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Gene Ellis

Global Coal Use Predicted to Keep Growing - NYTimes.com - 0 views

www.nytimes.com/...predicted-to-keep-growing.html

coal

shared by Gene Ellis on 16 Dec 13 - No Cached
  • Global Coal Use Predicted to Keep Growing
  • Gene Ellis on 16 Dec 13
     
    Global Coal Use Predicted to Keep Growing
  • Gene Ellis on 09 Jan 14
     
    Global Coal Use Predicted to Keep Growing
Gene Ellis

U.S. Ports See Costly Delays as Cargo Ships,Volumes Grow - WSJ - 0 views

www.wsj.com/...-ships-volumes-grow-1430340113

u s ports cargo

shared by Gene Ellis on 06 May 15 - No Cached
  • U.S. Ports See Costly Delays as Cargo Ships, Volumes Grow
Gene Ellis

As Robots Grow Smarter, American Workers Struggle to Keep Up - NYTimes.com - 0 views

www.nytimes.com/...rkers-struggle-to-keep-up.html

shared by Gene Ellis on 16 Dec 14 - No Cached
  • As Robots Grow Smarter, American Workers Struggle to Keep Up
  • Erik Brynjolfsson, an economist at M.I.T., said, “This is the biggest challenge of our society for the next decade.”
  • Americans between the ages of 55 and 64 are among the most skilled in the world, according to a recent report from the Organization for Economic Cooperation and Development. Younger Americans are closer to average among the residents of rich countries, and below average by some measures.
  • ...5 more annotations...
  • Self-driving vehicles are an example of the crosscurrents.
  • Ad sales agents and pilots are two jobs that the Bureau of Labor Statistics projects will decline in number over the next decade. Flying a plane is largely automated today and will become more so.
  • Telemarketers are among those most at risk
  • More than 16 percent of men between the ages of 25 and 54 are not working, up from 5 percent in the late 1960s; 30 percent of women in this age group are not working, up from 25 percent in the late 1990s.
  • “The answer is surely not to try to stop technical change,” Mr. Summers said, “but the answer is not to just suppose that everything’s going to be O.K. because the magic of the market will assure that’s true.”
Gene Ellis

How GCC Smelters Can Continue Growing Profitably - Paper - A.T. Kearney - 1 views

www.atkearney.be/...10192

shared by Gene Ellis on 25 Apr 14 - No Cached
  • How GCC Smelters Can Continue Growing Profitably
Gene Ellis

Treat debt with caution: SARB - Times LIVE - 0 views

www.timeslive.co.za/...treat-debt-with-caution-sarb

shared by Gene Ellis on 05 Nov 12 - No Cached
  • "Be extremely cautious that you don't take more than you can service. Try to issue liabilities that involve an element of risk sharing between the creditor and the debtor," he said.
  • "As for international contracts, be very careful that you treat the business cycle symmetrically. If you stimulate and borrow when the economy goes down then you must tighten... when the economy grows."
  • He said governments of developing nations needed to be innovative in borrowing contracts they devised to grow their infrastructure.
  • ...3 more annotations...
  • "Give, for instance, a 50 percent equity stake in some infrastructure project so that you share the risks as well as the returns. There you don't have the bankruptcy threats and the default threats which come with debt contracts."
  • Buiter urged South Africans and the rest of the continent to "wear helmets for the rest of the decade". "The world is going to be a very dangerous place for the next 10 years, with advanced economies still needing about a decade, if you count the US and Japan, to get out of the debt problem that they got into," he said.
  • "So there is going to be a fallout for developing economies like South Africa."
Gene Ellis

