Nature’s working is strange

Just came across this story in Scientific American about rumblings at the Yellowstone national park .. the site of a giant caldera or supervolcano !

Multiple tiny earthquakes rattle Yellowstone

Any disaster fiend will tell you that Yellowstone National Park is long overdue for a monster eruption that could leave as much as half the U.S. under a blanket of ash. And there are rumblings the big one could be imminent in the wake of a series of 30-plus mini-earthquakes in the park over the past few days—too weak to be felt by humans for the most part but picked up by the seismometers at the University of Utah.

After all, the geologic record shows that the giant caldera we affectionately call Yellowstone has blown every 600,000 years or so over the past 2 million years. The last big eruption? About 640,000 years ago when the park spit out about 240 cubic miles worth of rock, dirt, magma and other stuff.

But don’t panic yet. Although the earthquake swarm continues, according to the Yellowstone Volcano Observatory, the volcano alert level remains normal.

…………

Very interesting story indeed ! One may follow any significant developments from the University of Utah press releases on these events. Must be a tough balancing act for these folks to present their analysis, yet not panic the janata. For the data nuts, continuous raw seismographic data is available here. As i type this, there are few more rumbles of scale 3.0 or more, on Jan 2nd, all of them about 60km ESE of West Yellowstone, MT.

MAP 3.1  2009/01/02 13:15:39 44.528N 110.366W  3.4
MAP 3.2  2009/01/02 12:40:53 44.549N 110.370W  0.2
MAP 3.5  2009/01/02 11:32:49 44.549N 110.357W  5.4

If this thing erupts in full scale, we can kiss goodbye to current climate stability. Now that possibility kicked off the following thought process in me  : Nature itself is in a dis-equilibrium, and through sheer randomness or some mechanical adjustments at the Earth’s core (or a random space debris hitting us, or some change in Sun’s activity) can cause serious climate change without any warning. But we poor homo-sapiens debate passionately on the morality of causing climate change, and how best to balance “development” goals with climate stability etc. Ofcourse, its very much arguable whether most of civilization’s economy is truly “development” we need at all, but still my sympathies are with humanity for having to deal with the question of climate stability while nature itself doesn’t guarantee stability one iota !

It would truly be ironic if humans, in order to “save nature”, promote alternative energy, completely get off fossil energy by 2060, stabilize co2 at 400 ppm … and then .. Bang ! Yellowstone goes off, completely altering the climate ! How tragic would that be ! ( No, iam absolutely not advocating inaction on climate issue, because any random natural event could always blow off a worthy human endeavor, but that’s never an excuse for inaction).

Whoever said life is fair

From content to insight

O ye doers of Vipassana (insight) meditation out there, i’ve got good news for ya. A solid guide on intricacies of practice, is now available online. And like all good things in life, its free ! Here it is: “Mastering the core teachings of the Buddha. An unusually hardcore Dharma book“.

I hope y’all benefit from the tremendous amount of practical advice contained within. As a beginner, i found parts one and two to be very useful, but part three titled “mastery” shifted gears and went way over my head. You might likewise find some material appropriate for your level of practice, and some not. Just a headsup.

The tulip month

phew .. october just flew by without a post ! What on earth was i doing ? Just two things broadly — (a) really trying to be regular about my meditation. (b) following the ongoing financial tsunami. No school can better the real time education from current events, i say. Since we live in the age of ‘homo economicus’, our handling of economy, more than anything else probably, says a lot about our priorities and state-of-the-species.

So, without further ado, let me present my thesis on state of affairs. Wait .. thats still cooking.  In the meantime, let me serve up a random email moment, and save it from being forever lost to public eye among terrabytes of archived data at google warehouses. ( not that it specially deserves the honor or anything )

Yesterday, a cousin sent me an email, about a story on how the current global bumpy-ride is affecting real estate markets (and some unfortunate players) in India ..

The story (unknown original source)

The real estate industry that was the major stepping stone for the city of Hyderabad to come into the world focus has now become a barren tale of losses, suicides, dashed hopes and what not. Given the fact that the growth rate depended mainly on the NRI funds, the economic recession in the US has shown its power and thousands of people who have literally changed their lifestyle in the real estate dream have now landed in a major mess.

A large chunk of the downfall can also be attributed to the success of K Chandrasekhar Rao and his TRS party that gave the big companies to come up with a new concept of Andhra and Telangana and start selling lands. Crores of rupees have been spent in buying the lands and today not one unit linked to the real estate stream is in a position to breathe properly.

