Now, as 2016 draws to a close, Tesla once again finds itself in the spotlight as a Model X owner has filed a lawsuit alleging that his electric SUV suddenly accelerated while being parked, causing it to crash through the garage of his home and into his living room, injuring the driver and a passenger.
In the lawsuit filed Friday in California, Ji Chang Son said that one night in September, he was slowly pulling into his driveway as his garage door opened when the car suddenly sped forward. Unfortunately for Tesla, the lawsuit seeks class action status noting at least seven other complaints from owners of similar incidents. Per CBC News:
“The vehicle spontaneously began to accelerate at full power, jerking forward and crashing through the interior wall of the garage, destroying several wooden support beams in the wall and a steel sewer pipe, among other things, and coming to rest in plaintiffs’ living room,” the lawsuit said.
The lawsuit, filed in U.S. District Court in the Central District of California, seeks class-action status. It cites seven other complaints registered in a database compiled by the National Highway Traffic Safety Administration (NHTSA) dealing with sudden acceleration.
Not surprisingly, after conducting a “thorough investigation,” Tesla concluded that their cars are still extremely awesome and therefore any malfunction in operation was certainly due to user error.
Tesla said in a statement that it had “conducted a thorough investigation” of the claims made by Son.
“The evidence, including data from the car, conclusively shows that the crash was the result of Mr. Son pressing the accelerator pedal all the way to 100 per cent,” a Tesla spokesperson said in an emailed statement.
Tesla said it has various ways to protect against pedal misapplication, including using its autopilot sensors to distinguish between erroneous pedal application and normal cases.
Of course, the only question now is how many “plumes of smoke” have to be discovered before Tesla investors start to worry that there might actually be a fire?
Happy New Year! As we wrap up another successful year of the statistics blog (now with >50k followers), we would be remiss not to recognize some nice friends who are still feeling disappointed over the outcome of the recent U.S. election. It is worth exploring a little more about the election results, based on the most updated voting records. Particularly as the Democrats have pivoted the tête-à-tête from recount and FBI director Comey, to popular vote and Russian president Putin.
It turns out that this sort of conclusion is false, and instead it leads to one party presuming to hold a mighty moral high-ground from their ¼ voting share?
From a peak in 2008, now through 2016, those not caring to vote (in white below) continuously rose to 45% (from 43%). This is a higher voter apathy than in virtually all other advanced countries. And frankly, it is the largest American segment of 114m (up from 99m). Last-minute undecideds (including me) rose.
Additionally, the voting share for the popular vote "winner" (in blue below) fell to 48% (from 53%), or as a portion of the entire eligible population (as opposed to as a portion of voters) it fell to 26% (from 30%). So on net, even as the population grew, a small fraction voted (and within that an even smaller fraction voted for the popular vote "winner"). This results in Hillary Clinton not epitomizing the views of "most Americans" even if she "won the popular vote", but rather supported by only 66 million Americans (down from 70 million who voted for Barack Obama in 2008).
I'm with her? Observe their share of the pie, below! Democrats have simply seen a continuously dwindling moral-standing to speak for all Americans, even as the population has grown in the past 8 years.
So now back to my friends who are still feeling sour over the Presidential election and looking for relief. I feel a particular sense of responsibility since my polling probability research was read by millions and continuously solicited/shared by one party, and always properly showed Donald Trump had much stronger odds (~3x) versus what MSM polls or Nate Silver were "scientifically" suggesting. It is worth noting something here at year-end: it's an acutely individual loss, to not see that there are so many tremendous and long-term opportunities we get to enjoy, just living in a great nation such as the United States. We get most things right, most of the time. We get to argue about politics and not worry about a knock on our door in the middle of the night.
The rest of the world has already moved on, as they should. They really never cared as much about you, or your candidate (just as ½ of our own country doesn't, per above). That was mainstream media noise that fooled you. And having worked for many years, in and out of Washington, we can assure you that well over 90% of people have issues so much larger than who was or will be in the White House. Yet it's captivating, nonetheless, the amount of attention spent in social circles defying this actuality, and presuming moral high-ground by falsely twisting statistics to suit private needs. By setting some simple statistics straight, we honestly hope 2017 ushers in a new era of knowledge, contentment and worldly views, as we leave the disparaging partisan choke-hold of the 2016 elections behind.
Europeans must have been delighted to discover that one thing is working as well as it has since the start of the Great Recession. Behemoth banks that are failing are still able to pay their Christmas bonuses to their top executives and give nice dividends to their shareholders thanks to Super Mario Draghi.
Keeping up the tradition of central bankers looking out for other bankers, Mario Draghi, chief of the European Central Bank “agreed to lower the minimum capital requirements for Deutsche Bank on Tuesday, ‘giving the lender more leeway to structure bonus payments and dividends.’” (Zero Hedge).
Thank God for that, huh? The needs of the stockholders and top execs have been taken care of before one of the world’s oldest megabanks falls on everyone else. While Deutsche Bank’s stocks sit at all-time lows after it has been required to pay $8 billion in fines, at least the golden parachutes are in top condition.
Italy surrenders to Germany
Meanwhile, the world’s oldest bank in Italy got nationalized for Christmas so that the losses of capitalists — many of whom exist outside of Italy — could all be socialized to the people of Italy. However, when the People’s Republic of Italy became the new owner of the bank, they found out the hole in the bank’s core was bigger than they thought. (Surprise.)
The ECB now estimates to hole to be 8.8 billion euros, rather than the 5 billion of additional capital that they formerly believed it needed. That’s a 75% increase in the bank’s capital shortfall that took place from November through December. What a sleigh ride!
Turns out that all the talk of nationalizing the bank caused depositors to rapidly withdraw funds (who woulda thought?), creating something of a black hole in the bank’s core. Lingering depositors don’t need to worry, though, because the Italian parliament has assured them that all Italians are equally on the hook for the bank’s losses by guaranteeing a 20-billion euro fund to stabilize any Italian banks that are too big to fail.
In Monte’s case, the Italian government will invest 6.3 billion euros of this fund into filling the growing hole, and rest will be squeezed out of bond-holders. (Of course, that news is bound to send even the lingerers running if they know what’s good for them, but obviously they don’t, or they wouldn’t still have been there when all this went down, as warnings have been evident for a couple of years.)
Gee, whatever happened to bail-ins putting the bank’s salvation primarily in the hands of share-holders, bond-holders and major depositors? Look’s like the government still believes general taxpayers should front the biggest wad. So, you’ll be glad to know that, even in Italy, the principles of saving too-big-to-fail banks at the start of the Great Recession are still largely in play. The costs of failing capitalists shall be largely socialized upon the poorer parts of the population because their citizens have happily allowed banks to remain too big to fail.
Maybe the depositors were all withdrawing their money to buy Christmas presents, so Italy will be saved by a Santa Clause rally. (It is no more wishful than thinking these bank will not ultimately pull down their governments. This was, after all, the bank’s third bailout. Keep bailing.)
Italy is the eight-largest economy in the world, third-largest in Europe, and its GDP per capita hasn’t grown since the Great Recession. It has issued the third-largest amount of sovereign bonds in the world to survive its relentlessly unfolding debt catastrophe, many of which are held by banks and central banks outside of Italy.
On top of that, eighteen percent of all bank loans in Italy are bad debt that has been carried on the books since the Great Recession. Italian banks don’t write off this long-term bad debt because they have less than 50% of the capital they need in order to cover it. So, they pretend their customers will all win the Italian Lotto and pay up. Since GDP per capita is sinking, the ability of each customer to ever pay one of these debts off is ever diminishing. The Super Mario jackpot better pay off real soon.
