[emersonbiggins]

I'm currently having an ongoing debate between myself and an economist in our office about the role of government in transportation. I believe that if we are to subsidize the auto in the role we have thus far, we should subsidize mass transit accordingly, or perhaps in lieu of the automobile altogether. He believes that because all of the aggregate economic development that suburbia has brought thus far, the government was well justified in providing free roads and interstates, nevermind what negative effect that this has had on the nation. This is a position that no doubt many free-market types espouse, perhaps without considering the doublespeak of what they're saying. Without a cogent argument other than 'the market has voted for sprawl and autos with their pocketbooks,' he resorted to assuming that my love for trains (e.g., Europe) was based on pure nostalgia and simply won't work in the US because trains go where the 'criminals live', e.g. they're inherently 'not safe'. A rebuttal about thieves driving vans to suburbia to load up on stolen goods fell on deaf ears. Worst of all, I was accused of assuming that what I believe is what everyone else believes, as if the status quo reinforces the position of government in aiding and abetting sprawl. I live in a duplex and drive a car to work, but my acceptance of it is absolutely not a validation of it.

Arrrgghhh!! It's about time for some fisticuffs...

[jaws]

Economists are people too. They're vulnerable to the same hypocrisy that afflicts everybody else. Yes free markets are good, unless their job is on the line, or their car, or any of their privileges.

[AmericanEmpire]

$this->bbcode_second_pass_quote('', 'H')e believes that because all of the aggregate economic development that suburbia has brought thus far

[JohnDenver]

$this->bbcode_second_pass_quote('emersonbiggins', 'W')orst of all, I was accused of assuming that what I believe is what everyone else believes, as if the status quo reinforces the position of government in aiding and abetting sprawl. I live in a duplex and drive a car to work, but my acceptance of it is absolutely not a validation of it.

[emersonbiggins]

$this->bbcode_second_pass_quote('JohnDenver', '')$this->bbcode_second_pass_quote('emersonbiggins', 'W')orst of all, I was accused of assuming that what I believe is what everyone else believes, as if the status quo reinforces the position of government in aiding and abetting sprawl. I live in a duplex and drive a car to work, but my acceptance of it is absolutely not a validation of it.

[Wildwell]

As I’ve said before the whole notion of free market competition in transportation is utter nonsense, it’s never happened anywhere in the world. For true competition everything would have to be private and include external costs – that’s never happened in history.

This awful truth is the politicians in the 1950s/60s were very enthusiastic about highways and thought they would be popular which voters and business alike. Since then they have become politically dangerous, difficult to manage congested nightmares. In many countries people are now used to the liberty that cars bring, it’s just a shame that every else’s liberty in now impinging on theirs. This includes road building schemes, where the perception is its bearded porridge eating hippies that object to them, when it’s actually ordinary people than live nearby. Moreover, talk of widespread charging for a limited resource (road space) is even more dangerous. People do not like what was free yesterday being costly today, even though generally all other resources are rationed by price. This tends to come from the idea that roads are public property and people have a right to use them – a concept promoted by government itself when it became involved with provision many years ago. In short they have created a terrible monster and even the Chinese are making the same mistake. Just yesterday I was reading that Beijing is now the most polluted part of the earth because of the growth of cars.

People’s wish to ‘travel’ grows without end. In the second city of the UK, Birmingham growth is intense.

The annual Department for Transport Regional Transport Statistics report also shows that the average of 22,500 vehicles per day on the conurbation's A roads is second only to London.

Traffic levels on motorways in the region reached an average of 96,500 vehicles per day last year - more than in the London and Greater Manchester regions.

The amount of traffic on minor urban roads in the region reached an average of 3,600 vehicles per day - 50 per cent above the national average.