The farmers who got used to lavish lifestyle after tasting money ended up with big loans from banks for cars and houses and now they are unable to pay up. Many youngsters who took to this field with the idea of quick money have now lost their livelihood and are on the verge of suicides and absconding. Many companies who have spent crores of rupees buying acres of land are now hunting flies unable to send a single plot. They have now compromised that a break even price is more than sufficient profit.

Hot spots like Kokapet, Narsingi, Puppalaguda, Madhapur, Shamshabad and many other places were given undue hype during the boom and crores of transactions took place by selling the ‘real’ dreams. This was the scene about an year ago and today, things have turned for the worse with not a single penny being spent and those lands that were priced at crores per acre are not finding a buyer even at the rate of few paltry lakhs.

The recession began about a year back and just when experts were thinking that it will be alright in a year or two, the financial crisis in the US market and the current political confusions have added to the woes. On the smarter side, few big companies who anticipated such things have slowly shouldered few ventures on the lesser players and have taken their cushion.

This has shown an adverse affect on the financial institutions here unable to deal with the increasing loan defaulters and their money stuck with many who jumped into the real estate stream. Even the registrations department has shown an alarming dip in the number of registrations given the present condition and there seems to be no ray of hope at least for sometime.

At this rate, it will be a long while before things will come back to normalcy and it remains to be seen how many lives get plundered in this resurrection.

My quick-and-dirty big picture response

I wouldn’t blame the politicians fully. where is people’s discretion ? People who have leveraged beyond their means to pay back, will have to suffer the consequences of their actions. People who are prudent and bought only stuff they can afford to pay even in rough times, will survive. Yes, politicians whipped up the sentiment, but there can’t be a clap without two hands. Ofcourse, there are always people who genuinely bought their first homes at high rates, because they feared they’d otherwise never be able to afford in the future. Lot of innocent people got caught up in the frenzy. Unfortunately, those innocents are the collateral damage in any bust, be it dot com, or real estate or tulip bulbs or stocks.

I agree, overall india will not be immune to the current global downturn. Although, i think it will be less impacted in the short term because various factors like high savings rate, relatively less exposure to globalization, currently low commodity prices, demographics etc etc.

Long term (and iam talking 10 20 30 years), i believe all our economies have a problem when we start to hit physical constraints of the planet — energy, resources, climate etc. The current crisis is just man-made (financial). we can get over this, given enough time. But, we ought to be very careful about not going into physical constraint crisis, without adequate restructing of economies away from consumption oriented economies to simple low footprint sustainable economies.

But i don’t see any such measures currently. If you follow the discourse in the US, its all short term thinking. They are asking banks to lend, lend, lend, repeating the same mistake, trying to stimulate the economy articially again. Who will they lend to ? How will people pay back ? The consumer is tapped out. There should be more emphasis on getting people to save and repay national debt.

my 3 cents

Bubbles .. bubbles

So we hear from the pundits that the financial crisis is brought about by (a) lax lending standards sometimes artificially mandated by the government to improve home ownership (b) extremely low interest rates from the ‘liquidity drug dealer’ aka, the Fed, (colorful phrase from Marc Faber), to keep the economy on a ‘high’ perpetually (c) Banks issuing more and more risky loans to seek higher returns (d) Banks could package and ’securitize’ these loans and sell them to others seeking high returns, and so could get these toxic stuff off balance sheet and go back to offering more risky loans. (e) various institutions buying up these wholesale packaged loans on excessive leverage, to hold them just enough time to get a good return, but hoping to offload them to a greater fool just in time (f) man-on-the-street sees higher and higher home prices, feels he’s left out, joins the party and everyone is looking to sell their assets to a greater fool .. until some bagholder can’t find a greater fool and whole pack of cards starts coming down.

Iam sure I’ve simplified and not included quite a few other reasons like the role of derivatives (which i don’t fully understand), and I’ll leave the full analysis to the books which surely will be arriving soon to a bookstore near you. But that list is enough for me understand what went on. In simple terms — greed, short term thinking, and negligence on part of millions of people. Perfect cocktail for bubble creation.

But what concerns me more are the much larger bubbles that are created by the same mentality of greed, short term thinking and negligence. I believe our entire global economy itself is a bubble from a historical perspective. Just as the asset bubbles are created by cheap money liquidity drug, our current economy is ‘high’ on fossil energy Redbull accumulated over millions of years, one-time bounty of earth’s natural resources and stability of our ecological system. But beware of the times when we cannot economically extract the drug anymore (see Simmons), or when Ma nature can no longer put up with our reckless partying (see Hansen).

We better get our house in order into a low-footprint economy, before that bubble bursts. Because if we don’t, there’s nobody to bail us out. No Fed can issue more barrels of oil like it prints paper and no amount of tax payer money can bailout the climate system.