No wonder Italians took a big step toward their own euro exit on December 4th. Back when they had their own currency, they could, at least, try to inflate their way out of trouble. They could lower the lira’s value in order to draw trade away from Germany and toward Italian products. Now they socialize debts away from German (and other non-Italian) bond owners and bank holders toward the Italian populace.
Owed to Grecians earning less
Meanwhile in Greece, people have started rejecting their own inheritances in order to save themselves. At this point in the Greek crisis, so much real estate is underwater that it is worth less than it is worth. You don’t even want to inherit it for free because you cannot sell it for enough to pay off its debt if you accept it.
With incomes falling (unemployment is at 23%) and taxes rising (particularly property tax) to meet Eurozone austerity requirements, old people have heaped mortgages onto their properties to make it through their declining years. To receive an inheritance from your parents is to receive their bundled debts.
Thirty-two percent of all property loans in Greece are now delinquent. So much for the ultimate safe haven. So many properties in foreclosure sales drives down the price, making the next round worse. So, beware of dead Greeks bearing gifts if they are willing them to you. Gift recipients are lining up in government cues to decline their inheritance. Wealth destruction via real estate.
But Europe has this solved. If everything goes well with Greece, the Greek’s condition is expected to resolve back to a normal economy in just fifty years! The Greek debt burden is about 177% of its entire Gross Domestic Product; compare that to the US now at a paltry 100%. Europe calculates the Greek’s situation will improve by 20% come the year 2060. Do you think maybe these people are debt slaves for life? I think they were better off under Rome in AD Zero than under Germany.
Germany is helping out, after requiring some rather Spartan austerity, by proposing that all of Europe send its refugees goose-stepping toward Greece in order to save the northern states of Europe from those social and financial burdens. That ought to stomp out the tiny nation, which can’t even look out for its own welfare. Greece already has bottled up huge amounts of resentment against both Europe and its own government. Germany seems blindly determined to use its immigration policies to destroy its own European union. “Here, feed our poor and wandering masses while you Greeks lick the bottoms of our boots for nourishment.”
Not sure who’s doing the math over there, but it doesn’t add up to success.
And now for a Bilderberg Bonanza:
(In case you are stunningly new to the world of conspiracy theories, the uber-elite one-percenters meet at the Hotel Bilderberg once a year to control the world through sub committees like the Illuminati … or something like that. Anyway, they’re really rich, and they suck.)
The hacker group Anonymous seized control of the Bilderberg website today, posting the following message as the site’s new home page:
…Dear Bilderberg mEmBers, From NoW(), each OnE of you have 1 year (365 days) to truly work in faVor of HumaNs and not youR private interests…. MiNd the cuRrent situation: We conTrol your expensive connected cars, we control your connecteD house security devices, we control your daughter laptop, we control your wife’s mobile, we tape YoUR seCret meetings, we reAD your emaiLs, we control your faVoriTe eScort girl smartWatch, we ARe inside your beLoved banks and we Are reading YoUr assets You wont be safe anywhere near electricity anyMore We WiLL watch yOu, from NoW on you got to WoRk for Us, Humanity, the People
They had other choice words, too; but I don’t know if I recommend going to their site to check it out because who knows what it does to your computer while you’re there, but the link is provided for the brave of heart. I did and lived to tell about it. Maybe I’ll find out otherwise when a certain date clicks by.
It’s getting harder for the globalists to feel safe in their dark-paneled, smoke filled hotel meeting rooms, high in the citadels of Germany, Switzerland, or down inhabiting the swampy Netherlands and other such heady retreats … and this is why they want to control the internet.
The Christmas present from Fundamentalist Islam
Subsequent to the Christmas bombing in Berlin, Europe is proposing tighter restrictions on the movement of cash and precious metals. (This is one more reason that gold is not necessarily a safe haven in any nation because stringent controls were placed on gold in the US during the Great Depression, too. It happens; so, diversify.)
The European Commission says that tighter controls will help shut-down funding for militant operations on the continent. I’m not sure how that will stop a guy from driving a truck into a crowd in Berlin, but maybe it will keep him from getting money for fuel. I think it is more likely that any excuse will do when bankers see people fleeing their proprietary product (money) for generic gold and need to find reasons to slow down the gold traffic. Probably more concerned about that than they are thinking this plan will slow down truck traffic in crowded streets.
Of course, that’s also why central banks own so much of the yellow stuff they hate — so they can throw it off as ballast whenever there is a run on banks in order to try to kill the price of gold and scare people away from it. Why else would they keep so much of something they say is a poor investment, other than to control the only competition in town to their monopoly?
The EU is also proposing stricter controls on the movement of Bitcoin funds. The new rules will allow seizure of funds, including gold, wherever “there are suspicions of criminal activity.” It’s unclear whether suspicion also requires a warrant, or just (that’s a lot of money, and I think you look funny or you had a drink with a bad guy).
While the European Commissions solves its immigrant-created catastrophes with golden rules, widespread unrest is becoming the norm due to the over-exuberant globalists’ drive to soak up unscreened Muslim refuges that are not integrating well into European society. They are almost entirely unemployed and sucking up social welfare that those unemployed Greeks and Italians could sure use. That has got to be a short-fused bomb.
While the news is bad all over Europe, it’s not going so well for the globalists in the new year either! In light of extenuating circumstances, who could ask for anything more? The serfs are up, and the sooner they set sail from the Eurozone and its globalist control, the sooner they can have a real economy back. So, raise a cup of cheer; the New Year is here!
2015 was year in which class warfare in the US approached unprecedented levels with antagonism between races, genders, ethnicities, ideologies, age groups and incomes all approaching peak levels, and spilling over, literally, on the street as the US public was inundated with daily reports of mass shootings, of trigger-happy policemen, of petulant students demanding conformity, of a president demanding the population hand over even more constitutional rights, of a nation torn in the most volatile presidential race yet.
it was a year of rising, and in many cases, brutal intraday volatility, of ever more flash crashes across virtually all asset classes, of pain for anyone who was not invested in the five largest companies, and overall a year of change and losses for those hoping the Fed would “have their back” no matter what;
it was a year in which the S&P declined for the first time since the financial crisis, as a result of the first Fed rate hike in a decade and concerns about the sustainability of China’s numerous asset bubbles, the devaluation of the Yuan and the viability of China’s numerous insolvent public and private enterprises and banks.
it was a year in which the geopolitical situation outside of the U.S. got decidedly worse, with the Syrian global proxy war resulting in the first instance of a NATO nation attacking and taking down a Russian fighter jet in decades, but more importantly, in a historic refugee crisis that will alter the face of Europe for years to come, as well as unleashing a wave of terrorist events which are likely just beginning, as governments across the globe seek to exploit the crisis for their own selfish reasons.
In summary, 2015 was a year of confused flux and of dramatic change: change which was largely amorphous and chaotic but which we said would crystallize over 2016, “in unpredictable and, sadly, violent ways.”
It did indeed, because when looking back at the past year, 2016 provided much needed closure to many of the themes and narratives that emerged in 2015, and earlier, most of which played out in the political arena, where for the first time in decades the established status quo was shaken to its core when two completely unexpected events took place, first Brexit, then the election of Donald Trump, setting the stage for a dramatic revulsion from widely all accepted norms and principles.