But rail growth is even more intense:

West Midlands rail passenger growth between 1994 and 2004 was 49 per cent, greater than London's 28 per cent and the national average of 37 per cent. 1350 trains pass through Birmingham New street station every day.

source1

source 2

[Graeme]

When yield curve talks, economists listen

$this->bbcode_second_pass_quote('', 'S')hort-term interest rates are at the cusp of surpassing their long-term counterparts in the United States, and many analysts are already squirming in their chairs as they worry about an economic slowdown.

In the past, what is known in financial markets as a yield curve inversion -- because longer-term investments start to yield smaller returns than near-term ones -- has often presaged a weaker economy, and sometimes even recession.

[FoxV]

so because this is based on investor perceptions does this mean investors are sifting through the spin and hype and actually see the writting on the wall.

If you were to look at the mainstream spewings, everything is suppose to be great, and I haven't seen any calls for people to start hedging their bets

[abbcampbell]

$this->bbcode_second_pass_quote('FoxV', 's')o because this is based on investor perceptions does this mean investors are sifting through the spin and hype and actually see the writting on the wall.

[kmann]

The yield curve is really a pretty good indicator, it correctly predicted 4 of the last 3 recessions.

[Revi]

Recession is right around the corner. Last night on McNeil Lehrer a guy from the national association of realtors was very honest about a deflating housing market. Along with that comes a deflating economy. We will have to see what transpires.

[90PercentAwake]

This Quote... "SAMA increased its foreign assets between December 2004 and October 2005 (latest data) by more than 53 percent or $46.6 billion.
Foreign assets have been growing over the past two years but not at the rate we are witnessing at present. From December 2003 to December 2004 foreign assets grew by $28 billion. Foreign assets now stand at 36 months of import cover. These assets provide substantial financial depth to protect the currency's peg to the US dollar and budgetary cushion against future downturns in oil revenues."

My question here; would United States debt be considered foriegn assets?

Very interseting article...
http://www.zawya.com/story.cfm/sidZAWYA20060119071502

[lakeweb]

$this->bbcode_second_pass_quote('90PercentAwake', 'T')his Quote... "SAMA increased its foreign assets between December 2004 and October 2005 (latest data) by more than 53 percent or $46.6 billion.
Foreign assets have been growing over the past two years but not at the rate we are witnessing at present. From December 2003 to December 2004 foreign assets grew by $28 billion. Foreign assets now stand at 36 months of import cover. These assets provide substantial financial depth to protect the currency's peg to the US dollar and budgetary cushion against future downturns in oil revenues."

Very interseting article...
http://www.zawya.com/story.cfm/sidZAWYA20060119071502

My question here; would United States debt be considered foriegn assets?

[Daryl]

Saudi's foreign assets are not only in USD. They hold other currencies also, EUR Swiss Franc Yen for example. but when reporting the aggregate the amount is expressed in a USD total for convenience. In fact, the majority of the foreign assets are likely in USD. especially since they receive payment for oil in USD. Nothing mysterious about this. Suprised by the small amount though - $56B total foreign reserves? Don't the Japanese hold a trillion USD? The Japanese don't have any oil exports. What's that got to do with petrodollar imperialism again? They don't need to hold so many dollars to pay for oil. Oh well. I'm sure Petrodollar can explain it. You'll have to ask him though He's tired of talking to me.

[MrBill]

Daryl, don't you mean Copernicus? By the way, I highly reccommend you check out this this guy's site for more informed discourse.

$this->bbcode_second_pass_quote('', 'F')or fiscal year 2004, Saudi Arabia originally had been expecting a budget deficit. However, this was based on an extremely conservative price assumption of $19 per barrel for Saudi oil -- and assumed production of 7.7 million bbl/d. Both of these estimates turned out to be far below actual levels. As a result, as of mid-December 2004, the Saudi Finance Ministry was expecting a huge budget surplus of $26.1 billion, on budget revenues of $104.8 billion (nearly double the country's original estimate) and expenditures of $78.6 billion (28 percent above the approved budget levels). This surplus is being used for several purposes, including: paying down the Kingdom's public debt (to $164 billion from $176 billion at the start of 2004); extra spending on education and development projects; increased security expenditures (possibly an additional $2.5 billion dollars in 2004; see below) due to threats from terrorists; and higher payments to Saudi citizens through subsidies (for housing, education, health care, etc.). For 2005, Saudi Arabia is assuming a balanced budget, with revenues and expenditures of $74.6 billion each.