There’s one take away for me from the financial crisis — don’t trust those ivy leage experts who promise everything is hunky-dory until the chips start falling. And I don’t trust the so-called experts who say our economy and way of life is sustainable long term.

Financial potpourri

On Wednesday, September 10th, during a conversation with a relative visiting from the US, I said, “I feel like we are sitting on the edge of a financial precipice .. something will happen to the markets soon”. Pretty good intuition, huh ?! That very Sunday, came the news of Lehman collapse and kicked off an eventful week. This financial crisis is not something that came overnight. Some analysts (like Nouriel Roubini and Mish, who I’ve been following for more than a year ) have been crying out from their website-tops that this was coming. Its amazing that markets have caught up with reality so late. One would have thought markets would have priced-in all this information well-in-advance of everyone. But no. Only shows that with bit of judgment, its possible to see where things are headed well before the markets do. So much for ‘efficient markets’.

So the whole of my last week is consumed in following the events as they unfold, and Iam in no mood to give my serious two cents on the whole thing. Instead, some sunday humor, anyone ? How about a Letterman’esque Top-10 ? . In the spirit of upholding free markets, and the principle of ‘comparative advantage’, I’ve out-sourced and open-sourced this compilation. As I waded through the financial blogs and discussions, I’ve captured some nuggets from people who still kept their sense of humor alive through the whole thing. Hat-tip to those anonymouses.

Without further ado, lets start the top-10 wisdom-of-the-crowds take on the financial crisis !!

Here we go …………..

BONUS ) Dubya Bush: “The SEC is also requiring certain investors to disclose their short selling, and has launched rigorous enforcement actions to detect fraud and manipulation in the market. Anyone engaging in illegal financial transactions will be caught and persecuted “.

GGhhrmm.. (clearing throat) .. Mr.President, i think “prosecuted” might be the word that the writers have actually written for you to read.

Number teennnn) On the ban on short-selling financial stocks, somebody in the street cried out …

“Isn’t this sort of like canceling gravity because the helicopter is out of fuel?”

Number niiiineee) On putting Lehman on the chopping block but bailing out AIG. Any lesson to be learnt ? Yes. Be “too big to fail” .

Today’s lesson from the Fed and AIG:
Never steal small sums.

Number Eiiiiiigghhht) Somebody astutely observed that Bank of America CEO Ken Lewis might actually be literally hiding behind this “too big to fail” theme.

Ken Lewis is thinking ahead. If it wasn’t before, BofA, with Countrywide and Merrill under its belt,
has got to be too big to fail now. Brilliant stroke, Ken.

while on the topic, someone suggested that ..”merged result of Merril Lynch and Bank of
America should be called Lynch America“

Number Seeeveeennn) well, climate change has to be tucked in somewhere, isn’t it ?

The good news is that the sitting guvmint does not believe the world’s ice sheets are too big to fail because their failure will be conveniently deferred to 30-50 years from present. Happy  motoring.

Number Siiiixxxxx) A pragmatic taxpayer ponders what’s in it for him from the AIG bailout..

So let’s say I’m down in the financial district and I gotta take a piss. As a part owner of AIG, can I walk over to HQ and use the facilities? Do I at least get that much out of the deal?

Number Fiiiiiiiivvvveeee) Lets give the mother-of-all-bailouts plan a decent acronym, shall we ?

The Securitized Home Investment Trust (S.H.I.T) shall cure all ills… All in favor say aye…

Number Foooouuuurrrr) Surgeon general advise: Positive frame of mind is good for your health.

Let’s Look on the Bright Side
After the Fed bails out GM and winds up owning 80% of GM, you can go to the Fed, buy a car and
insurance from them all at the same time!
Federal Gov’t – the one stop shopping for mortgage, insurance, autos…

Number Thrrreeeeee) There was a rumor floating around that terrorists might actually be shorting stocks from their bases in London and Dubai, to bring down the US financial empire.

Aren’t the firms going under, the real financial terrorists .. strap themselves with toxic debt and threaten to blow-up the whole economy up if the govt din’t pay ransom bailout …

Number Twwwoooo) A mastercard moment …

a bottle of cheap wine: $10
a plasma television set: $2,000

watching the global financial tsumani: priceless

for everything else… the US Federal Bank

Ladiiieesss, and Gentleeemannnn , now the top wisdom-of-the-crowds take on the financial kablooi …

Number ONNNNEEEEEE) should i pay in dollars, euros, yen or …..

Newspaper clip: “Lawyer suspended for accepting nude dances”

Now there is a man ahead of the curve, why take worthless dollars when you can get something of real value.

