Next Great Depression? MIT Researchers Predict ‘Global Economic Collapse’ by 2030

By Eric Pfeiffer

A new study from researchers at Jay W. Forrester’s institute at MIT says that the world could suffer from “global economic collapse” and “precipitous population decline” if people continue to consume the world’s resources at the current pace.

Smithsonian Magazine writes that Australian physicist Graham Turner says “the world is on track for disaster” and that current evidence coincides with a famous, and in some quarters, infamous, academic report from 1972 entitled, “The Limits to Growth.“

Produced for a group called The Club of Rome, the study’s researchers created a computing model to forecast different scenarios based on the current models of population growth and global resource consumption. The study also took into account different levels of agricultural productivity, birth control and environmental protection efforts. Twelve million copies of the report were produced and distributed in 37 different languages.

Most of the computer scenarios found population and economic growth continuing at a steady rate until about 2030. But without “drastic measures for environmental protection,” the scenarios predict the likelihood of a population and economic crash.

However, the study said “unlimited economic growth” is still possible if world governments enact policies and invest in green technologies that help limit the expansion of our ecological footprint.

The Smithsonian notes that several experts strongly objected to “The Limit of Growth’s” findings, including the late Yale economist Henry Wallich, who for 12 years served as a governor of the Federal Research Board and was its chief international economics expert. At the time, Wallich said attempting to regulate economic growth would be equal to “consigning billions to permanent poverty.”

Turner says that perhaps the most startling find from the study is that the results of the computer scenarios were nearly identical to those predicted in similar computer scenarios used as the basis for “The Limits to Growth.”

“There is a very clear warning bell being rung here,” Turner said. “We are not on a sustainable trajectory.”

Read the rest here.

By Susan Antilla

Mark L. Morze knows a good investment opportunity when he sees one, but he hasn’t pursued his fortunes quite the way the rest of us have. Morze, 61, hung his hat for 4 1/2 years at federal prisons in Lompoc and Boron, California, after pleading guilty to two counts of fraud for cooking the books at the infamous carpet-cleaning company ZZZZ Best (ZBSTQ) in the 1980s.

He says he’s baffled that President Barack Obama plans to sign a law tomorrow that amounts to an open invitation for fraud. “I wish legislators would consult with people like me before they write something like this,” he says, sounding dead serious about the offer. “I could tell them, ‘I know what your intent was with this wording, but we can get around it so easily, it cracks me up.”’

I’m sure the last thing U.S. lawmakers were looking for in their zealous bipartisan push for the Jumpstart Our Business Startups (JOBS) Act was the inconvenient feedback of a seasoned investment fraudster — albeit one who says he’s rehabilitated and now lectures on the techniques scammers use. Though the JOBS Act was packaged as a plan to streamline rules to help small companies crank out jobs, even its cheerleaders have come up with scant evidence the law will boost employment much, if at all. In an election year when pragmatic politicians are laboring to come off as allies of deep-pocketed business donors, the JOBS Act is a slapdash attempt at securities-law deregulation, plain and simple.

Read the rest here.

The evidence suggests that corporations might encourage people to think and act more anti-socially. What does owning stock do to our brains?

For decades in art circles it was either a rumour or a joke, but now it is confirmed as a fact. The Central Intelligence Agency used American modern art – including the works of such artists as Jackson Pollock, Robert Motherwell, Willem de Kooning and Mark Rothko – as a weapon in the Cold War. In the manner of a Renaissance prince – except that it acted secretly – the CIA fostered and promoted American Abstract Expressionist painting around the world for more than 20 years.

The connection is improbable. This was a period, in the 1950s and 1960s, when the great majority of Americans disliked or even despised modern art – President Truman summed up the popular view when he said: “If that’s art, then I’m a Hottentot.” As for the artists themselves, many were ex- com- munists barely acceptable in the America of the McCarthyite era, and certainly not the sort of people normally likely to receive US government backing.

