozfkay, AP)

Freakishly hot, dry weather in the Pacific Northwest is killing millions of fish in the overheated waters of the region's rivers and streams.

“We’ve lost about 1.5 million juvenile fish this year due to drought conditions at our hatcheries,” Ron Warren of Washington State's Department of Fish and Wildlife said in a statement. “This is unlike anything we’ve seen for some time."

Sockeye salmon losses in the Columbia River due to the heat are in the hundreds of thousands, said Jeff Fryer, senior fishery scientist with the river's Inter-Tribal Fish Commission. The fish were returning from the ocean to spawn when the "unprecedented" warm water killed them, he said.

Water temperatures in the Columbia River — part of which runs along the border of Oregon and Washington — reached the low 70s shortly after July 4, something that doesn't usually happen until August, if at all, Fryer said.

High temperatures — coupled with the low water levels — can be lethal to fish, according to the Oregon Department of Fish and Wildlife. With no end to the drought in sight, there could be additional fish die-offs, said Rod French, a fish biologist with the department.

Dead and distressed sockeye salmon found earlier this month in the Deschutes River in Oregon likely came from the Columbia River and were bound for other locations before they swam into the Deschutes in search of cooler water, the department said. Early pathology results suggest they died from columnaris, a bacterial infection typically associated with high water temperatures and/or low levels of dissolved oxygen.

In Idaho, "it's a tough year for all (migrating) fish, including sockeye," Mike Peterson, Idaho Fish and Game's senior sockeye research biologist, said in a statement.

Recreational fishermen in the region are also feeling the heat: Warm stream temperatures due to low flows and hot weather cause fish trauma, disease, and deaths, which has prompted the closing of streams to all fishing along the Washington Cascades, Richard Heim of the National Oceanic and Atmospheric Administrationwrote in this week's U.S. Drought Monitor report.

“When streams get too warm, fish are stressed and as a result the fishing goes downhill fast,” Rick Hargrave, information and education division administrator at the Oregon Department of Fish and Wildlife, said in a statement. “Fish stop biting or retreat to deeper, cooler water where they are harder to catch."

July will likely be one of Seattle's hottest single months on record, the National Weather Service reported.

On Friday, the city hit 90 degrees for the 11th time this summer. That's an all-time record for normally mild Seattle.

The current heat wave is expected to last into early next week. Meanwhile, 100% of Washington and Oregon are now in a drought at the same time, something that hasn't happened since 2001.

The trouble for the fish actually began months ago, when a lack of snowpack from an unusually warm winter resulted in drought conditions throughout much of the Pacific Northwest.

Typically, a decent snowpack slowly provides water to rivers and streams, helping to sustain fish through the drier summer months, according to the Washington Department of Fish and Wildlife. But, with little or no snowpack, flows in many rivers have dropped significantly and water temperatures have increased — deadly conditions for fish.

Obama to require steeper emissions cuts from US power plants

NEW YORK (AP) — President Barack Obama will impose even steeper cuts on greenhouse gas emissions from U.S. power plants than previously expected, senior administration officials said Sunday, in what the president called the most significant step the U.S. has ever taken to fight global warming.

A year after proposing unprecedented carbon dioxide limits, the Obama administration was poised to finalize the rule at a White House event on Monday. Obama, in a video posted to Facebook, said the limits were backed up by decades of data and facts showing that without tough action, the world will face more extreme weather and escalating health problems like asthma.

"Climate change is not a problem for another generation," Obama said. "Not anymore."

In his initial proposal, Obama had mandated a 30 percent nationwide cut in carbon dioxide emissions by 2030, compared to 2005 levels. The final version, which follows extensive consultations with environmental groups and the energy industry, will require a 32 percent cut instead, according to Obama administration officials, who weren't authorized to comment by name and requested anonymity.

Opponents said they would sue the government immediately. They also planned to ask the courts to put the rule on hold while legal challenges play out.

The final version also gives states an additional two years — until 2022 — to comply, officials said, yielding to complaints that the original deadline was too soon. States will also have until 2018 instead of 2017 to submit their plans for how they intend to meet their targets.