… la la la la lala …. ta ta tara ta ta …. na na na na nana ….. ho ho ho…..

Gandhiana

Sunday evening is shutters down at the Gym. So, random browsing at the library seemed like a good timepass idea. I took a “shared auto” to reach closer to the destination. “shared autos” run between important bus stop’s in the city, picking up passengers waiting for the bus. Its almost cost competitive with the bus, maybe one or two rupees extra, for which you get an immediate ride (need not wait for the bus) and a guaranteed seat (may have to stand in the bus). I like these shared economy solutions ! For a lot of people though, going in a bus or a shared auto seems to be a “prestige” issue. But i have no such reservations, and i try to spare ourselves of more fumes and traffic, as much as possible. On the walk to the library, i stopped over at the Shravan cafe, to enjoy a cup of filter coffee.

“Gandhiana” is a section of our local library devoted to Gandhian studies. I picked up at random, “Economics of the spinning wheel: Development without destruction” by Nandini Joshi (impressive background). After reading the first few pages, i realized that Charkha (the spinning wheel) is not a just about an instrument of production, but has an a lot of philosophy behind it, touching the topics of village economics, self-reliance, local markets, local production etc. In Nandini Joshi’s own words:

“The charkha is an economic concept, being an instrument of production; nonetheless it is the only instrument of production — except for its counterpart, the spinning machine — which has profound political, social, psychological, cultural, environmental and, above all, ethical implications. Gandhi conceived it in its entirety and therefore far more intensively, which had a vital bearing on the various aspects of an individual’s as well as a society’s growth.”

Photo by Margaret Bourke-White for Life Magazine, 1946.

Now, that’s interesting ! Iam curious to find out how Charkha could symbolize so many aspects. It seems to me, Charkha could be an emblem for distributed, localized, “small is beautiful” type of economy. I have checked out the book to take home, and will keep you all posted if i learn anything interesting.

While at Gandhiana, i remembered out of the blue that i read a book long time back, which had a passage on implications of Gandhi’s philosophy for environment. I searched out the book “Gandhi — A sublime failure” by S.S.Gill, and looked for relevant passages, and jotted them down on a paper. By the way, iam neither a Gandhian nor a non-Gandhian. I haven’t read enough about his philosophy nor thought through the full implications of his philosophy. But the passages below are about Gandhi’s views on ecology, and i have no problem relating to these views. I think he saw through the problems of hyper-industrialization decades ago. Here are the relevant passages from the book:

Gandhi was the first great ecologist of the twentieth century. His instinctive preference for an austere way of life and limitation of wants had an important ecological dimension. Then there was his innate reverence for life in all its manifestations. His strict adherence to vegetarianism owed, its origin to this view. Explaining his rationale for ‘cow worship’ he wrote, “Man through the cow is enjoined to realize his identity with all that lives .. [it meant] protection of the whole dumb creation of God”.

Here again it was a question of clash of civilizations. (..) The western man treated the earth as his personal estate, and plundered and ravaged it for his pleasure. How far ahead of his times Gandhi was may be seen from the fact that it was only in 1962 that the publication of Rachel Carson’s ’silent spring’ and the club of Rome’s ‘The limits to growth’ ten years later, shocked the western world about the horrendous consequences of poisoning the earth’s environment and depleting its non-renewable resources in its blind pursuit of affluence. (..)

When people criticized Gandhi for his ‘villagism’, he said, “It is not an attempt to return to the ignorant dark ages but it is an attempt to see beauty in voluntary simplicity, poverty and slowness”. In 1927 he told Saklatwala, the communist MP from Britain, that he “detested the multiplication of wants and machinery, the mad desire to destroy distance and time, to increase animal appetites, and go to the end of the Earth for their satisfaction”. For him, the sole object of production was to satisfy needs and not wants. In a remarkably perceptive statement he said “The Earth provides enough to satisfy every man’s need, but not every mans greed“. This should serve as a motto for all ecologists. It is well known that he just would not allow any waste. He scribbled notes on the vacant space of used post cards, incoming letters, undistributed leaflets, and any other scrap of paper. He used his pencils down to the stumps. Whereas every country is racing madly to raise the living standards of its people through sustained economic growth, Gandhi said in 1928,

“God forbid that India should ever take to industrialism after the manner of the west. The economic imperialism of a single tiny island kingdom is today keeping the world in chains. If the entire nation of three hundred million people took to similar economic exploitation it would strip the world bare like locust”.

This is a striking insight, and it shows how well Gandhi understood the dynamics of modern industrial civilization and its prognosis.