Why did the CIA support them? Because in the propaganda war with the Soviet Union, this new artistic movement could be held up as proof of the creativity, the intellectual freedom, and the cultural power of the US. Russian art, strapped into the communist ideological straitjacket, could not compete.

Read the rest here.

By Michael S. Derby

The Federal Reserve should continue to provide stimulus aggressively to the economy, a U.S. central bank official said Tuesday.

But in light of the recent improvement in the economy, the policy maker, John Williams of the Federal Reserve Bank of San Francisco, didn’t discuss the possibility the central bank will have to consider delivering even more stimulus, as he has in past remarks.

“It’s essential that we keep strong monetary stimulus in place,” Williams said in the text of a speech that was to be delivered before a gathering held at the University of San Diego School of Business Administration. “High unemployment, restrained demand and idle production capacity are national in scope. These are just the sorts of problems monetary policy can address.”

But unlike in past speeches, Williams, a voting member of the monetary-policy-setting Federal Open Market Committee, didn’t discuss the potential need for the Fed to go beyond what is already planned.

Read the rest here.

With the U.S. economy yielding firmer data, some researchers are beginning to argue that recoveries from financial crises might not be as different from the aftermath of conventional recessions as our analysis suggests. Their case is unconvincing.

The point that all recoveries are the same — whether preceded by a financial crisis or not — is argued in a recent Federal Reserve working paper by Greg Howard, Robert Martin and Beth Anne Wilson. It was also discussed in a recent article in the Wall Street Journal.

It is mystifying that they can make this claim almost five years after the subprime mortgage crisis erupted in the summer of 2007 and against a backdrop of an 8.3 percent unemployment rate (compared with 4.4 percent at the outset of the financial crisis). Our research makes the point that the aftermaths of severe financial crises are characterized by long, deep recessions in which crucial indicators such as unemployment and housing prices take far longer to hit bottom than they would after a normal recession. And the bottom is much deeper. Studies by the International Monetary Fund concluded much the same.

Read the rest here.

(CBS News) In the escalating battle between the administration and the judiciary, a federal appeals court apparently is calling the president’s bluff — ordering the Justice Department to answer by Thursday whether the Obama Administration believes that the courts have the right to strike down a federal law, according to a lawyer who was in the courtroom.

The order, by a three-judge panel of the U.S. Court of Appeals for the 5th Circuit, appears to be in direct response to the president’s comments yesterday about the Supreme Court’s review of the health care law. Mr. Obama all but threw down the gauntlet with the justices, saying he was “confident” the Court would not “take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress.”

Overturning a law of course would not be unprecedented — since the Supreme Court since 1803 has asserted the power to strike down laws it interprets as unconstitutional. The three-judge appellate court appears to be asking the administration to admit that basic premise — despite the president’s remarks that implied the contrary. The panel ordered the Justice Department to submit a three-page, single-spaced letter by noon Thursday addressing whether the Executive Branch believes courts have such power, the lawyer said.

Read the rest here.

Daniel Halper

Dean Singleton, chairman of the Associated Press board, introduced President Obama this afternoon at a speech to news editors in Washington. But Singleton didn’t just tell the audience the president was the next speaker—the supposed newsman offered lavish praise for the Democratic president.

“President Obama made history as the first minority to be elected president,” said Singleton. “Even many who opposed his election felt proud of our country as he took the oath of office.”

Singleton went on to detail the challenges Obama faced, much in the same way Obama himself details his own presidency (the transcript is rushed, there may be small errors):

As president, he inherited the headwinds of the worst economic recession since the great depression. He pushed through congress the biggest economic recovery plan history and what a government reorganization of two of the big three American automakers to save them from oblivion. He pursued domestic and foreign policy agendas that are controversial to many, highlighted by his signature into law of the most comprehensive health care legislation in history. The budget plan’s proposed by the president on the one hand and republicans on the other hand are not even on the same planet. Many democrats believe his agenda doesn’t go far enough and many republicans believe it goes way too far. While we fought be to doubt — while we thought the 2008 white house race was rough and tumble, the 2012 race makes it look like bumper cars by comparison our country has become even more polarized. The 1 percent and the 99 percent are at each other’s throats.  Campaigns are now funded by secretive, multimillion-dollar super PACs. The only thing anybody seems willing to compromise on is — I can’t think of anything. [laughter] really, who would want this job in the first place?”

