Focus on Australia and the Murray-Darling Basin

The Murray-Darling - an Australian river system destroyed by civilisation

Seemorerocks

I woke up this morning to the  story from RT:

Australia to spend over $11mn to eradicate carps by releasing herpes virus into rivers

© David W Cerny / Reuters

Australia will spend more than US$11 million in a bid to exterminate European carp by releasing a virulent strain of herpes into the country’s largest waterway.

As much as 15 million Australian dollars will be spent on funding the clearing of the Murray-Darling Basin from the country’s worst freshwater feral pest. This will be included into Tuesday’s federal budget, Australian authorities said on Sunday.

Interestingly enough, the war on fish is to be waged by an unusual means – the water will be contaminated with a special type of herpes, known as koi herpes.

Commonwealth Scientific and Industrial Research Organisation (CSIRO) scientists have been carrying out various tests for nearly a decade on other animals including chickens, mice, frogs, turtles and water dragons “to determine the safety and suitability” of the virus in dealing with an excessive carp population.

The virus was proven to be harmless to humans and animals, but it causes kidney failure in carps, attacks their skin and kills the fish after sitting tight in its system for about seven days.

“It causes high death rates in common carp and in the ornamental koi carp. No other species of fish, including goldfish, are known to be affected by the virus,” CSIRO official website says.

“It affects the European carp by attacking their kidneys, their skin, their gills and stopping them breathing effectively,” Australian Science Minister Christopher Pyne said, according to ABC news.

“They have the virus for a week before they show any symptoms and it suddenly kills them within 24 hours,” he dded.

It’s been calculated that the carp-control program planned to be launched in 2018 will kill 95 percent of the targeted fish over the next 30 years.

The project can’t be brought to life right away since it is still to be determined how to deal with dead bodies most effectively. A significant part of the budgeting is to be spent specifically on a clean-up program.

“There’s obvious talk about whether the carp could be used for fertilizer, whether they could be used for pet food, whether they'll need to be buried in large graves and be allowed to dissipate back into the system,” Pyne noted.

Carps, that were described as the “rabbits of waterways” by Australia’s Agriculture and Water Resources Minister Barnaby Joyce for how quickly they breed and spread, have brought other populations of fish in the Murray River to the verge of extinction. Apart from that, every year Australia loses up to 500 million Australian dollars (more than US$ 380 million) due to the uncontrolled population of carps, he also said.

My response

My immediate response to the item was that it is a perfect response to the totally insanity of the human species in the midst of the predicament which is perfectly expressed by the expression "you can't have infinite growth on a finite planet"

In Australia's case it's a very finite planet.

It is an illustration of the usual response to problems caused by civilisation itself is to double down and to respond with more of the same.

I was aware of the Murray-Darling but only vaguely so.

This map was a revelation for me. 

The Murray-Darling Basin covers most to the most productive land in the country and is responsible for 50% of all crops

Take away the water of the Murray River and its tributaries and Australian "civilisation" is in deep trouble.

Add abrupt climate change to the mixture and you have disaster.

Most Australians (the ones that live in towns) will be blissfully (and often deliberately) ignorant of the extent to which their comfortable lifestyles are 100 percent dependant on the exploitation of this river system.

Most of the items they take for granted in the supermarket wouldn't be there were it not for the river.

The truth is that the Murray River hardly flows at all in parts and scarcely makes it to the sea.

If it wasn't for human intervention such as damming the river it would have completely dried up due to climate extremes and the rapacious exploitation by agriculture.

The dams have created colder water and the killing-off of native fish species has provided the perfect environment for introduced European species such as the carp. 

Hence the insanity of spending $11 million to introduce the herpes virus to kill off the car. 

I have to presume there are no native fish left to kill off because I doubt very much that the herpes virus will know the difference.

It is not difficult for those of us with our eyes open to join the dots about what this means for Australia.

A perfect storm of insane overexploitation of a resource in a country that cannot sustain more than a fraction of the actual population of Australia - combined with runaway climate change that will destroy the ability to grow food, especially in an already-dry continent.

I did find this documentary, More Than a River: the Murray-Darling Basin and its People which will be of particular interest to people like myself, living outside Australia.