George Soros: how to save the EU from the euro crisis - the speech in full | Business |... - 0 views

www.guardian.co.uk/...ave-eu-from-euro-crisis-speech

shared by Gene Ellis on 09 Apr 13 - No Cached
  • The crisis has also transformed the European Union into something radically different from what was originally intended. The EU was meant to be a voluntary association of equal states but the crisis has turned it into a hierarchy with Germany and other creditors in charge and the heavily indebted countries relegated to second-class status. While in theory Germany cannot dictate policy, in practice no policy can be proposed without obtaining Germany's permission first.
  • Italy now has a majority opposed to the euro and the trend is likely to grow. There is now a real danger that the euro crisis may end up destroying the European Union.
  • The answer to the first question is extremely complicated because the euro crisis is extremely complex. It has both a political and a financial dimension. And the financial dimension can be divided into at least three components: a sovereign debt crisis and a banking crisis, as well as divergences in competitiveness
  • ...37 more annotations...
  • The crisis is almost entirely self-inflicted. It has the quality of a nightmare.
  • My interpretation of the euro crisis is very different from the views prevailing in Germany. I hope that by offering you a different perspective I may get you to reconsider your position before more damage is done. That is my goal in coming here.
  • I regarded the European Union as the embodiment of an open society – a voluntary association of equal states who surrendered part of their sovereignty for the common good.
  • The process of integration was spearheaded by a small group of far sighted statesmen who recognised that perfection was unattainable and practiced what Karl Popper called piecemeal social engineering. They set themselves limited objectives and firm timelines and then mobilised the political will for a small step forward, knowing full well that when they achieved it, its inadequacy would become apparent and require a further step.
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Excellent point!
  • Unfortunately, the Maastricht treaty was fundamentally flawed. The architects of the euro recognised that it was an incomplete construct: a currency union without a political union. The architects had reason to believe, however, that when the need arose, the political will to take the next step forward could be mobilized. After all, that was how the process of integration had worked until then.
  • For instance, the Maastricht Treaty took it for granted that only the public sector could produce chronic deficits because the private sector would always correct its own excesses. The financial crisis of 2007-8 proved that wrong.
  • When the Soviet empire started to disintegrate, Germany's leaders realized that reunification was possible only in the context of a more united Europe and they were prepared to make considerable sacrifices to achieve it. When it came to bargaining, they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement.
  • The financial crisis also revealed a near fatal defect in the construction of the euro: by creating an independent central bank, member countries became indebted in a currency they did not control. This exposed them to the risk of default.
  • Developed countries have no reason to default; they can always print money. Their currency may depreciate in value, but the risk of default is practically nonexistent. By contrast, less developed countries that have to borrow in a foreign currency run the risk of default. To make matters worse, financial markets can actually drive such countries into default through bear raids. The risk of default relegated some member countries to the status of a third world country that became over-indebted in a foreign currency. 
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Again, another excellent point!
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Not quite... Maggie Thatcher, a Conservative; and Gordon Brown, of Labour, both recognized this possible loss of sovereignty (and economic policy weapons they might use to keep the UK afloat), and refused to join the euro.
  • The emphasis placed on sovereign credit revealed the hitherto ignored feature of the euro, namely that by creating an independent central bank the euro member countries signed away part of their sovereign status.
  • Only at the end of 2009, when the extent of the Greek deficit was revealed, did the financial markets realize that a member country could actually default. But then the markets raised the risk premiums on the weaker countries with a vengeance.
  • Then the IMF and the international banking authorities saved the international banking system by lending just enough money to the heavily indebted countries to enable them to avoid default but at the cost of pushing them into a lasting depression. Latin America suffered a lost decade.
  • In effect, however, the euro had turned their government bonds into bonds of third world countries that carry the risk of default.
  • In retrospect, that was the root cause of the euro crisis.
  • The burden of responsibility falls mainly on Germany. The Bundesbank helped design the blueprint for the euro whose defects put Germany into the driver's seat.
  • he fact that Greece blatantly broke the rules has helped to support this attitude. But other countries like Spain and Ireland had played by the rules;
  • the misfortunes of the heavily indebted countries are largely caused by the rules that govern the euro.
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Well, yes, but this is an extremely big point.  If, instead of convergence, we continue to see growth patterns growing apart, what then?
  • Germany did not seek the dominant position into which it has been thrust and it is unwilling to accept the obligations and liabilities that go with it.
  • Austerity doesn't work.
  • As soon as the pressure from the financial markets abated, Germany started to whittle down the promises it had made at the height of the crisis.
  • What happened in Cyprus undermined the business model of European banks, which relies heavily on deposits. Until now the authorities went out of their way to protect depositors
  • Banks will have to pay risk premiums that will fall more heavily on weaker banks and the banks of weaker countries. The insidious link between the cost of sovereign debt and bank debt will be reinforced.
  • In this context the German word "Schuld" plays a key role. As you know it means both debt and responsibility or guilt.
  • If countries that abide by the fiscal compact were allowed to convert their entire existing stock of government debt into eurobonds, the positive impact would be little short of the miraculous.
  • Only the divergences in competitiveness would remain unresolved.
  • Germany is opposed to eurobonds on the grounds that once they are introduced there can be no assurance that the so-called periphery countries would not break the rules once again. I believe these fears are misplaced.
  • Losing the privilege of issuing eurobonds and having to pay stiff risk premiums would be a powerful inducement to stay in compliance.
  • There are also widespread fears that eurobonds would ruin Germany's credit rating. eurobonds are often compared with the Marshall Plan.
  • It is up to Germany to decide whether it is willing to authorise eurobonds or not. But it has no right to prevent the heavily indebted countries from escaping their misery by banding together and issuing eurobonds. In other words, if Germany is opposed to eurobonds it should consider leaving the euro and letting the others introduce them.
  • Individual countries would still need to undertake structural reforms. Those that fail to do so would turn into permanent pockets of poverty and dependency similar to the ones that persist in many rich countries.
  • They would survive on limited support from European Structural Funds and remittances
  • Second, the European Union also needs a banking union and eventually a political union.
  • If Germany left, the euro would depreciate. The debtor countries would regain their competitiveness. Their debt would diminish in real terms and, if they issued eurobonds, the threat of default would disappear. 
Gene Ellis