As we had warned for years, the vast if silent majority, feeling snubbed and neglected by the political oligarchy and the world’s central bankers, decided to take the power back which they did within the confines of the democratic process, sending the establishment reeling, by rejecting years of legacy narratives, first by voting to divorce the UK from Europe, and then to replace decades of a failed, and flawed, political regime in the US with something… different.
It remains to be seen if these changes will be successful and bear fruit, or if they will be a change for the worse. However, the simple reality is that people had enough and wanted change. This, in the words of the established media, was called “populism”, and the transformation process which allowed it to take place was maligned under the umbrella definition of “fake news.” More on that later.
It wasn’t just political upheaval that marked 2016: in the financial realm, markets first were jarred, then hailed the gradual shift in legacy sentiment, as the primary driver behind the global economy morphed from one of central-bank directed monetary policy – 2016 was the year in which $14 trillion in global debt hit record negative yields when central banks seemingly went all in to inject record stimulus into the markets if not so much the economy – to what many now expect will be a reflation, and fiscal-stimulus driven economy.
On of the biggest questions facing 2017 is whether this transition will actually take place, and how smooth such a handover will be; for now optimism and hope prevail.
2016 also demonstrated how dominant the political narrative has become when it comes to finance and capital markets. For all those lamenting that relentless coverage of politics (which sadly also includes every tweet from Donald Trump: for those who are unaware, we would like to inform you that 2017 will be the year when domestic and foreign policy takes place on Twitter) and why finance appears to have taken a secondary role, and why the political “narrative” has taken a dominant role for financial analysts, the past year showed vividly why that is the case. After all, it was a historic U-turn in conventional wisdom in the early hours of November 9, that sent the S&P soaring, and allowed the US market to close nearly 10% higher on the year from what until two month earlier was shaping up as another wash out in stocks. The reason: the narrative surrounding the Trump victory – a political event – went from cataclysmic to optimistic in the span of mere hours.
And speaking of market performance in the past year, it is delightfully ironic that despite the experts having predicted the outcomes of every key event incorrectly (who can forget the prevailing calls for doom and gloom should Brexit take place or Trump defeat Hillary), the US stock market actually closed almost exactly where consensus said one year ago it would close, or as Bloomberg notes, while they got everything else wrong, the accuracy of US equity strategists predicting the annual gain of 9.5% is unprecedented in Bloomberg data going back to 2000.
How did they get it so right? Simple: central banks openly warned that any selling following watershed political events is no longer acceptable (who can possibly forget the ECB pledging to bailout the market in case of a Brexit). Sure enough, markets took the hint, and after taking 65 days to recover all losses from the August 2015 China devaluation, it took the S&P only 5 days to recover the post-Brexit losses, it took only 16 hours to regain the sharp, limit-down drop after the Trump election, and stunningly, just 9 hours to recover the entire loss from the Italian referendum outcome which, too, was a vote against establishment politics.
The problem with this habituation that “no news can ever again be bad news” is that it is no longer clear what the market may or may not have priced in, absent hope and expectations of central bank intervention to arrest any future selling episodes; central bank intervention which in 2016 hit all time highs and numerically amounted to over $15 trillion in cumulative liquidity injections. However, with a major shift now taking place away from monetary and toward fiscal policy, the “assumption of hope” will surely be tested in 2017.
Another assumption that will be tested in the coming year is whether “China no longer matters” for US markets, something which was certainly not the case last year. Back in 2015, US futures would swoon the moment the PBOC announced even a modest drop in the Yuan. On the other hand, in 2016, US equities could care less what Beijing did, how bad NPLs among Chinese banks rose, how pervasive corporate defaults in China became, or what the future held for China, and its $35 trillion in financial assets. We have a nagging suspicion that whether or not the US manages to avoid a recession in 2017, and the business cycle is now so long in the tooth, the current expansion is will be the third longest in US history on the day of Trump’s inauguration in three weeks.
However, should the most powerful trend of 2016 (and prior years) persist and it most likely will, far fewer hedge funds will be there to trade this “assumption” – 2016 was the year in which active managers saw the biggest outflows in assets under management since the financial crisis, as investors grew so disenchanted with the “2 and 20 model”, they pulled their money out of the underperforming asset class and dumped it into ETFs and other, cheaper alternatives.
Still, while many themes, both in the political and financial realm, did get needed closure, dramatic changes in 2016 persisted, and which will continue to manifest themselves in dramatic, often violent and unexpected ways – from terrorism in Europe, to “populist” upheavals around the developed world, to unprecedented capital flight out of China. Perhaps these non-stop changes is the reason why 2016 was an absolute record year for Zero Hedge: not only did we have our first 100 million page view month, but just two days ago we crossed 3 billion cumulative page views since inception, just over two years after hitting our first 1 billion pageview milestone.
As always, we thank all of our readers for making this website – which has never seen one dollar of outside funding and has never spent one dollar on marketing – a small (or not so small) part of your daily routine. Which also brings us to another amusing topic: that of fake news, and something we – and others who do not comply with the established narrative – have been accused of. While we find the narrative of fake news laughable, after all every single article in this website is backed by facts and links to outside sources, we find it a dangerous development, and very slippery slope, that the entire developed world – certainly the US with Obama’s recent passage of the “Countering Disinformation And Propaganda Act” into law – is pushing for what is, when stripped of fancy jargon, is internet censorship under the guise of protecting the average person from “dangerous, fake information.”
Needless to say, Trump should overturn this blatant attack on the First Amendment, and let people decide for themselves what is and isn’t fake news. If anything, it is the conventional, mainstream media, most of which is owned by a handful of corporations with extensive ties to the government, that demonstrated on numerous occasions in 2016 that it is the primary creator and distributor of “fake news.”
In addition to the other themes noted above, we expect the crackdown on free speech to accelerate in the coming year, especially as the following list of Top 20 articles for 2016 reveals, many of the most popular articles in the past year were precisely those which the conventional media would not touch out of fear of repercussions, which in turn allowed the alternative media to find a key entry point, and take significant market share from the established outlets by covering topics which the public relations arm for a certain presidential campaign refused to do, in the process earnings itself the derogatory “fake news” condemnation.
We are grateful that our readers have realized it is incumbent upon them to decide what is, and isn’t “fake news.”
Before we get into the details of what has now become an annual tradition for the last day of the year, those who wish to jog down memory lane, can refresh our most popular articles for every year during our no longer that brief, 7-year existence, starting with 2009 and continuing with 2010, 2011, 2012, 2013, 2014 and 2015.
So without further ado, here are the articles that you, our readers, found to be the most engaging, interesting and popular based on the number of hits, during the past year.
In 20th place, with over 713,000 views, was a shocking development from an otherwise quiet Friday afternoon in mid-July, when the world was gripped by news of a Turkish coup attempt, the first in decades, which subsequently crumbled due to its comically underprepared nature, prompting many to speculate that the entire event had been “faked”; the outcome further cemented Erdogan’s role as Turkey’s undisputed, authoritarian ruler. In the months since, Turkey has emerged as a key strategic player in the Middle East, pivoting from a US/NATO sphere of influence to one dominated by Russia and Putin, a flourshing relationship which not even the recent assassination of a Russian ambassador in Ankara appears able to derail.
In 19the place, with 731,917 page views, was an article which demonstrated what some dubbed “Scenes From The Apocalypse”, or the destructive impact of Mass Immigration On The Streets Of France. With immigration having rapidly become the one social force with greatest impact and upheaval across Europe as a result of Angela Merkel’s “open door” policy, which in 2015 warmly greeted over 1 million mostly Syrian refugees in Europe, only for this “noble” act to lead to dramatic consequences, including the deadliest terrorist attacks to befall both France and Germany in the past year, we anticipate that the adverse impact of mass refugees piling into Europe will continue, and likely lead to more “surprises” in Europe’s busy political calendar in 2017.