And from the Wilderness Society of Australia

Let the Murray-Darling River flow

The Murray-Darling Basin is the largest river system in Australia and it is under threat. The science is telling us that we need to return a substantial amount of water to the system in order to ensure its long term health. Despite this, the Murray-Darling Basin Authority is gambling with the numbers, ignoring its own science and preparing to release a plan that will not only sell the river short, but the Australian people as well.

Finally...

I am sure that our friend Deejay Rebel,living in interior Victoria will have something to say about these official temperature averages - just as I do about figures I see here in New Zealand.

Endless summer: Australia's hottest March on record

This March was the hottest on record for Australia, according to new data released by the Bureau of Meteorology (BoM).

The national mean temperature was 1.7°C above the historical March average, exceeding the previous record of 1.67°C set in 1986.

Radio NZ discusses overpopulation

Climate change denier, Jim Mora replaces Kim Hill to discuss the limits of growth with an Australian academic who clearly still defends infinite growth.

Vegetarianism seems to be the answer (sic) as well as a bit of tinkering around the edges.

Corey Bradshaw: Population Limits

Jim Mora talks to the Sir Hubert Wilkins Chair of Climate Change in the School of Biological Sciences at the University of Adelaide, whose research interests include population dynamics, extinction theory, invasion biology, and climate change impacts and mitigation

It's the economy, stupid

The spectre of economic collapse has never been far away

Serious Financial Trouble Is Erupting In Germany And Japan

By Michael Snyder,

Economic Collapse,

8 October, 2014

There are some who believe that the next great financial crash will not begin in the United States.  Instead, they are convinced that a financial crisis that begins in Europe or in Japan (or both) will end up spreading across the globe and take down the U.S. too.  Time will tell if they are ultimately correct, but even now there are signs that financial trouble is already starting to erupt in both Germany and Japan.  German stocks have declined 10 percent since July, and that puts them in "correction" territory.  In Japan, the economy is a total mess right now.  According to figures that were just released, Japanese GDP contracted at a 7.1 percent annualized rate during the second quarter and private consumption contracted at a 19 percent annualized rate.  Could a financial collapse in either of those nations be the catalyst that sets off financial dominoes all over the planet?

This week, the worst German industrial production figure since 2009 rattled global financial markets.  Germany is supposed to be the economic "rock" of Europe, but at this point that "rock" is starting to show cracks.

And certainly the civil war in Ukraine and the growing Ebola crisis are not helping things either.  German investors are becoming increasingly jittery, and as I mentioned above the German stock market has already declined 10 percent since July...

German stocks, weighed down by the economic fallout spawned by the Ukraine-Russia crisis and the eurzone’s weak economy, are now down more than 10% from their July peak and officially in correction territory.

The DAX, Germany’s benchmark stock index, has succumbed to recent data points that show the German economy has ground to a halt, hurt in large part by the economic sanctions levied at its major trading partner, Russia, by the U.S. and European Union as a way to get Moscow to butt out of Ukraine’s affairs. The economic slowdown in the rest of the debt-hobbled eurozone has also hurt the German economy, considered the economic locomotive of Europe.

In trading today, the DAX fell as low as 8960.43, which put it down 10.7% from its July 3 closing high of 10,029.43 and off nearly 11% from its June 20 intraday peak of 10,050.98.

And when you look at some of the biggest corporate names in Germany, things look even more dramatic.

Just check out some of these numbers...

The hardest hit sectors have been retailers, industrials and leisure stocks with sports clothing giant Adidas down 37.7pc for the year, airline Lufthansa down 27pc, car group Volkswagen sliding 23.6pc and Deutchse Bank falling 20.2pc so far this year.

Meanwhile, things in Japan appear to be going from bad to worse.

The government of Japan is more than a quadrillion yen in debt, and it has been furiously printing money and debasing the yen in a desperate attempt to get the Japanese economy going again.

Unfortunately for them, it is simply not working.  The revised economic numbers for the second quarter were absolutely disastrous.  The following comes from a Japanese news source...

On an annualized basis, the GDP contraction was 7.1 percent, compared with 6.8 percent in the preliminary estimate. That makes it the worst performance since early 2009, at the height of the global financial crisis.

