A man executes his family because both he and his wife lost their jobs.

Does this tragedy represent how the rest of us may feel about our work and place in life, or is this a very isolated case of extreme psychosis?

Frankly, as hard as things are, there is never a reason to prevent children from having their life, no matter what lack of hope a parent has, being right about destiny is not a parental skill.

Although this incident, a man removing the family he and his wife created, may seem to symbolise the times, it does not. It is the act of a person who lost their sanity.

Lupoe and his wife were employed as medical technicians and appear to have sought out childcare from an outside agency and probably underdeclared their income, so were being investigated.

“… Lupoe and his wife had been under investigation for misrepresenting their employment to an outside agency in order to obtain childcare. He claimed that an administrator told the couple on Dec. 23: “You should not even had bothered to come to work today you should have blown your brains out.”

“The couple complained to the human resources department and eventually were offered an apology but two days later the Lupoes were fired, according to the letter.

“They did nothing to the manager who stated such and did not attempt to assist us in the matter, knowing we have no job and five children under 8 years with no place to go. So here we are,” the note said.

“At the bottom of the note, Lupoe wrote, “Oh lord, my God, is there no hope for a widow’s son?”

In his last statement Lupoe reveals the source of his despair. Being brought up himself with no father – his own social bonding and confidence appears based on external assessment. Therefore his self value was excessively fragile, the rather inappropriate comments from his employer appear to have set the man off in a weird direction – proving just how “adequate” he was.

He took possession of his families lives with a gun. Does this auger well for the rest of us? We use terms like “serial killer” or “mass murderer” to brand such behaviour as evil, not to be emulated. To keep it at a distance.

Lupoe’s insanity is not contagious. The managers inappropriate comments are not a cause, they are evidence of contributors to Lupoe’s insanity but it really did not make much difference.

Our world contains fragile people. When trouble really starts to hit, they will make the news stories. They may serve as warnings to the rest of us, but there is little to be learned from the actions of a fragile personality.

In case you have forgot what is causing the “financial crisis” gripping the world in static non-investment, read this NY Times article by Alan Blinder – Six Errors on the Path to the Financial Crisis.

When considered retrospectively, it certainly seems like another one of those things “they should have warned us about”. The role of Government is oversight; but the role of the monetarist post third-way committee of inspired insanity we have been calling Government has been to submit us to ten years of extreme capitalism to prepare the world for some utopia. Trouble is the electorate became greedy as their mortgages became insignificant and their property values escalated things seemed dandy.

Trouble (for Gordon Brown) is that the electorate is swinging away from Tony Blair and his pretense at being a Labour Government in the UK. Gordon Brown’s supreme act of socialism will be to nationalise the banking system? He could. He is not the only Government weighing that option. Is that a financial utopia?

The world just turned a great big corner and we could finally now realise that constant speculation about OWG (One World Government) and being branded with bar codes – the age of fear – the age of conspiracy – it’s over. American culture celebrated this and it celebrated vampires. The walking dead. You gotta wonder why.

It is not the twists and turns of our culture that have caused the financial disaster they are calling “the meltdown”. Read the linked article above for a full description of what caused it (or read Disturbing Trends historically, but that would take far longer).

The way back is to cancel the CDOs that are dragging the system down. Make instruments non-insurable except by the actual current owner and then only allow one payout on insurance hedge bets. Do it retrospectively and wind back some of the nonsense.

It is never going to be a fair recovery when already execs expect to walk away with 30 million dollars in a golden handshake after cash injections by the tax payer. It is not business as usual. Those taking money from the tax payer however legit should consider surrendering a goodly portion of what anyone would recognise as ill gotten gains.

If that is impossible – well it is not impossible, but payment of 61 trillion when no capital is changing hands is impossible. It is either that or allow the economy of the world inflate to enable that additional capital to exist – like an international scale Zimbabwe. Is that where the economies of the world are headed?

Probably not. But the warning signs are there and they are far worse than we ever considered likely. At least it will be a Northern Hemisphere summer as the effects of layoffs start to really bite.

Afterword: also, check this article in the NY Times, especially the last three paragraphs. One guesses that I can quote it – as I have argued the same that Mr Geithner has been arguing (much to my surprise).

Failure is an option. To eject those who now exhibit signs of financial dementia with a safe but realistic exit option is reasonable – but to not effectively insist they are taken out of the future map of investment decisions is futile. If 61 trillion dollars of new capital is added to American and UK pool – both economies will suffer devaluation of what portion that is to current total capital to fund those contracts.

It is an option. It will affect the world economy. But these “bonuses” are based on laws that were being used creatively to squeeze funds for personal retirement funds of executives who did not in fact bring any value beyond actual growth to their own portfolio. It is as though perhaps the world has become so obsessed by gambling which is not surprising considering the nature of the human soul.