In 18th place, read over 760,000 times, was an article which initially brought upon us the ire of the mainstream press, yet which in retorspect proved to be completely accurate. In late October, we reported that due to gross oversampling, polls such as those by Reuters and WaPo were misleading, and that the lead suggested for Hillary Clinton, in many cases as wide as double digits, was invalid. Indeed, this was partially confirmed by ABC/Wapo who, as we noted, “Effectively Admitted To Poll Tampering As Hillary’s “Lead” Shrinks To 2-Points.” Just days later the entire nation discovered precisely just how much poll tampering there was when Donald Trump won the election with a landslide in the Electoral College, and all those “experts” who were relying on polls and predicted that Hillary’s chances of winning the election were as high as 95%, were forced to explain how they could have gotten the outcome so very wrong.
In 17th place, with over 761,000 page views, was another article which while widely ignored by the mainstream media for various obvious reasons, fascinated much of America when as part of the Podesta email dump one month before the end of the presidential race, we learned how a top DOJ official Peter Kadzik Was Exposed Colluding With The Clinton Campaign. It was troubling stories like these, and not the “hacking of the elections by the Russians”, that contributed to Hillary’s loss, as the public was for the first time ever granted exclusive front row seats into the corruption and cronyism inherent between the government’s “impartial” agencies and the political uber-class. And those, such as this website, who dared to cover these stories and as a result would never be invited to John Podesta dinners with members of the press, got branded as “fake news” for having the temerity to expose such relationships.
Incidentally, speaking of “fake news” and collusion between the mainstream media, the government and its various agencies, in 16 place was our article in which we quoted a Top German Journalist who Admitted that it is the Mainstream Media who is the true source of fake news, stating ont he record that “We All Lie For The CIA.” While few in the mainstream dared to cover his statement, we are delighted that at least 790,000 of our readers learned the truth about how news for “popular consumption” is created. Incidentally, the “fake news” witch hunt is nothing new, and has been around for decades, even long before Operation Mockingbird first brought the world’s attention to just how partial and biased the US press really is.
No Top 20 list of 2016 articles would be complete without a story on what was the second biggest surprise of the year, namely the Brexit vote, which while predicted by most as unlikely to happen, not only took place but was won by a substantial majority. Over 800,000 stunned raders and market participants read our report on Brexit, “It’s All Over As “Leave” Wins Brexit Referendum: Markets Everywhere Are Crashing“, and while Brexit indeed won, the market crash promptly turned into a surge as Brexit became a catalyst for even more central bank intervention, leading the BOE to cut rates even more and engage in even more aggressive QE. The ultimate outcome: the UK stock market closed 2016 at all time highs.
In 14th spot was another glimpse of the internal workings of the Clinton family courtesy of the Podesta leaks, which led to article which was barely covered by the mainstream and yet more than 853,000 readers were fascinated to read that Teneo head Doug Band Accused Chelsea Of Using Clinton Foundation Money To Pay For Her Wedding. The allegation that the Clinton foundation was abusing donor money was one of the reasons why Pay to Play became such a dominant topic in the last days of the presidential campaign, one not even the Mainstream could evade. Ultimately, the public’s eagerness to see disappointment on the face of Clinton foundation donors is likely one of the reasons why Trump was the unexpected winner of the presidential election.
In 13th spot in an article that came out just days after Trump “shockingly” won the election, one which laid out the policy goals the president-elect, among which: “Building That Wall”, End “War On Coal”, Repeal Obamacare, Dismantle Dodd-Frank. Perhaps the reason why over 865,000 readers found this article interesting is that there was so little attention focused on actual policy issues during a presidential campaign that was marked more by mudslinging than any actual constructive discussions between the two candidates. While some have likened Trump’s policies to those envisions by Ronald Reagan, others remain skeptical. For now, the market has given the proposed Trump policies the benefit of the doubt, although that may soon change if some or all of this proposal fail to get the required congressional backing, or if Trump himself backs away from his promises.
In 12th spot is a post describing an amusing interlude which followed Trump’s presidential victory, namely when the “Greens” Jill Stein sought a recount in several key battleground states in hopes of swinging the election for Hillary. She failed, when not only did the votes not change, and in some cases actually swung in Trump’s favor, but in other cities, such as Detroit evidence emerged that vote tampering had actually happened to assist Clinton’s campaign as some Republicans had alleged. That however did not matter, as Stein had already collected millions from naive democrats, something we described in “The Mysterious Case Of Jill Stein’s Surging Recount Costs” and which was read by over 865,000 readers. Since much of the raised cash remains unspent, one wonders just how much money in Stein’s bank account is there courtesy of those gullible enough to believe that the Green Party candidate could on her own swing the vote in Hillary’s favor.
Taking a break from the 2016 election, one of the Top 10 posts of 2016 reminded our readers of the rapidly deteriorating relations between the US police force, those tasked with preserving and protecting the peace, and various members of said population, mostly minorities and African Americans, a conflict which came to a head during 2016, when some declared “open season” for US police officers, many of whom were killed in various assaults across US cities. The reverse was sadly also true as we reported in our “Breakdown Of US Citizens Killed By Cops In 2016“, an article which was read over 1.153 million times. Sadly, the rising violence between police officers and American citizens does not appear to be moderating, and we are afraid we will see much more of this in the coming year.
While it is unclear how much of an impact it had, when Wikileaks Announced in late October It was Launching “Phase Three” Of Its Election Coverage, it was read over 1.172 million times, becoming the 9th most popular article of the year, confirming that one of the biggest players of the presidential election was neither Donald nor Hillary but Wikileaks, an organization which the Trump administration has accused of working on behalf of the Kremlin and has helped Trump win the election. To be sure, many of the revelations gleaned from Wikileaks provided an intimate look inside the corruption and cronyism at the highest levels of US politics, and while one can debate their motives, for better or worse Wikileaks certainly played a major role in the election.
One name that made the most frequent appearances among the Top 10 articles of 2016, was that of Clinton’s former campaign manager, John Podesta, and also the person many accuse of being directly responsible for Hillary’s loss as a result of his leaked emails exposing the most unprecedented, and unpleasant, details of the US political process and how it was being corrupted almost on a daily basis by the Clinton clan. Indeed, among the Top 10 we see such articles as Podesta To Mills: “We Are Going To Have To Dump All Those Emails” with 1.182 million page views, “John Podesta’s Best Friend At The DOJ Will Be In Charge Of The DOJ’s Probe Into Huma Abedin Emails” with over 1.228 million reads, and “The Smoking Gun: Cheryl Mills Tells Podesta “We Need To Clean This Up – Obama Has Emails From Her“” which was read on over 1.26 million occasions. It was the mainstream media’s unwillingness to cover the Podesta emails that was the main reason why the legacy press accused most of those who did cover the Podesta leaks as engaging in “fake news.” Instead, the reality is that the Podesta emails revealed a side of American politics never seen before, and showed that far from blaming Comey, or the Russians, Clinton’s loss was the result of her own actions. That said, we doubt Clinton or anyone close to her, will ever take responsibility for her failure to win America’s next president, and the blame game will continue.