The blow from the first stage of the sales tax hike in April extended into this quarter, with retail sales and household spending falling in July. The administration signaled last week that it is prepared to boost stimulus to help weather a second stage of the levy scheduled for October 2015.

Corporate capital investment dropped 5.1 percent from the previous quarter, more than double the initial estimate of 2.5 percent.

Private consumption was meanwhile revised to a 5.1 percent drop from the initial reading of 5 percent, meaning it sank 19 percent on an annualized basis from the previous quarter, rather than the initial estimate of 18.7 percent, Monday’s report said.

For the moment, things are looking pretty good in the United States.

But as I have written about so many times, our financial markets are perfectly primed for a fall.

Other experts see things the same way.  Just consider what John Hussman wrote recently...

As I did in 2000 and 2007, I feel obligated to state an expectation that only seems like a bizarre assertion because the financial memory is just as short as the popular understanding of valuation is superficial: I view the stock market as likely to lose more than half of its value from its recent high to its ultimate low in this market cycle.

…

At present, however, market conditions couple valuations that are more than double pre-bubble norms (on historically reliable measures) with clear deterioration in market internals and our measures of trend uniformity. None of these factors provide support for the market here. In my view, speculators are dancing without a floor.

And it isn't just stocks that could potentially be on the verge of a massive decline.  The bond market is also experiencing an unprecedented bubble right now.  And when that bubble bursts, the carnage will be unbelievable.  This has become so obvious that even CNBC is talking about it...

Picture this: The bond market gets spooked by a sudden interest rate scare, sending a throng of buyers streaming toward the exits, only to find a dearth of buyers on the other side.

As a result, liquidity evaporates, yields soar, and the U.S. finds itself smack in the middle of another debt crisis no one saw coming.

It's a scenario that TABB Group fixed income head Anthony J. Perrotta believes is not all that far-fetched, considering the market had what could be considered a sneak preview in May 2013. That was the "taper tantrum," which saw yields spike and stocks sell off after then-Federal Reserve Chairman Ben Bernanke made remarks that the market construed as indicating rates would rise sooner than expected.

If the strength of our financial markets reflected overall strength in the U.S. economy there would not be nearly as much cause for concern.

But at this point our financial markets have become completely and totally divorced from economic reality.

The truth is that our economic fundamentals continue to decay.  In fact, the IMF says that China now has the largest economy on the planet on a purchasing power basis.  The era of American economic dominance is ending.  It is just that the financial markets have not gotten the memo yet.

Hopefully we still have at least a few more months before stock markets all over the world start crashing.  But remember, we are entering the seventh year of the seven year cycle of economic crashes that so many people are talking about these days.  And we are definitely primed for a global financial collapse.

Sadly, most people did not see the crash of 2008 coming, and most people will not see the next one coming either.

Economic collapse

Britain is looking at its third "recession" in 5 years. Warnings are in the wind.

Global Leading Indicator Plunges To Economic "Slowdown", Goldman Warns

Zero Hedge,

21 September, 2014

Just two short months ago, Goldman Sachs was exuberant over the 'expansion' signals that the firm's Global Leading Indicator Swirlogram was exhibiting as it confirmed their 'economists' expectations that the Keynesian hockey-stick of hope would once again re-appear majestically in H2 2014 and lift America (and the world) to escape velocity. That dream is over. Confirming the collapse of world GDP expectations, Goldman's GLI has plunged into 'slowdown' with momentum starting to slow. Perhaps, just perhaps, as we noted previously, this time is not different and the annual cycle of extrapolating early-year hope is rapidly turning to late-year disappointment.

As Goldman explains...

Our September Advanced GLI came in at 3.0%yoy, down from last month’s reading of 3.1%yoy. Momentum decreased to 0.25%mom from 0.29%mom last month.

The September Advanced reading places the global cycle in the ‘Slowdown’ phase, characterised by positive but decelerating momentum.

Which explains this...

And confirms concerns that this time is no different, as we noted previously,

For the past five years there has been a very clear and significant cycle to US macro data - a slight rise to start the year, notable weakness into the middle of the year, a rapid recovery into the fall, then generally flat to year-end. A year ago, we explained this cycle appears to be created by government agencies need to spend, spend, spend their budgets out ahead of fiscal year-end (Sept).