There are those who worked for genuine reward and there are those who have not. They know who they are – in the end it does not matter. A country depends upon the intelligence of rich economic manipulators (like insurance giants) to legally exercise choice with money, ultimately led to a plethora of greedy decisions. To fix the problem Western Governments are prepared to continue to inflate their economies, just enough so that leverage takes over and grinds these fruitless contracts out at a huge discount to counter capital gains tax?

In a world with all this additional capital, it has the potential to be extremely inflationary. It may seem like the start of a depression because the banks do not know what liabilities they will suddenly face. It looks like one because all these companies are being driven by a belief that they have to layoff staff like mad. It is utterly silly, decisions being made to make the numbers look good.

Why do we not recognise this for what it obviously is?

Next article to explore that…

It took Bush 8 years to fail to do this. It would have saved an awful lot of public purse squeezing, but then again that was the Bush objective. To bring about financial Armageddon.

Conversely, it has taken President Obama about 48 hours to start moving on regulations that Bush has ignored since September due to his “faith in the market”. The market has behaved pretty much as you would expect with the policies Bush championed.

I predict that if Obama can get his Democrat house to agree to this – that the recession start to be over and may just take one year instead of ten.

Times onLine article

The last laugh – well – look back in horror at GW Bush’s top 20 gaffes. I am sorry, it is both an unhappy memory, a nightmare and far too funny, even this soon after he is gone. Man is he gone.

An unusually large (over 12000 votes) poll conducted by the New Zealand Herald has found previous Prime Minister Helen Clark as the greatest living Kiwi. After the death of Sir Edmund Hillary, hushed whispers have occurred in the corridors of the media. And our country’s largest newspaper canvassed deep and wide our opinions. Looked like Willie Apiata – winner of the Victoria Cross was going to win, then the old leader of the opposisition, Don Brash – said how disgusted he was that Helen Clark was nominated an himself nominated the architect of the Right Wing policies he champions, Sir Roger Douglas.

Don Brash probably sealed it for Helen – no wonder Don lost the leadership of the National party to the Prime Minister In Plaster – John Key (broke his arm as the second act of office – see next article). He is such a terrible politician.

The Herald has been perceived as highly critical of Helen Clark, but the venerable paper now has discovered its readership love our old PM anyway (and it ain’t afraid to say so). How sweet, bless.

Helen Clark does deserve it. She alone represents that which brought NZ out of twentieth century thinking and prepared our at-times fragile economy for the great bumpy-bump-bath ahead. Her self belief masked a sensitive and warm soul who managed to build an extremely durable political self that inspired many. We let her save ourselves from ourselves.

NZ Herald article

The last great empire builders – the UK and the USA appear to be on the brink disaster due to the collapse of debt financing.

Due to the mountain of debt compared to productivity mainly in the private sector, the banking crisis looks like it inevitably will move to the next stage despite the extraordinary generousity by Governments of tax payer reserves into the banking sector.

It seems that our addiction to capital is an addiction to “productivity free” capital – in other words the acceleration of capital growth over the past thirty years has been a belief system based on attributed value rather than real value. Notice how your house got more and more valueable?

Look at it like this: there is a supply of houses and a demand that together regulate prices in a competitive market. That determined a real price. But there is also a market for money and its value is relative to other things. There is no such thing as a “fixed value”. Everything drifts against everything. That means that the system, to grow, has to mimic an organic system and fool itself into expansion. An economic system that allows debt in excess of money supply causes booms and busts. When debt however exceeds productivity, the value of money is eroded.

What we are now faced with is not so much a debt crisis, but a crisis of value. Instead of enabling bully boy boardroom banter taking punts on failure, investment in real productivity is utterly essential to the availability of jobs. Or is it?

Cash is merely the current in the river. What Governments have been doing – putting more currency into the market place because banks are not lending (due to secondary market problems) – is not fixing things.

Why not? First you have to ask, why would it? It is just flooding the river. The people are not able to draw more water from it as they are too busy painting their huts.

The simple thing to do is reduce social reliance on the banking system.

Imagine this. If there were no mortgages, the mortgage crisis would be over.

Of course, there are many mortgages and too many of those are about to go sour. What possible solutions and what are the results of those?

a) Revert all first home mortgages to long-term very-low-interest contracts; there is continuance and stability in the housing market. Make personal short term debt more expensive. Create a fund to finance business enterprise and employment.

b) Buy the failing contracts and rent to the mortgagees; the Government has a long term commitment to housing

c) Do b) but replace Government with Private Enterprise.

Only b) and c) have been discussed. But if the terms of mortgage were redefined so its a mutually beneficial contract and the banks forgo foreclosure except in cases where costs would escalate otherwise, it follows that a lot of market movement (change in value) would be exposed during the period when funds to support purchase are simply not going to be released by banks. If the market is to be dead, then make it a safe dead market.