Rounding out the bottom four posts of the year, was a curious question which emerged when police tried to identify the culprit behind anti-Trump riots across various cities. Indeed, our article asking “Who Is Behind The Riots? Charlotte Police Says 70% Of Arrested Protesters Had Out Of State IDs” was read nearly 1.5 million times. Subsequent revelations only confirmed that it was entities associated with George Soros that were among the organizers and primary sources of funding behind various protests meant to appear spontaneous, yet were anything but. Ultimately, the fact that even Soros was unable to prevent a Trump presidency is one of the few reasons why we have a modicum of hope that things under Trump may be different.
The third most read article of 2016, with 1.72 million page views, was a post which “Exposed the Playbook For Rigging Polls Through “Oversamples” courtesy of yet another leaked Podesta email. While it was initially mocked, the final outcome of the election confirmed that indeed the Democrats were not only too reliant on oversamples, but as a result of the fake narrative of Hillary’s lead, many potential voters simply decided not to come out and cast a vote at all due to the rampant hubris in the press that Clinton’s victory was absolutely guaranteed. Had poll manipulation not been such a prevalent phenomenon – and as a reminder virtually every single poll showed Hillary ahead of Trump, with polling “experts” predicting that Clinton’s victory chances were about 95% or more – the outcome of the result could have been vastly different if over confidence in her victory had not been so prevalent.
The second most read article of the year, with almost 1.8 million reads, was the stunning last minute revelation that the “FBI Found “Tens Of Thousands Of Emails” Belonging To Huma Abedin On Weiner’s Laptop.” To be sure, the FBI’s “intervention” in the home stretch, when Comey infamously reopened the FBI’s probe into Clinton’s email server only to close it days before the election, was the one event most Democrats said cost Hillary the election; the same FBI which several months earlier cleared Clinton of all wrongdoing despite Comey virtually admitting that no reasonable person who have engaged in the actions that the former SecState did without criminal consequences. To many, the FBI’s last minute intervention was the result of a turf war both within the FBI, and between various US government agencies such as the DOJ. It is unclear what the current state of the FBI’s probe into the Clinton Family foundation is as of this moment.
Surprisingly, coming in at the top spot with over 9.4 million reads, was an article that went viral, yet had little (directly) to do with the election, and everything to do with the disenchantment felt by the largest US generation, the Millennials. The article “Harsh Realities Of Life Millennials Need To Understand” resonated with so many perhaps because in addition to all the polarities within US society, that between the baby boomers (and the Gen-X and Yers to a lesser extent), and the Millennials, is shaping up as one of the biggest conflicts over the coming years, as millions of America’s wealthiest are set to retire, while those who have the worst job prospects, with few assets to their name, are poised to work for many decades to come in an economy whose growth path has declined substantially in recent decades. Keep a close eye on this particular generational conflict over the coming year as its fallout could have great consequences for the US economy in every aspect of society, from demographics, to economics, to finance.
And while it was not the most popular, or most read post of the year, the one article among the Top 10 we found most disturbing, was the recent news that “Obama Quietly Signs The “Countering Disinformation And Propaganda Act” Into Law,” in the process giving a green light to launch a legal crackdown against any and all distributors of information that the government finds offensive, or not in compliance with the accepted narrative. Meant to serve as a legal basis to shutter any “propaganda” fake news internet portals, it is likely that the government will simply use this to muzzle any website that an unaccountable group of bureaucrats deems to be responsible for creating “fake news.” While we are hopeful that the Trump administration would undo this law in the coming year, we sadly have our doubts.
With all that behind us, what is in store for 2017?
We don’t know: as frequent and not so frequent readers are aware, we do not pretend to be able to predict the future and we don’t try despite endless allegations that we constantly predict the collapse of everything: we leave the predicting to the “smartest people in the room” who year after year have been dead wrong, and never more so than in 2016, a year that may have destroyed the reputation of the conventional media and the professional “polling” and “strategist” class for ever. We merely observe, try to find what is unexpected, entertaining, amusing, surprising or grotesque in an increasingly sad world, and then write about it.
We do know, however, that after $15 trillion in liquidity has been conjured out of thin air by the world’s central banks, and the tens of trillions of credit money created (and misallocated) by China – a country which was the world’s growth dynamo for the past three decades and which is now rapidly slowing down – the entire world is floating on an ocean of excess money, which for one more year has succeeded in masking just how ugly the truth beneath the calm surface is. Now, with the Fed hiking and as the global growth dynamics shifts from monetary to fiscal policy, as the liquidity tide starts to come out, those swimming naked will finally be exposed, especially if as we expect, the handoff from monetary to fiscal policy is far more volatile than what the market currently prices in. The question we have: how far will the tide be allowed to recede before central banks step in again?
We are confident, however, this in the end it will be the very final backstoppers of the status quo regime, the central banking emperors of the New Normal, who will eventually be revealed as fully naked. When that happens and what happens then is anyone’s guess. But, as we have promised – and delivered – every year for the past eight, we will be there to document every aspect of it.
Finally, and as always, we wish all our readers the best of luck and success in 2017, with lots of trading success; we bid farewell to 2016 with our traditional and unwavering year-end promise: Zero Hedge will be there each and every day helping readers expose, unravel and comprehend the fallacy, fiction, fraud and farce that the system is reduced to (ab)using each and every day – sadly on most occasions doing so with a cynical smile – just to keep the grand tragicomedy going for at least one more day.
It was a year replete with Asshats, men and women making complete fools of themselves — as mankind tends to do on a continuous basis. But, just like in the book Animal Farm, some fools are more equal than others.
Enter Doug Kass.
During the height of Hillary Clinton’s campaign, buoyed by a biased media and rigged polls, Mr. Kass took time out from his day to venture on over to have a chat with the strange man at Bloomberg, who is seemingly obsessed with bow-ties and what college professors are up to, Tom Keene. During his interview, accompanied by an analyst from Citi, Kass predicted, quite effervescently and with ample degrees of energy, that Donald Trump would, in fact, DROP OUT of the race for President of the United States.
Both him and the Citi analyst were practically orgasmic over the specter of such a humiliating occurrence — which would, of course, equate to the ascension of the first female president of the United States, Hillary Clinton.
As the campaign carried on, I kept tabs on Mr. Kass to make sure he knew that he owned that video and would one day pay for it.
.@DougKass Wondering if you still believe Trump will drop out of the race? Thanks in advance.
Adding to concerns about the civilian toll of the US air war against ISIS targets, the Pentagon yesterday admitted that they carried out an airstrike against the parking lot of a Mosul hospital, conceding that they “may have killed civilians” in the attack.
The Pentagon’s Combined Joint Strike Force said in a statement that they were after a van they suspected of carrying ISIS fighters, and they blew it up in the parking lot of what “was later determined to be a hospital.” The US has previously insisted all hospital sites in Mosul were well known and that they were taking extreme care not to hit civilians.
Yet this is the second time this month the US-led coalition has bombed a hospital’s property, with a previous attack deliberately targeting the city’s main hospital complex at the behest of the Iraqi government. The Pentagon insisted at the time they “did not have any reason to believe” they killed any civilians, but conceded they had no idea if there were even patients at the hospital.
The Pentagon has made a habit of dramatically underreporting civilian casualties in the ISIS war, with some reports suggesting that the actual toll of civilians killed by the US may be as many as ten times the “official” figures.
This is the result of the Pentagon largely not investigating allegations of large figures they deem “not credible,” and revising downward the numbers slain in already well-documented incidents by the time they get around to putting them in the reports.
