Obama has made a plea for bipartisan support for the passing of the current $800 billion package being debated before congress providing it includes 4 key points.
An overseeing independent board.
Taxpayers are to be treated like Investors-(This would be relatively simple by the issues of non voting warrants).
Additional measures to help those facing current foreclosures
Reward packages eliminated for those CEOs previously involved in the failed companies.
I notice Bill Clinton is currently doing the celebrity rounds and I listened to him the other night on the Letterman late show. He is more or less saying the same thing; to support the package and add those bells and whistles.
The question of those outrageous remuneration packages reminds me of the lectures we got from Management Recruiters who told us if we only pay peanuts we will get monkeys. It hasn't worked very well has it !! Still I have to admit those Wall Street guys were very clever to successfully export so much of their misery all over the world; sizable portions of AAA rated contagious toxic debt to so many eager buyers overseas.
But that reminds me of the fact many Americans don’t seem to fully appreciate it’s caused such severe indigestion overseas, to individual investors and provided the fuel for a possible severe world wide recession. This has meant both the Fed and its counterparts represented by central banks in Australia, Denmark, Norway and Sweden have had to set up additional currency exchange funding to provide a buffer to current pressures.
The other point that is not well understood is the likely eventual cost of this bail out. What is it? A trillion. – NO – It is very likely that it won’t cost anything at all since you can buy up most of these packaged impaired assets for a pittance, and eventually you’re likely to make squillins in the next 3- 4 years. This was clearly evident in aspects of the Savings and Loans crisis.
So why can’t the private sector do that ?
Fear!! Those who could and are sitting on mountainous piles of money don’t want to risk it. For instance Buffet finds it easier to take a stake in Goldman- this complements and fits in with Berkshire's profile - with assets of around $US278 billion including significant stakes in companies such as Wells Fargo & Co, American Express and the Washington Post Co. Foreigners are also becoming choosey
Don’t forget your overall debt is 375 % of GDP (the highest level ever as percentage) so there are limits (outside of government) with much to spare. !
It always been that markets overshoot on the way down and the reverse on the upside. That’s why you need regulation!! Hand on regulation that can pull the levers when they are needed, hardly a novel approach but one sadly lacking in the past. It’s also hard to spot a better opportunity for permanently changing the current regulatory system for the better and making it more transparent.
Sunday, September 14
The country landscape is extremely fragile and one of the driest on planet earth; continually plagued by drought whose frequency is accelerating. It is hardly surprising our river systems are all in dire need of more water and at a crisis point due to continual irrigation.
Our pioneers were blissfully unaware of the consequences of their actions; reshaping the landscape in the shadow of ill conceived British farming practices with extensive tree felling and overgrazing of sheep and cattle combined with extensive large scale irrigation in arid areas. Although most Farmers have largely reversed this unsustainable trend to become staunch conservationists under the auspices of the land care groups water use remains a vexing question.
Irrigation has not only deprived our river systems of vital water supply but raised the water table to the extent we now have miles and miles of desolate, salt filled land with pools of salt water rendering land unusable. Similar outcomes are prevalent in parts of the USA, Egypt, Iraq and Pakistan, all effected by salination. The worst effected area is our largest river system, the Murray which flows along the eastern side of South Australia, New South Wales and Victoria borders. Irrigation from the Murray sustains this region which produces over 40% of Australia’s fresh fruit and vegetables, but at a terrible cost to the river and its eco system. Irrigation water drawn from the Murray( which represents over 85% of all irrigation in Australia ) has resulted in so little water remaining in the once mighty river its flow was insufficient to carry any fresh water into the ocean. This environmental position for the river if allowed to continue will have a devastating affect on its biology, eliminating most species who are dependant upon the oceans flushing effect near its mouth.
Australia needs to face the reality we are a more suited to dry farming (reliance on rainfall) which applies to most areas which necessitates a sensible plan of transition with adequate compensation to irrigation farmers such as the acquisition of properties at fair market value. Several large scale acquisitions of properties with water licenses to irrigate are under consideration but much more needs to be done. This will involve ongoing negotiation, goodwill and planning at state and federal levels of government. It will require substantial change to lifestyles and less agricultural output but the alternative are not sustainable and the longer we leave it the more painful will be the later adjustment necessary.
I am also not in favour of the current desalination plants under construction or in the diversion of water previously available for farmers to our cities.
The above photos depict local scenes of the Yarra River and nearby; of river banks resplendent of early wattle blossoms to disguise our rivers desperate need for more water flow.