Investors Seek Yields in Europe, but Analysts Warn of Risk - NYTimes.com - 0 views

www.nytimes.com/...as-its-economies-languish.html

investors europe analysts

shared by Gene Ellis on 22 Jan 14 - No Cached
  • Investors Seek Yields in Europe, but Analysts Warn of Risk
  • Once again, foreign investors are piling into the government bonds of Ireland, Spain and Portugal — countries that got into such debt trouble that they required bailouts. Now these countries are able to sell their bonds at lower interest rates than they have seen in years, renewing hope that Europe has turned a corner.
  • Claus Vistesen, the head of research at Variant Perception, a London-based economic research group, sees the ratio of debt to economic output as a continuing threat to a euro zone recovery.“People think growth is coming back,” Mr. Vistesen said, “but at the end of the day, debt is still going up.”
  • ...6 more annotations...
  • Despite the suddenly easier terms under which Ireland and other recovering euro zone countries can borrow, the fact remains: These countries are still mired in stagnation.
    • Gene Ellis
      Gene Ellis on 22 Jan 14
       
      Do the maths here:  1600 a week jobs being lost equals, what, just over 80,000 jobs a year?  1200 jobs a week now being created, that's what, a little over 60,000 a year?  We've had 5-6 years of recession, so how many years to get back to where we were?  And, of course, the population was growing...
  • “Sixteen hundred jobs a week were being lost before we took office; we’re now in a position where 1,200 jobs a week are being created, and our consumer confidence numbers have been steadily growing.”
  • For the euro zone at large, though, a step back often follows each step forward. France and Italy, the bloc’s second- and third-largest economies, are increasingly seen as the latest sick men of the Continent. Even Germany, the bloc’s powerhouse, grew only feebly last year, by 0.4 percent.
  • In Ireland, more than 80 percent of the investment came from abroad, with banks and pension funds making up 37 percent of the offering and fund managers about half.
  • Mr. Kirkegaard cited “the hunt for yield.”
Gene Ellis