This year has been no different, aside from the knee-jerk higher in macro data - somewhat shocking in its magnitude to 'every' economist with 3, 4, and 5-sigma beats in many data - came a little earlier but to the same level of past year's exuberance (as perhaps Ex-Im concerns, Fed concerns, and election concerns sparked earlier-than-usual spend-down by agencies).

*  *  *

Of course, if this plays out... it's 'perfect' for the Fed to extend dovish language and investors to pile on into stocks on the back of the bad news... or without QE, is Fed talk no longer enough?

Two days after the election. There goes Key's “rock star economy”

Consumer confidence dips as rising rates dim outlook

NZ Herald,

22 September, 2014

New Zealand consumer confidence fell in the third quarter amid signs rising interest rates and a slower pace of economic growth are dimming the outlook and kiwis' spending plans.

The Westpac McDermott Miller Consumer Confidence Index fell to 116.7 in the September quarter, from 121.2 three months earlier and from a nine-year high of 121.7 in the March survey. A reading above 100 indicates more optimists than pessimists.

The Reserve Bank has signalled a pause in its tightening cycle after lifting the official cash rate to 3.5 per cent, but economists see further hikes to the OCR from early 2015, driving up borrowing costs. That may be reflected in consumers' attitudes toward their current and future finances and appetite to buy a major household item, which all weakened.

"Consumer sentiment shifted down a gear in the September quarter, on the back of less exuberant economic news, rising interest rates and, possibly, a bout of uncertainty ahead of the election," said Westpac chief economist Dominick Stephens.

The drop in those deeming it a good time to buy a household item "may be an early sign of consumers becoming a touch more cautious with their spending."

The present conditions index fell to 113 from 116.8 three months earlier and the expected conditions index fell to 119.3 from 124.1. Consumers' attitude to their current financial situation weakened to - 0.1 from 2.1 and for their expected financial situation, slipped to 10.2 from 11.5.

Those deeming it a good time to buy fell to 26.1 from 31.5. The one-year economic outlook tumbled to 18.3 from 30.8, while the five-year outlook recorded a more modest decline, to 29.3 from 30.1.

The Dow And S&P 500 Soar To Irrational Heights – Meanwhile The Ultra-Wealthy Rush To Buy Gold Bars

By Michael Snyder

Economic Collapse Blog,

18 September, 2014

Did you know that the number of gold bars being purchased by ultra-wealthy individuals has increased by 243 percent so far this year?  If stocks are just going to keep soaring, why are they doing this?  On Thursday, the Dow Jones industrial average and the S&P 500 both closed at record highs once again.  It is a party that never seems to end, and there are a lot of really happy people on Wall Street these days.  But those that are discerning realize that we witnessed the exact same kind of bubble behavior during the dotcom boom and during the run up to the last financial crash in 2007.  The irrational exuberance that we are witnessing right now cannot go on forever.  And the bigger that this bubble gets, the more painful that it is going to be when it finally bursts.  Those that get out at the peaks of the market are the ones that usually end up making lots of money.  Those that ride stocks all the way up and all the way down are the ones that usually end up getting totally wiped out.

To get an idea of how irrational the markets have become, all one has to do is to look at Twitter.

Would you value "a horribly mismanaged company" that is less than 10 years old and that has never made a yearly profit at 31 billion dollars?

Well, that is precisely how much the financial markets say that Twitter is worth at this moment.

Even though Twitter will probably never be much more popular than it is right now, it continues to bleed money profusely.  On a GAAP (generally accepted accounting principles) basis, Twitter lost an astounding 145 million dollars during the second quarter of 2014...

Twitter’s GAAP net loss totaled $145 million, up from $42 million a year ago. On a GAAP basis, Twitter lost $0.24 per share. Investors, however, were not expecting Twitter to be profitable by GAAP measurements, so the loss isn’t too much of a drag.

Why would anyone want to invest in such a money pit?

Here are some more disturbing financial numbers about Twitter from David Stockman...

Currently, Twitter (TWTR) is valued at $31 billion.That’s 18X revenue, but the catch is that the revenue in question is it’s lifetime bookings over the 18 quarters since Q1 2010.