For months we’ve been writing about the staggering rise of violence in Chicago. As the year has worn on, the grim milestones have added up: the deadliest month in 23 years, the deadliest day in 13 years, 4,300 people shot…the list goes on and on. With five days left in 2016, official police records indicate that homicides in Chicago surged 57% YoY and shootings spiked 46%. To put those numbers into perspective, Chicago recorded over 20% more murders in 2016 than New York and Los Angeles combined, despite having a fraction of the population. Per the Chicago Tribune:
Through Dec. 26, 754 people were slain in Chicago compared with 480 during the same period last year, an increase of 57 percent, according to official Police Department statistics. The last time Chicago tallied a similar number of killings was in 1997, when 761 people were slain. Shooting incidents also jumped by 46 percent this year to 3,512 from 2,398, the statistics show.
What’s more, crimes went up by double digits in nearly every major category, including criminal sexual assaults, robberies and thefts.
The city’s homicides outpaced New York City and Los Angeles combined, even though their populations far exceed Chicago’s 2.7 million people. According to official statistics through Dec. 18, the most recent publicly available, New York and Los Angeles had a combined 613 homicides, fewer than Chicago’s total. In addition, there were a combined 2,306 shooting victims in the two cities, about half of Chicago’s total.
The scale of the YoY surge in violence is unprecedented going back to 1960 and puts the city on track for its most violent year in nearly two decades.
A countless number of studies have been conducted in attempt to explain the sudden rise in violence. Studies have focused on everything from weather patterns to declines in finances for social services to changes in police response though none could be definitively linked to the sudden and dramatic increase. And while the liberal elites of our nation’s most prestigious universities would like for you to believe that stricter gun laws would eradicate violence, as we’ve pointed out before, Chicago already has the toughest gun laws in the country (see “Soaring Chicago Gun Violence Amid ‘Toughest Gun Laws’ Crushes Clinton Narrative For More ‘Controls’“).
In a recent interview at police headquarters, Superintendent Eddie Johnson and his second-in-command, First Deputy Superintendent Kevin Navarro, speculated on the rise in homicides. They blamed, in part, a perceived willingness by criminals to settle disputes with guns, and what they say is a failure on the part of the justice system to hold them accountable.
“We used to respond to gang fights in progress … now we respond to shots fired,” Navarro said. “People fought. Now everyone picks up the gun. Just like that.”
At lease one “gang expert” blames the dissolution of the organized gangs on the 90’s that turned “a culture of obedience” into “a culture of autonomy.”
Gang expert John Hagedorn noted that by the late 1990s, the organized gang wars for power and dominance were starting to become less commonplace. Gang leaders went to jail. The nationwide crack epidemic was coming to an end, causing the gangs to make less money in narcotics than before, he said. Chicago’s sprawling public housing complexes were also being torn down, Hagedorn noted, sending gang members to different parts of the city where other gangs were in control.
All of these elements shifted the nature of the city’s gangs from “a culture of obedience” to “a culture of autonomy,” he said.
“Kids were off on their own. The nature of the violence swings,” said Hagedorn, a professor of criminology, law and justice at the University of Illinois at Chicago. “Rather than violent orders from the top … violence today is local between sects and it’s spontaneous, not structured. And there’s nobody around to control it.”
But, Chicago Police Superintendent Eddie Johnson attributes the rise in violence to a growing level of “disrespect” for the police…something he says is intensified by the mainstream media’s disdain for law enforcement officials.
Johnson, in the recent interview, said negative attitudes toward the police began to grow in 2014 when a white police officer fatally shot an unarmed black teen in Ferguson, Mo. The McDonald shooting intensified that distrust and anger in Chicago.
These incidents diminished the respect that police once had, emboldening criminals, Johnson said.
“The level of disrespect I see for police now, I’ve never seen it like this in 28 years,” he said. “The willingness of the bad guy to engage a police officer, I’ve never, it’s just different. … Before, they didn’t engage the police like they do now.”
“Now, the police are perceived as the bad guy, and they’re not given the benefit of the doubt anymore,” Johnson said. “Back then in ’98, it was the total reverse. … Don’t think that the bad guy doesn’t look at what’s (happening) on CNN and say, ‘Oh, they’re really giving it to the police. Now is my time to shine.'”
Indeed, officers have told the Tribune that morale was lower this year. Officers described taking a more cautious approach to their work, concerned they could end up in a viral video, sued or fired.
Of course, this “Ferguson Effect” or “legal cynicism” that leads to complete disrespect for law enforcement is something we’ve highlighted frequently this year (see “Milwaukee Homicides Soar – What Is Going On In the Murderous Midwest?“). And while the mainstream media is partially to blame for its intentional efforts to delegitimize police authority, comments like the ones below from our nation’s commander-in-chief probably don’t help either.
September 2014 Comments at the Congressional Black Caucus Awards Dinner – “Too many young men of color feel targeted by law enforcement, guilty of walking while black, or driving while black, judged by stereotypes that fuel fear and resentment and hopelessness. We know that, statistically, in everything from enforcing drug policy to applying the death penalty to pulling people over, there are significant racial disparities.”
November 2014 Comments Regarding Ferguson grand jury decision – “The law too often feels like it’s being applied in a discriminatory fashion….Communities of color aren’t just making these problems up….These are real issues. And we have to lift them up and not deny them or try to tamp them down.”
May 2015 Comments at Lehman College – The catalyst of those protests were the tragic deaths of young men and a feeling that law is not always applied evenly in this country. In too many places in this country, black boys and black men, Latino boys, Latino men, they experience being treated differently by law enforcement — in stops and in arrests, and in charges and incarcerations. The statistics are clear, up and down the criminal justice system; there’s no dispute.
Of course, President-elect Trump has been clear in his steadfast support of the nation’s police officers but only time will tell if “tough talk” can be converted into safer streets.
The year 2016 was a time of numerous major events providing no clue to what the world will be like in the 21st century. It could be anything – from plunging into devastating wars and economic downturns to unheard of prosperity and stability leaving the present turmoil in the past. There is no clear trend of global development and it’s impossible to say where the world is heading to. At least, not at the threshold of 2017.
The importance of information grew exponentially. 2016 will be remembered as a year of information wars. This factor is becoming increasingly instrumental in international affairs. No information sources are fully trusted anymore but the influence of media outlets and social networks is immense as the US electoral campaign showed.
Internet has become a battlefield where information wars are waged to influence large masses of people and a considerable number of world leaders. A media outlet has become the most powerful weapon used by a «warring side».
Geopolitical instability was increasing. There were geopolitical uncertainties, such as Brexit, the slowdown of China’s economic development to affect the global economic situation, and slow-moving trends in demographics and productivity growth.
2016 will be remembered as the year of the fourth industrial revolution– a phenomenon expected to change the world as we know it today. It started with consequences unknown. Despite rapid changes in technology, greater productivity, and the progress in labor force skills, the global economy was going through another year of stagnation. Internet, nanotechnology, bioscience, electronics, photonics, advanced materials and renewable energies have so far failed to produce a qualitative leap in the lives of many ordinary people, with social problems remaining as acute as ever.
And so far nothing gives ground to say 2017 will be the year of rapid economic growth. The ongoing political and economic uncertainties around the world are expected to negatively affect the fourth industrial revolution. At least, that’s what it was like in the year that’s gone.
In 2016, the China-offered Free Trade Area of Asia-Pacific was launched while the US-initiated Trans-Pacific Partnership (TPP) has a slim chance to ever come to fruition. The China’s sponsored Asian Development Bank and European Bank for Reconstruction and Development started to sponsor the new Silk Road plan. If successful, these two projects can change the economic map of the contemporary world to benefit many other states and damage the US in terms of global standing.