Nouriel Roubini explains why many previously fast-growing economies suddenly find thems... - 0 views

www.project-syndicate.org/...selves-facing-strong-headwinds

shared by Gene Ellis on 05 Feb 14 - No Cached
  • Nonetheless, the threat of a full-fledged currency, sovereign-debt, and banking crisis remains low, even in the Fragile Five, for several reasons
  • All have flexible exchange rates,
  • a large war chest of reserves
  • ...5 more annotations...
  • and fewer currency mismatches
  • Many also have sounder banking systems, while their public and private debt ratios, though rising, are still low
  • But the short-run policy tradeoffs that many of these countries face – damned if they tighten monetary and fiscal policy fast enough, and damned if they do not – remain ugly.
  • As it is widely known, transfer pricing is the major tool for corporate tax avoidance, and it creates current account deficit when a multinational company receives from its own branch
  • abroad, the previously transferred own profit, as a debt.
Gene Ellis

China's Hurdle to Fast Action on Climate Change - NYTimes.com - 0 views

www.nytimes.com/...ct-fast-on-climate-change.html

shared by Gene Ellis on 18 Feb 15 - No Cached
  • China’s Hurdle to Fast Action on Climate Change
  • Any hopes that American commitments to cut carbon emissions will have a decisive impact on climate change rely on the assumption that China will reciprocate and deliver aggressive emission cuts of its own.
  • Fast economic growth in China and India is projected to fuel a substantial increase in carbon pollution over coming decades, despite big improvements in energy efficiency and the decarbonization of their energy supply
  • ...6 more annotations...
  • The country accounts for over a quarter of global greenhouse gas emissions.
  • Over the next 20 years, China’s CO2 emissions will grow by an amount roughly equal to the United States’ total emissions today,
  • Even assuming that China’s population does not grow at all over the next 30 years, that the energy efficiency of its economy increases at a faster pace than most developed and developing countries and that it manages to decarbonize its energy sources faster than pretty much anybody else, China would still be emitting a lot more carbon in 2040 than it does today, according to E.I.A. calculations.
  • Can the United States or anybody else do anything to speed China down a low-carbon path?
  • The latest report from the United Nations Intergovernmental Panel on Climate Change, issued in April, suggested several ways to allot responsibilities. If one starts counting in the 18th century and counts only emissions from industry and energy generation, the United States is responsible for more than a quarter of all greenhouse gases that humanity has put into the air. China, by contrast, is responsible for 10 percent.But if one starts counting in 1990, when the world first became aware that CO2 was a problem, and includes greenhouse gases emitted from changes in land use, the United States is responsible for only 18 percent, and China’s share rises to 15 percent. Rich and poor countries, unsurprisingly, disagree on the proper measure. Photo
  • Not everybody will meet their Copenhagen pledges. Japan, which unplugged its nuclear energy after the disaster at the Fukushima nuclear power plant, will fall behind. So will Canada and Australia, whose new conservative governments have lost interest in the pledges of their predecessors.
Gene Ellis

Dani Rodrik shows why Sub-Saharan Africa's impressive economic performance is not susta... - 0 views

www.project-syndicate.org/...performance-is-not-sustainable

economics africa

shared by Gene Ellis on 27 Dec 13 - No Cached
  • Africa’s Structural Transformation Challenge
  • As researchers at the African Center for Economic Transformation in Accra, Ghana, put it, the continent is “growing rapidly, transforming slowly.”
  • Fewer than 10% of African workers find jobs in manufacturing, and among those only a tiny fraction – as low as one-tenth – are employed in modern, formal firms with adequate technology. Distressingly, there has been very little improvement in this regard, despite high growth rates. In fact, Sub-Saharan Africa is less industrialized today than it was in the 1980’s. Private investment in modern industries, especially non-resource tradables, has not increased, and remains too low to sustain structural transformation.
  • ...4 more annotations...
  • As in all developing countries, farmers in Africa are flocking to the cities. And yet, as a recent study from the Groningen Growth and Development Center shows, rural migrants do not end up in modern manufacturing industries, as they did in East Asia, but in services such as retail trade and distribution. Though such services have higher productivity than much of agriculture, they are not technologically dynamic in Africa
  • Xinshen Diao of the International Food Policy Research Institute has shown that this growth was led by non-tradable services, in particular construction, transport, and hotels and restaurants. The public sector dominates investment, and the bulk of public investment is financed by foreign grants. Foreign aid has caused the real exchange rate to appreciate,
  • What Rwanda and other African countries lack are the modern, tradable industries that can turn the potential into reality by acting as the domestic engine of productivity growth.
  • Studies show that very few microenterprises grow beyond informality, just as the bulk of successful established firms do not start out as small, informal enterprises.
Gene Ellis