“We are honored today to have the man currently holding the office and aspiring for another term,” said Singleton before finally announcing the president himself.

Indeed, it sounded like a campaign speech from AP chief himself.

SOURCE

“This bears on your reporting,” President Obama said to journalists. “I think that there is oftentimes the impulse to suggest that if the two parties are disagreeing then they’re equally at fault and the truth lies somewhere in the middle. And an equivalence is presented which I think reinforces peoples’ cynicism about Washington in general. This is not one of those situations where there’s an equivalency.”

“As all of you are doing your reporting, I think it’s important to remember that the positions that I am taking now on the budget and a host of other issues. if we had been having this discussion 20 years ago or even 15 years ago … would’ve been considered squarely centrist positions,” Obama said a few moments later.

SOURCE

By Kathleen Madigan

The Dow Jones Economic Sentiment Indicator rose for the third month in a row, as job gains are providing momentum to the U.S. economy.

The ESI advanced to 48.1 in March, from 47.4 in February. The ESI is now at its highest reading since December 2007, although the rate of progress last month was slower than in previous months.

“The indicator suggests that employment growth remained robust during the month and that the recovery is in hand, although not yet with the ebullience of past rebounds out of recession,” said Dow Jones Newswires “Money Talks” columnist Alen Mattich.

Positive coverage continues to be driven by better news on the labor markets. Better job growth will provide the money and confidence consumers need to keep lifting their spending, a key driver of U.S. economic activity. Coverage of the Federal Reserve was also positive for the outlook.

Negative news was dominated by the sting of higher gasoline prices. Worries about the health of the U.S. banking system were also a negative for future growth.

The economic sentiment indicator is designed to project the health of the U.S. economy by analyzing coverage of 15 major American newspapers, using a proprietary algorithm to look for positive and negative sentiment about the economy in every article.

The ESI is reported on a scale of 0 to 100; higher numbers represent increasingly positive sentiment. Dow Jones selected the 15 newspapers used to compile the indicator because they include extensive original reporting on economic issues. They are also geographically diverse and represent eight of the 10 largest metropolitan areas in the U.S.

Read the rest here.

The main graph above shows the price of silver over the last forty years or so, defined by its two explosive moves.  Now the metal is consolidating and triangle watchers are on alert.  The smaller graph shows the action of late, with the triangle lines drawn in as from a page of “global trend lines” in a technical strategies piece from Bloomberg that I saw.

Bespoke:

The only thing worse for drivers than rising crude oil prices here in the US is the rising spread between Brent and WTI crude oil.  Since bottoming out late last year, the spread between the two benchmark prices of crude oil has risen by more than 140% and is now back above $20 per barrel.

Read the rest here.

A graphic appearing on jihadi forums Monday caught the NYPD’s attention—not just for its announcement of a potential terrorist threat but for its unusually sleek graphic design. The graphic features a stylized image of New York City with the headline “Al Qaeda: Coming Soon Again to New York.” An NYPD spokesman said the website where it appeared is heavily used by Islamic militants, and that the city police and the FBI were investigating.

SOURCE

The best first-quarter gain for the Standard & Poor’s 500 Index since 1998 sent U.S. stocks above gold by the most in more than a decade, a sign of growing investor confidence in corporate profits as analysts raise earnings estimates for the first time this year.

The OECD data show that the U.S. is making no progress on one of the most important tools for social mobility, college. If access to higher education in this country actually declines, as it is threatening to do, our inequality problem will become infinitely harder to solve.

Ivan Hoff: “Markets could be as complicated as you want them to be. There are some ways to make sense out of the insanity:”

Read the rest here.

Jez Liberty has published his monthly trend following index.

Krugman: “the simple analytics say that we should soak the rich, hard.”