In spite of the recent surge in its oil income, Saudi Arabia continues to face serious long-term economic challenges, including high rates of unemployment (around 13 percent of Saudi nationals, possibly higher), one of the world's fastest population growth rates, and the consequent need for increased government spending. All of these place pressures on Saudi oil revenues. The Kingdom also is facing serious security threats, including a number of terrorist attacks (on foreign workers, primarily) in 2003 and 2004. In response, the Saudis reportedly have ramped up spending in the security area (reportedly by 50 percent in 2004, from $5.5 billion in 2003). Saudi Arabia's per capita oil export revenues remain far below high levels reached during the 1970s and early 1980s. In 2004, Saudi Arabia earned around $4,564 per person, versus $22,589 in 1980. This 80 percent decline in real per capita oil export revenues since 1980 is in large part due to the fact that Saudi Arabia's young population has nearly tripled since 1980, while oil export revenues in real terms have fallen by over 40 percent (despite recent increases). Meanwhile, Saudi Arabia has faced nearly two decades of heavy budget and trade deficits, the expensive 1990/1991 war with Iraq, and total public debt of around $175 billion. On the other hand, Saudi Arabia does have extensive foreign assets -- around $110 billion -- which provide a substantial fiscal "cushion."

[Doly]

$this->bbcode_second_pass_quote('MrBill', 'I')f they buy euro or other foreign assets then they open up a foreign currency mismatch.

[MrBill]

$this->bbcode_second_pass_quote('Doly', '')$this->bbcode_second_pass_quote('MrBill', 'I')f they buy euro or other foreign assets then they open up a foreign currency mismatch.

[Daryl]

Yes, exchange risk is a key consideration when a country like Saudi is deciding how to diversify their foreing asset reserve portfolio. Nobody would ever want to be completely in USD for that reason. Country risk is another. US, Europe and Japan have generally safe, unregulated, liquid markets. After that, it starts to go downhill quickly. So, their options are limited in that regard.

The issue of liquidity becomes more important for very large holders of foreign reserves, like Japan and China. That's one of the reasons they are stuck holding so many dollars. They accumulate them naturally because their trade surplus versus the US. These kinds of volumes are difficult to move around. For China to shift say 200 or 300 Billion USD into Japan would roil up alot of markets, FX and investment markets.

There are alot of other issues as well. If Japan were repatriate all their USD into Yen (which of course would collapse the dlr/yen rate, ruining Japan's export competitiveness) they would be faced with managing disruptions to their money supply as well.

These large reserve imbalances are not good. There are many historical examples of these situations ending in tears for everybody. That's why you hear a regular drumbeat of warnings from central bankers about this. Nobody knows how to correct it though. We are basically sitting around hoping they go away on their own or that by some miracle, they don't matter any more because of globalization. Not a pretty situation.

[bobbyboy]

The Hay Festival on 30th May 2006 hosted this debate:
For the motion:
Caroline Lucas, Green Party MEP
Jeremy Leggett, CEO of SolarCentury

Against the motion:
Vijay Vaitheeswaran, Environment & Energy Correspondent, The Economist
Edmund King, Executive Director, RAC Foundation.
Hay Festival
MP3 Audio (12 mb, 1h 8m)
Cameo by Lutz Kleveman.

The first half they set out their political agenda. Second half is the Q & A (far more interesting). Leggett mentions peak oil briefly; the others essentially ignore it. They all are pro-hydrogen and biofuels.

My favourite quote (on how to get at the oil companies):
King: "if we change the technology, their oil will be redundant"
:lol::lol::lol:

[mekrob]

68 minutes...Gimme a while for comments