Monarch Migration Plunges to Lowest Level in Decades - NYTimes.com - 0 views

www.nytimes.com/...o-lowest-level-in-decades.html

monarch migration lowest level decades

shared by Gene Ellis on 14 Mar 13 - No Cached
  • But an equally alarming source of the decline, both Mr. Taylor and Mr. Vidal said, is the explosive increase in American farmland planted in soybean and corn genetically modified to tolerate herbicides. The American Midwest’s corn belt is a critical feeding ground for monarchs, which once found a ready source of milkweed growing between the rows of millions of acres of soybean and corn. But the ubiquitous use of herbicide-tolerant crops has enabled farmers to wipe out the milkweed, and with it much of the butterflies’ food supply.
  • Gene Ellis on 14 Mar 13
     
    unintended consequences of GM crops
Gene Ellis

Emerging Europe's Deleveraging Dilemma by Erik Berglof and Božidar Đelić - Pr... - 0 views

www.project-syndicate.org/...-erik-berglof-and-bo-idar--eli

emerging europe dilemma erik project syndicate eli

shared by Gene Ellis on 01 Jan 13 - No Cached
  • Expansion was, for lack of other options, financed largely through short-term loans.
  • since the onset of the global financial crisis, eurozone-based banks’ subsidiaries in emerging Europe have been reducing their exposure to the region. In 2009-2010, the European Bank Coordination Initiative – known informally as the “Vienna Initiative” – helped to avert a systemic crisis in developing Europe by stopping foreign-owned parent banks from staging a catastrophic stampede to the exits.CommentsView/Create comment on this paragraphBut, in the second half of 2011, the eurozone-based parent banks that dominate emerging Europe’s banking sector came under renewed pressure to deleverage. Many are now radically changing their business models to reduce risk.
  • Over the last year, funding corresponding to 4% of the region’s GDP – and, in some countries, as much as 15% of GDP – has been withdrawn. Bank subsidiaries will increasingly have to finance local lending with local deposits and other local funding.
  • ...4 more annotations...
  • excessive and chaotic deleveraging by lenders to emerging Europe – and the ensuing credit crunch – would destabilize this economically and institutionally fragile region.
  • View/Create comment on this paragraphFor Tigar, deleveraging has meant that banks that had pursued its business only a couple of years ago have suddenly cut lending – even though the company never missed a debt payment. Previous loans came due, while cash-flow needs grew. Despite its good operating margins, growing markets, and prime international clients, the company experienced a drop in liquidity, requiring serious balance-sheet restructuring.
  • Furthermore, collateral – especially real-estate assets – will continue to be downgraded.
  • Indeed, several Western financial groups are considering partial or complete exits from the region – without any clear strategic replacement in sight.
Gene Ellis