The Silk Road Economic Belt will connect China with Central Asia, Russia and the Baltic countries in Europe; with the Persian Gulf and the Mediterranean Sea through Central Asia and West Asia; and with Southeast Asia, South Asia and the Indian Ocean. The Maritime Silk Road, meanwhile, will link China’s coast to Europe through the South China Sea and the Indian Ocean in one route, and from China’s coast through the South China Sea to the South Pacific in the other. 2016 was the year when the global economic project got into full swing to give «prosperity for all» a chance.
It was the year when the so-called liberal world order was on shaky ground and retreating. In 2016, Europe continued to turn inward grappling with internal political challenges, violent extremism, and the migrant crisis. A host of facts and events in 2016 confirmed this trend, including the debates on Scottish independence, Brexit, and the Dutch referendum on Ukraine’s European Union membership, the internal divisions inside the EU, and Donald Trump elected in the US, to name a few.
The voices calling for revision of the European integration project were growing louder. In 2016, some called for convening a European constituent or foundational assembly to evaluate the situation and set new goals. Everybody agrees that things cannot continue as before. With anti-Russia sanctions doomed anyway, a more stable EU may benefit Moscow. After all, Russia is the third trading partner of the EU and the EU is the first trading partner of Russia.
2016 was the year of uncertainty to raise doubts about integration being a good thing. The European integration projects gives rise to a plethora of questions. Nobody knows what’s in store. Only when the effects of Brexit take shape and the results of elections in a number of leading countries, including Germany and Italy, are known, will it become possible to make predictions about the future of the Old Continent.
There were no breakthroughs in the Middle East but no new conflict erupted while the old ones lingered. The Islamic State group lost over a quarter of the territory in Iraq and Syria. It was retreating everywhere. There was a positive turn of events in Syria with Aleppo retaken long before the end of the year and Raqqa, the informal capital of the extremist group, surrounded by US-led forces. In 2016, the main pertinent actors dropped their «Assad must go» demand, with Russia, Turkey and Iran launching a crisis management effort in a new format with other parties invited to join.
The Islamic State was also defeated in Sirte, Libya. In 2016 it became evident that an international crisis management operation in that country is likely to take place with many actors involved. Any viable solution to the Middle East situation requires an international effort. Russia and the West may be facing a wide gap to divide them but joining together to tackle the region’s problems appears to be a logical step.
2016 was the year when the crisis of arms control and non-proliferation continued with no positive results and no prospects for the future. Hopes for a dialogue in this field have been largely frustrated.
All told, it was a year of dashed hopes and failed attempts to succeed. But it was not all doom and gloom. Global economy was slowly moving up, not down. There was no crisis and no downturn.
Some things were not in spotlight but they matter.
Two weeks before Brexit, the African Union announced a new single African passport that permits holders to enter any of the 54 AU member states without a visa – an interesting turn in African history while the European integration was hitting headlines.
Global terrorists were gradually losing ground. The Islamic State quietly started preparing its followers for the eventual collapse of the caliphate it proclaimed with great fanfare two years ago. Following the end of conflict in Colombia in 2016, all of the war in the world is now limitedto an arc that contains less than a sixth of the world’s population.
The relations between Russia and the West went on deteriorating, but contacts were maintained. At least three sessions of Russia-NATO Council were held. None of the parties said the relationship was suspended. And they confirmed their readiness for further talks.
With all its achievements and failures, it was a year of transition, a harbinger of new reality which had been neither foreseen, nor predicted. And there was a silver lining to make the world look forward to 2017 with hope and determination to overcome setbacks and snags on the way.
The ‘meme’ circulating the internet and among my personal friend group is that 2016 was something of an awful year.
Between a poisonous US election cycle, horrifying acts of senseless violence caused by refugees driving trucks in Europe, nightclub and other shootings, and high profile celebrity deaths it all conspired to create a sense of 2016 having been a bad year.
Truthfully, there’s a lot about which we should all be concerned, and I think that people’s sense of unease heading into 2017 is well-deserved, if sometimes misplaced.
What do I mean by that? Well, it is misplaced to be worried about symptoms instead of causes. The fever is worrying but it is not the cause of the illness.
At Peak Prosperity we are always and ever trying to determine what the root causes are, and burrowing around in the evidence to see if we can detect what is really happening and why.
As difficult as this is for some people to ingest, let alone digest, I view trump as the inevitable symptom of a nation that has for too long ignored its own people, especially those who are not in the protected classes. The populist uprisings all over the world are merely the beginning symptoms of a very long period of disruption that are precisely what we were speaking to when we said “The next twenty years are going to be completely unlike the last twenty years” way back in 2008.
The inevitable consequences of the confluence of many expensive trends all on this relatively tiny window of time (yes, I view 20 years as pretty short given what is likely to transpire during them) are going to be highly disruptive.
Some of those disruptions will be positively directed and some quite negative. Whether we rise to the challenges and make the best of what will come remains an open question, but I remain 100% convinced that each additional increment of time spent pretending that the prior direction remains the right direction represents wasted time and resources.
As bluntly as I can say it, anybody who found the level of disruptions on 2016 overwhelming is going to have a hard time navigating the future. The period of adjustment has only just begun.
2017 – A Sea of Exponentials
"The greatest shortcoming of the human race is our inability to understand the exponential function." ~ Al Bartlett
Perhaps the most vexing challenge remains how to more effectively communicate the various predicaments and problems we face.
It’s not having more numbers, or more data, that’s for sure. If numbers and data ‘worked then we’d have taken a very different path sometime back in the 1950’s.
As Admiral Hyman Rickover said in a speech to a group of doctors in 1957:
“I think no further elaboration is needed to demonstrate the significance of energy resources for our own future. Our civilization rests upon a technological base which requires enormous quantities of fossil fuels. What assurance do we then have that our energy needs will continue to be supplied by fossil fuels: The answer is – in the long run – none.
The earth is finite. Fossil fuels are not renewable. In this respect our energy base differs from that of all earlier civilizations. They could have maintained their energy supply by careful cultivation. We cannot.
Fuel that has been burned is gone forever. Fuel is even more evanescent than metals. Metals, too, are non-renewable resources threatened with ultimate extinction, but something can be salvaged from scrap. Fuel leaves no scrap and there is nothing man can do to rebuild exhausted fossil fuel reserves. They were created by solar energy 500 million years ago and took eons to grow to their present volume.
In the face of the basic fact that fossil fuel reserves are finite, the exact length of time these reserves will last is important in only one respect: the longer they last, the more time do we have, to invent ways of living off renewable or substitute energy sources and to adjust our economy to the vast changes which we can expect from such a shift. Fossil fuels resemble capital in the bank.
A prudent and responsible parent will use his capital sparingly in order to pass on to his children as much as possible of his inheritance. A selfish and irresponsible parent will squander it in riotous living and care not one whit how his offspring will fare.”
His logic was as irrefutably sound then as it is today. Such information was known at the highest levels throughout government and academia. But there was no, and continues to be no, sustained and well-funded efforts to grapple with the basic dilemma posed by increasing population as dramatically as we have all the while living on, literally eating, fossil fuels to encourage that rapid population growth.
"Can you think of any problem in any area of human endeavor on any scale, from microscopic to global, whose long-term solution is in any demonstrable way aided, assisted, or advanced by further increases in population, locally, nationally, or globally?" ~ Al Bartlett
The American Museum of Natural History recently put out an amazingly good and informative video on human population growth over time.