Option a) removes from the public risk those mortgage deals that were signed probably in good faith. Extreme cases or criminal cases must be caught but the Government does not want banks to foreclose on a productive household due to the bank’s exposure to secondary mortgages.

The next phase of the problem appears to be that businesses is unable to expand as banks won’t release cash to them either.

Bailing the banks out becomes an excercise in preventing runs on those banks from exhausting them of available resources as much capital is tied into long term contracts. This does not return confidence. Being able to pay one’s rent and earn money does that. And if the businesses in the economy continue to lay off people in droves, the next phase of a real depression would start to exist. And that is a huge reduction in GDP. Then the debt spiral would become more and more ominous.

One solution may be to simply sequester the poison from the economy and that is the conclusion the USA appears to lean toward.

The UK solution appears to be to nationalise the banks.

The NZ solution appears to be to think we are not part of the problem. NZ is a small but active economy, active in trade and very active in property. Property ownership in Auckland extends to boat ownership. This means there is an awful lot of personal investment in luxury and therefore something that will deflate quite nicely. Bricks and morter are great but the NZ problem is skilled people keep leaving (I may too).

But our new prime minister – John Key – is going down the concilliatory route. At least with Helen Clark there was a sense of emergency. His first act of office was of course to go on holiday. The second was to break his arm. So our new ex-Merril Lynch PM really has his mind on his job. But I am prepared to give him a chance. He is calling for conferences on this and that. Next one expects a risk projection or that he has leased the meat industry to Japan.

Oh the horror.

DisturbingTrends has focused on the USA for the last eight years. Now it seems in good hands. Will Obama get the economy back to basics? Is he that good at mathematics? Or is John Key a great one handed chess player?

The rise of Barack Obama to the US presidency marks an historic change in the temperature of the world, it’s politics and the way The United States of America exists in the world. Not as a bully or victim but as a cohesive society that strides into the future with hope and a confidence for real change.

Welcome, Mr President Obama.

It is the quality and timing of the choices that this man makes that will determine what happens for billions of people. So far, so good. There are bound to be problems along the way, but at least some respect will return to The White House.

What happens is not, we must remember, due to the actions of a man but the nation that is listening to what he says. It seems that people will listen to what Obama says. It seems that he will take responsible actions and not necessarily what everyone else thinks he “should” or “must” do.

One of the first things you can see now is the new http://whitehouse.gov – their blog – Change has come to The White House explains things quite nicely. Previously, visiting US government websites felt like you endorsed something awful, probably risky. Now it seems like a very interesting website.

Barack Obama has just 4 years to reverse global warming or face dire consequences a leading Nasa scientist and climate expert Jim Hansen warns.

The time to act is now, of course it is. The longer we avoid the issue and wait for it to get more severe – the odds are expotentially stacking against an ability to revert very long term trends we are now causing.

The huge innovation required to generate electricity and employ it for transport – and to do this without harming our home, Earth – that is the challenge.

World ‘needs radical cuts’ on CO2 – BBC

Disturbing trends predicted that Bush would need more bail out funds and it looks like we sort of got it right. Though he has left the White House, he is still technically President – and the Bank of America and Citibank are moping up the bail out cash like blotting paper. It is not the end yet. But it may be the end of the beginning of this crisis, although I have seen that prediction before.

Sorry, we were right. Them pesky derivatives.

Independent.co.uk

A question in The Guardian (UK) was – will we miss GW Bush?  My answer…

“Bush did his best against odds that his imagination had no room to consider. His stern resolve resulted in near total collapse of the world economy, the peace forged from WW1 has been damaged and America is seen in a completely different light. Miss him? In a “grizzly beat took my eye out but I still feel for the old beast” sort of way.

See: The Guardian

The memories of the last eight years are not complete without an understanding that a person was controlling things in the White House that did not understand economics but treated the entire game as a machine he could manipulate.  I agree with the sentiment of another opinion piece – why have a rich person in control – they generally got there due to the actions of others.  Why not a genius?  Perhaps GW Bush has simply enabled democracy to take the next fabled leap – without GW Bush millions of Americans would still be moderately well off.  His economic policies seemed aimed at subjecting everyone to substantial economic risk.

That article, from April 2008 shows the start of the end for 1.5 million American taxpayers who queue for backruptcy protection then.  Made it easier for families to bankrupt themselves.  Interesting form of herd management.

From the blogs:

“Bush has not bequeathed us a shining city on a hill in Afghanistan, but a crippled state in need of billions of dollars of investments that we no longer have because of Bush’s kleptomaniac buddies, whom he enabled.”

Juan Cole