The euro crisis: The non-puzzle of peripheral pain | The Economist - 0 views

www.economist.com/...euro-crisis-0

shared by Gene Ellis on 18 Apr 13 - No Cached
  • Mystery mostly solved, then; the rich periphery's riches relative to Germany were largely a short-run phenomenon driven by a dramatic short-run divergence in house price trends.
  • Investors who bet that productivity growth would be much faster in the south were wrong.* All the prices and wages set on the basis of the expectation of faster productivity growth were correspondingly wrong and needed to adjust. Real effective exchange rates were badly out of alignment.
  • Two things began happening in the euro zone in 2007. Growth in the number of euros spent every year began slowing, and the distribution of euro spending within the euro area began shifting back northward.
  • ...11 more annotations...
  • The picture is one in which there are many fewer euros floating around the euro area than markets expected a half decade ago, and the distribution of those euros is moving northward.
  • It seems reasonable to argue that the distributional shift needed to occur, given the actual productivity performance.  The overall slowdown in euro spending growth, however, looks like an unnecessary and painful complication to adjustment.
  • This has all been the result of the commitment to keep just one euro. But that commitment is painful, and the alternative—more than one euro—is looking more attractive.
  • Where prices were rigid, as in goods and labour markets, fewer euros meant slow disinflation but rapid contraction in output and a big rise in unemployment.
  • Where prices were more flexible, as in asset markets, price adjustment was quick. Over the past two years, Spanish equities have fallen 24%, while German equities are up 8%.
  • Since 2010, Spanish home prices have dropped over 20%, while German home prices are up a smidge.
  • If there had been no single currency, the northward capital flight would have depreciated peripheral currencies. Had the periphery borrowed in its own currency, that would have imposed losses on its foreign creditors while also boosting its export industry. Had peripheral economies instead borrowed in dollars or deutschmarks their debt burdens would have ballooned with depreciation, potentially pushing banks and sovereigns into default—but the depreciation boost to competitiveness would have remained. Either way, the depreciation of the currency would effectively shrink the value of wealth in the periphery.
  • The northward euro shift had two nasty effects, then: it shrank asset values while also (via wage rigidity) creating substantial unemployment.
  • This threatened to accelerate into a full-scale run and collapse until the ECB intervened.
  • as markets observed the periphery's reduced ability to pay off its debts, they moved their euros northward even faster
  • For the periphery to raise its external surplus (necessary in order to service its large and growing debts) it must rely much more on import compression than on export growth.
Gene Ellis

Op-Ed Columnist - The Euro Trap - NYTimes.com - 0 views

www.nytimes.com/...30krugman.html

krugman euro trap nytimes

shared by Gene Ellis on 24 Apr 13 - Cached
  • The fact is that three years ago none of the countries now in or near crisis seemed to be in deep fiscal trouble.
  • And all of the countries were attracting large inflows of foreign capital, largely because markets believed that membership in the euro zone made Greek, Portuguese and Spanish bonds safe investments.
  • Then came the global financial crisis. Those inflows of capital dried up; revenues plunged and deficits soared; and membership in the euro, which had encouraged markets to love the crisis countries not wisely but too well, turned into a trap.
  • ...5 more annotations...
  • During the years of easy money, wages and prices in the crisis countries rose much faster than in the rest of Europe. Now that the money is no longer rolling in, those countries need to get costs back in line.
  • Now that Greece and Germany share the same currency, however, the only way to reduce Greek relative costs is through some combination of German inflation and Greek deflation. And since Germany won’t accept inflation, deflation it is.
  • The problem is that deflation — falling wages and prices — is always and everywhere a deeply painful process. It invariably involves a prolonged slump with high unemployment. And it also aggravates debt problems, both public and private, because incomes fall while the debt burden doesn’t.
  • Earlier this week, when it downgraded Greek debt, Standard & Poor’s suggested that the euro value of Greek G.D.P. may not return to its 2008 level until 2017, meaning that Greece has no hope of growing out of its troubles.
  • Until recently, most analysts, myself included, considered a euro breakup basically impossible, since any government that even hinted that it was considering leaving the euro would be inviting a catastrophic run on its banks. But if the crisis countries are forced into default, they’ll probably face severe bank runs anyway, forcing them into emergency measures like temporary restrictions on bank withdrawals. This would open the door to euro exit.
Gene Ellis