As they noted, it took 200,000 years for humans to reach the first billion, and only 200 years more from that moment to reach 7 billion.
Here it is – try hard not to notice the similarity between the clicks denoting each new million people and the sound of a Geiger counter:
If you overlaid human’s exploitation of fossil fuels the curves at the end overlay to an astonishing degree. Not astonishing because it’s some sort of mental leap requiring acute intellectual agility, but because of how little attention it receives practically anywhere in the halls of power or academia.
Again, Hyman Rickover linked the population and economy firmly to energy and prosperity way back in 1957. He was extraordinarily influential. President Carter took a few important steps but then something happened. The idea of limits and thoughtful planning gave way to something else… a headlong rush into endless growth and a profound, almost pathological aversion to facing the simple math that says “exponential growth on a finite planet is impossible (and irresponsible).”
The rapidity of population growth has not given us enough time to readjust our thinking. I suggest that this is a good time to think soberly about our responsibilities to our descendants – those who will ring out the Fossil Fuel Age. ~ Hyman Rickover, 1957
The predicament we face is really quite profound. I submit to you that people know this in their guts and the fact that they do goes a long way towards describing the feeling dread many people report they are carrying here at the start of 2017 and cannot seem to shake.
And of course they are. Not having a plan for how to even feed 7.4 billion people, heading to 9 or 10 billion people, without massive fossil fuel calorie subsidies is a troubling thought. If it’s not troubling, then more thinking needs to be applied.
Here’s the one chart that should sober everyone up.
A complex chart, so let me break it down. The top line is the assumed rate of growth in energy use given the amount of economic growth that the world expects/desires/wants and that the financial system needs. Without that growth our entire financial system will become unstable and probably collapse. Not the smartest system to saddle ourselves with, but there you have it – it’s either expanding or collapsing (or threatening to do so).
With a functioning economy, all of our high-tech dreams can come to pass. Without a functioning economy, you can forget about them. It’s binary. If you doubt this, just go visit Greece and check out their high tech industries, new product development, and public investment and deployment of new technology and infrastructure. Or lack thereof, as is actually the case. Ditto for Venezuela.
So we care about that top line continuing to grow smoothly, but as I’ve noted extensively, one of the most linear and durable relationships of them all is that between economic growth and growth in energy consumption. If you want more economic growth, you are, by definition, asking for more energy growth. That’s what the top black line is charting.
The bottom blue line in the above chart is the total amount of primary energy that fossil fuels will be able to deliver. As you can see, someday, as Admiral Rickover noted, those finite fossil fuels cannot deliver any more energy, they plateau for about a decades, and then slowly disappear from the human experiment.
I have no doubts that the gap between the top black line and the bottom blue line can be reasonably filled by alternative energy sources until about 2030. Solar, wind and the like, can almost certainly fill the void. But I have severe doubts about the next 25 years, where the equivalent of 100% of the 2030 fossil fuel energy will have to be replaced…by other means.
First, humanity has never transitioned from one energy source to another in anything less than 50 years. And that was always in the context of moving from a lower density (worse) energy source to a higher energy density (better) one. Solar and wind are far less dense than oil. Moving from wood to coal was easy and made sense because coal is a superior energy source compared to wood.
To drive this point home, here’s a fascinating map of world shipping traffic. Stare at the number of dots plying the waters (each day is ~ 4 seconds of your time):
Do you know how important shipping is to the world economy? It’s enormously important. Do you know how many of those dots are currently powered by electricity? Zero.
Fast forward to 2030 when humanity has to figure out how to begin running at least half of those dots by other means over the next 25 years, and suddenly (I hope) the scale of the issue begins to take shape. Wishful thinking isn’t going to cut it.
Same observations but for air travel:
Again, the number of planes in the above map running on electricity is zero, unless the map coincidentally happened to encompass the few days when the one solar plane in the world trundled across the screen slowly with a single person on board.
And yet here we are, in the finally days of 2016, without any obvious governmental attention to these important, vital matters. Worse, the central banks are doing everything possible to deny that anything matters at all, besides highly elevated and rising financial asset prices.
These are really big issues and the question, as always, is what on earth is any of us to do about any of this?
How to Have A Positive Impact
Here’s where we need your help. Of course we strongly advocate that you get your own resilience plans in order first and attend to those before anything else.
For some this will be a lengthy process, for others much shorter or already mostly done or in progress.
It is through our own examples that we have the best chance of changing others. If we lead, some will follow. Indeed, unless or until we change ourselves, there’s no point at all in trying to reach others to convince them to change.
Next, we need help reaching more people and organizations, and the more influential they are the better. As Malcom Gladwell wrote in his book The Tipping Point, the moment of critical social mass happens not when 51% of people are activated, but when the right 8% get involved.
Adam and I have a very aggressive plan for 2017 that will include lots more efforts at expanding the reach of our message. We need your help.
Finally, my personal themes for 2017 is about how to write better stories and to use narratives to convey my points more concisely and more powerfully. I have a stack of books on my bedside table that are about storytelling, persuasion, selling, and the psychology of decision-making. I need to learn more, and quickly!
To this end, we’re going to be using more video, and joining forces with other organizations that have reach and will afford the possibility to reach new audiences. The UN and Glenn Beck are two examples from 2016 that show just how agnostic we are in terms of trying new things. What matters is maximizing the impact we can bring to bear.
An important part of this storytelling will be elevating the positive things that are happening to greater prominence. People need to know what works and what is working. Problem and predicament definition alone only works for a very small sub-set of the overall population. Everybody else needs to have a direction to head, a model to follow, and a vision that comports with reality.
So I’d like your help in identifying and promoting these positive developments. While I will be the first to jump up and down if/when we solve the battery problem, which will change everything, it also need to be said that there are already a thousand things we have in and that we are not using or doing already, which brings us back to the storytelling and narrative angle.
It is my view that if we had the right story in place, we’d already be using solar thermal to heat water for every building on earth. The reason we don’t has nothing to do with economics or rational arguments. It is as simple and as difficult as having the wrong stories in place which all summarize to We don’t have to do this, so we’re not going to.
I have some really big ideas in my head for how to go about recrafting our narratives and getting people involved in and engaged with charting their own futures. I don’t want to jinx any of them, so more on those later.
As much as we accomplished in 2016, there was also a sense of treading water. Brand new bubbly highs in the stock market blunted many people’s sense of urgency, while the various populist movements took a lot of energy from a lot of people that would otherwise have been directed at the sorts of issues outlined above.
The profound lack of investment in oil development will have a future impact on supplies so look for a big upside movement in oil prices somewhere between 2018 and 2021 (with war/conflict in the Middle East or with Russia being an immediate upside catalyst that could happen at any moment).
Those high oil prices will shock the heck out an over-leveraged system with well over $230 trillion of outstanding debt. All of that and more is coming and there’s nothing to be done about it except carry on as best and as with as much daily joy as we can.
The social and political divisiveness that has appeared and seems destined to increase is a certified tragedy because we need to work together on these many issues and predicaments. We need the opposite of divisiveness.
With a shared understanding of the problems, we have a chance to rally our resources around effective responses and solutions where those may exist.
I remain deeply grateful to be able to serve in this role, to have your support as I use my unusual gift as a translator (of complex ideas) to help create a world worth inheriting. At the same time, I am aware that I have been at this for ten years now, and my wish that more progress had been made.
This is going to be a pivotal year, and I want to inspire and challenge this community to find new ways to work together to help more people understand what’s truly at stake – the future prosperity of the entire world.
Thank you for your help in the past, and the future.