But the administration will attempt to incentivize states to take action earlier by offering credits to states that boost renewable sources like wind and solar in 2020 and 2021, officials said.

The focus on renewables marks a significant shift from the earlier version that sought to accelerate the ongoing shift from coal-fired power to natural gas, which emits far less carbon dioxide. The final rule aims to keep the share of natural gas in the nation's power mix the same as it is now.

The stricter limits included in the final plan were certain to incense energy industry advocates who had already balked at the more lenient limits in the proposed plan. But the Obama administration said its tweaks would cut energy costs and address concerns about power grid reliability.

The Obama administration previously predicted the emissions limits will cost up to $8.8 billion annually by 2030, although it says those costs will be far outweighed by health savings from fewer asthma attacks and other benefits. The actual price won't be clear until states decide how they'll reach their targets, but the administration has projected the rule would raise electricity prices about 4.9 percent by 2020 and prompt coal-fired power plants to close.

In the works for years, the power plant rule forms the cornerstone of Obama's plan to curb U.S. emissions and keep global temperatures from climbing, and its success is pivotal to the legacy Obama hopes to leave on climate change. Never before has the U.S. sought to restrict carbon dioxide from existing power plants.

By clamping down on power plant emissions, Obama is also working to increase his leverage and credibility with other nations whose commitments he's seeking for a global climate treaty to be finalized later this year in Paris. As its contribution to that treaty, the U.S. has pledged to cut overall emissions 26 percent to 28 percent by 2025, compared to 2005. Other major polluting nations have also stepped up including China, which pledged to halt its growth in emissions by 2030 despite an economy that's still growing.

America's largest source of greenhouse gases, power plants account for roughly one-third of all U.S. emissions of carbon dioxide and other heat-trapping gases blamed for global warming. Obama's rule assigns customized targets to each state, then leaves it up to the state to determine how to meet their targets.

Even before the rule was finalized, more than a dozen states announced plans to fight it. At the urging of Senate Majority Leader Mitch McConnell of Kentucky, some Republican governors have declared they'll simply refuse to comply, setting up a certain confrontation with the EPA, which by law can force its own plan on states that fail to submit implementation plans.

Yet even in many of those states, power companies and local utility authorities have started preparing plans to meet the targets. New, more efficient plants that are replacing older and dirtier ones have already pushed emissions down nearly 13 percent since 2005, putting them about halfway to meeting Obama's goal.

In Congress, lawmakers have sought to use legislation to stop Obama's regulation, and McConnell has tried previously to use an obscure, rarely successful maneuver under the Congressional Review Act to allow Congress to vote it down.

The more serious threat to Obama's rule will likely come in the courts. The Electric Reliability Coordinating Council, which represents energy companies, said 20 to 30 states were poised to join with industry in suing over the rule.

The Obama administration has a mixed track record in fending off legal challenges to its climate rules. Earlier this year, a federal appeals court ruled against 15 states and a coal company that tried to block the power plant rule before it was finalized. The Supreme Court has also affirmed Obama's authority to regulate pollution crossing state lines and to use the decades-old Clean Air Act to reduce greenhouse gases — the legal underpinning for the power plant rule.

But the high court in June ruled against his mercury emissions limits, arguing the EPA failed to properly account for costs. Federal courts have also forced Obama to redo other clean air standards that industry groups complained were too onerous.

With the end of Obama's presidency drawing nearer, his climate efforts have become increasingly entangled in the next presidential election. The power plant rule won't go into effect until long after Obama leaves office, putting its implementation in the hands of his successor. Among other Republican critics, 2016 candidate and Wisconsin Gov. Scott Walker has said he would drastically scale down the EPA if elected and shift most of its duties to state regulators.

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Reach Josh Lederman on Twitter at http://twitter.com/joshledermanAP

A message purportedly from Mullah Akhtar Mohammad Mansoor urges unity among fighters. 'This is a big responsibility for us'