Op-Ed Columnist - Bubbles and the Banks - NYTimes.com - 0 views

www.nytimes.com/...08krugman.html

Krugman banks

shared by Gene Ellis on 24 Apr 13 - Cached
  • Bear in mind that the implosion of the 1990s stock bubble, while nasty — households took a $5 trillion hit — didn’t provoke a financial crisis. So what was different about the housing bubble that followed?
  • The short answer is that while the stock bubble created a lot of risk, that risk was fairly widely diffused across the economy. By contrast, the risks created by the housing bubble were strongly concentrated in the financial sector. As a result, the collapse of the housing bubble threatened to bring down the nation’s banks. And banks play a special role in the economy. If they can’t function, the wheels of commerce as a whole grind to a halt.
  • Why did the bankers take on so much risk? Because it was in their self-interest to do so.
  • ...2 more annotations...
  • Of course, that conflict of interest is the reason we have bank regulation. But in the years before the crisis, the rules were relaxed — and, even more important, regulators failed to expand the rules to cover the growing “shadow” banking system, consisting of institutions like Lehman Brothers that performed banklike functions even though they didn’t offer conventional bank deposits.
  • And here’s the thing: Since that aid came with few strings — in particular, no major banks were nationalized even though some clearly wouldn’t have survived without government help — there’s every incentive for bankers to engage in a repeat performance.
Gene Ellis

Read, I, Pencil | Library of Economics and Liberty - 0 views

www.econlib.org/...rdPncl1.html

shared by Gene Ellis on 26 Apr 13 - Cached
  • Simple? Yet, not a single person on the face of this earth knows how to make me.
  • Not much meets the eye—there's some wood, lacquer, the printed labeling, graphite lead, a bit of metal, and an eraser.
  • a cedar of straight grain that grows in Northern California and Oregon
  • ...16 more annotations...
  • The logs are shipped to a mill in San Leandro, California.
  • The slats are waxed and kiln dried again.
  • The cedar logs are cut into small, pencil-length slats less than one-fourth of an inch in thickness. These are kiln dried and then tinted for the same reason women put rouge on their faces.
  • Don't overlook the ancestors present and distant who have a hand in transporting sixty carloads of slats across the nation.
  • Once in the pencil factory—$4,000,000 in machinery and building, all capital accumulated by thrifty and saving parents of mine—each slat is given eight grooves by a complex machine, after which another machine lays leads in every other slat, applies glue, and places another slat atop—a lead sandwich, so to speak. Seven brothers and I are mechanically carved from this "wood-clinched" sandwich.
  • The graphite is mined in Ceylon.
  • The graphite is mixed with clay from Mississippi in which ammonium hydroxide is used in the refining process. Then wetting agents are added such as sulfonated tallow—animal fats chemically reacted with sulfuric acid. After passing through numerous machines, the mixture finally appears as endless extrusions—as from a sausage grinder-cut to size, dried, and baked for several hours at 1,850 degrees Fahrenheit. To increase their strength and smoothness the leads are then treated with a hot mixture which includes candelilla wax from Mexico, paraffin wax, and hydrogenated natural fats.
  • My cedar receives six coats of lacquer. Do you know all the ingredients of lacquer? Who would think that the growers of castor beans and the refiners of castor oil are a part of it? They are.
  • Observe the labeling. That's a film formed by applying heat to carbon black mixed with resins. How do you make resins and what, pray, is carbon black?
  • My bit of metal—the ferrule—is brass. Think of all the persons who mine zinc and copper and those who have the skills to make shiny sheet brass from these products of nature. Those black rings on my ferrule are black nickel. What is black nickel and how is it applied? The complete story of why the center of my ferrule has no black nickel on it would take pages to explain. RP.18
  • An ingredient called "factice" is what does the erasing. It is a rubber-like product made by reacting rape-seed oil from the Dutch East Indies with sulfur chloride. Rubber, contrary to the common notion, is only for binding purposes. Then, too, there are numerous vulcanizing and accelerating agents. The pumice comes from Italy; and the pigment which gives "the plug" its color is cadmium sulfide
  • Actually, millions of human beings have had a hand in my creation, no one of whom even knows more than a very few of the others.
  • There isn't a single person in all these millions, including the president of the pencil company, who contributes more than a tiny, infinitesimal bit of know-how.
  • Here is an astounding fact: Neither the worker in the oil field nor the chemist nor the digger of graphite or clay nor any who mans or makes the ships or trains or trucks nor the one who runs the machine that does the knurling on my bit of metal nor the president of the company performs his singular task because he wants me.
  • There is a fact still more astounding: the absence of a master mind, of anyone dictating or forcibly directing these countless actions which bring me into being. No trace of such a person can be found.
  • For, if one is aware that these know-hows will naturally, yes, automatically, arrange themselves into creative and productive patterns in response to human necessity and demand—that is, in the absence of governmental or any other coercive masterminding—then one will possess an absolutely essential ingredient for freedom: a faith in free people. Freedom is impossible without this faith.
  • Gene Ellis on 26 Apr 13
     
    " Articles EconLog EconTalk Books Encyclopedia Guides Search "I, Pencil: My Family Tree as told to Leonard E. Read" A selected essay reprint Home | Books | Read | Selected essay reprint Read, Leonard E. (1898-1983) BIO Display paragraphs in this essay containing: Search essay Editor/Trans. First Pub. Date Dec. 1958 Publisher/Edition Irvington-on-Hudson, NY: The Foundation for Economic Education, Inc. Pub. Date 1999 Comments Pamphlet PRINT EMAIL CITE COPYRIGHT Start PREVIOUS 4 of 5 NEXT End "
Gene Ellis

The Truth about Fracking - Kevin D. Williamson - National Review Online - 0 views

www.nationalreview.com/...ut-fracking-kevin-d-williamson

shared by Gene Ellis on 22 Jan 13 - No Cached
  • The water makes the fractures, and the sand keeps them open. There’s some other stuff in that fracking blend, too: biocides, for one thing, not very different from what’s in your swimming pool, to keep bacteria and algae and other gunk from growing in the water and clogging up the works. There are also some friction reducers, because water and sand moving at speed can produce a lot of wear and tear (cf. the Grand Canyon), and the occasional jolt of 7 percent hydrochloric acid solution for boring out holes in the concrete. The mix is 99+ percent water and sand, and the rest of the stuff is mostly run-of-the-mill industrial chemicals (those friction-reducers use a polymer that also is used in children’s toys, for example). Real concerns, but not exactly an insurmountable environmental challenge.
Gene Ellis

Tomato Imports Deal Reached by U.S. and Mexico - NYTimes.com - 0 views

www.nytimes.com/...ch-deal-on-tomato-imports.html

tomato imports deal u s mexico

shared by Gene Ellis on 04 Feb 13 - No Cached
  • The agreement, reached late Saturday, raises the minimum sales price for Mexican tomatoes in the United States, aims to strengthen compliance and enforcement, and increases the types of tomatoes governed by the bilateral pact to four from one.
  • “The draft agreement raises reference prices substantially, in some cases more than double the current reference price for certain products,
  • Florida growers contended it set the minimum price of Mexican tomatoes so low that the Florida growers could not compete.
  • ...5 more annotations...
  • “Even though no dumping or injury to the U.S. industry was demonstrated by our competitors,
  • The new agreement covers all fresh and chilled tomatoes, excluding those intended for use in processing like canning and dehydrating, and in juices, sauces and purées.
  • It raises the basic floor price for winter tomatoes to 31 cents a pound from 21.69 cents — higher than the price the Mexicans were proposing in October — and establishes even higher prices for specialty tomatoes and tomatoes grown in controlled environments. The Mexicans have invested billions in greenhouses to grow tomatoes, while Florida tomatoes are largely picked green and treated with a gas to change their color.
  • The dispute unfolded in the heated politics surrounding the presidential election, with Mexican growers charging that the Commerce Department was courting voters in the important swing state of Florida. Instead, the timing of the negotiations ensured that the government could win those votes and bring the controversy to a conclusion satisfactory to the Mexicans after the election was over.
  • The Mexicans enlisted roughly 370 American businesses, including Wal-Mart Stores and meat and vegetable producers, to argue their cause.
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