When it comes to profits, the numbers are not nearly so promising!  For the LTM period ending in June, TWTR booked $974 million of revenue and $1.7 billion of operating expense. That why “NM” shows up in its LTM ratio of enterprise value to EBITDA. It turns out that its EBITDA was -$704 million. In fact, its R&D expense alone was 83% of revenues.

Of course the truth is that Twitter should be able to make money.

And it probably would be making money if it was being managed better.

The following is what Silicon Valley venture capitalist Peter Thiel said about Twitter on CNBC the other day...

"It's a horribly mismanaged company — probably a lot of pot-smoking going on there."

But because Twitter is a "hot tech stock" investors are literally throwing money at it.

And there are many other tech companies that have similar stories.  Off the top of my head, Snapchat, LinkedIn, Yelp and Pinterest come to mind.

Fueled by the quantitative easing policies of the Federal Reserve, U.S. stocks have enjoyed an unprecedented joy ride.

However, as David Stockman recently told Yahoo Finance, the subsequent crash is likely to be enormously painful...

"I think what the Fed is doing is so unprecedented, what is happening in the markets is so unnatural," he said. "This is dangerous, combustible stuff, and I don’t know when the explosion occurs - when the collapse suddenly is upon us - but when it happens, people will be happy that they got out of the way if they did."

The behavior that we are observing in the stock market simply does not reflect what is happening in the economy overall whatsoever.

In many ways, U.S. economic fundamentals just continue to get even worse.  Small business ownership in the United States is at an all-time low, the labor force participation rate is the lowest that it has been in 36 years, and the U.S. national debt has grown by more than a trillion dollars over the past 12 months.

But on Wall Street right now, there is very little fear that the party is going to end any time soon.

The following is how Seth Klarman recently described the market complacency that he is seeing at the moment...

To put it a bit differently, writer and investor John Mauldin is right when he says that there is “a bubble in complacency.” Fear has effectively been banished. The members of the Fed know it. Stock traders who chase the market to new highs almost daily know it. Implied volatilities (and realized volatilities) are historically low (the VIX Index recently hit a seven-year low), and falling. The Bank for International Settlements recently cautioned that financial markets are euphoric and in the grip of an aggressive search for yield. The S&P has gone over 1,000 days without a 10% decline, according to Birinyi Associates. Dutch and French 10-year government bond yields are at 500 and 250 year lows, respectively; Spain, 225 years. Spanish debt yields were recently inside of U.S. levels.

But as Klarman also observed, just because "investors have been seduced into feeling good" does not mean that this current bubble is any different from what we witnessed back in 2007...

It’s not hard to reach the conclusion that so many investors feel good not because things are good but because investors have been seduced into feeling good—otherwise known as “the wealth effect.” We really are far along in re-creating the markets of 2007, which felt great but were deeply unstable when shocks started to pile up. Even Janet Yellen sees “pockets of increasing risk-taking” in the markets, yet she has made clear that she won’t raise rates to fight incipient bubbles. For all of our sakes, we really wish she would.

Meanwhile, the ultra-wealthy are making moves to protect themselves from the inevitable chaos that is coming.

For example, the Telegraph recently reported that sales of gold bars to wealthy customers are up 243 percent so far in 2014...

The super-rich are looking to protect their wealth through buying record numbers of "Italian job" style gold bars, according to bullion experts.

The number of 12.5kg gold bars being bought by wealthy customers has increased 243 percent so far this year, when compared to the same period last year, said Rob Halliday-Stein founder of BullionByPost.

"These gold bars are usually stored in the vaults of central banks and are the same ones you see in the film 'The Italian Job'," added David Cousins, bullion executive from London based ATS Bullion.

Do they know something that we don't?

The ultra-wealthy are able to stay ultra-wealthy for a reason.

They are usually a step or two ahead of most of the rest of us.

And any rational person should be able to see that this financial bubble is going to end very, very badly.

The Chinese economy

Everyone's Freaked Out That China's 'Minsky Moment' Has Arrived

Business Insider,

22 March, 2014

After years of booming credit expansion, we're now seeing slower economic growth in China and a rising number of domestic bond defaults.

This has prompted many to ask has China's "Minsky moment" arrived?

The phenomenon is named after economist Hyman Minsky who articulated that periods of speculation and credit growth inflate assets, only to end in crisis.

Societe Generale's Wei Yao was one of the first to write this up a year ago.

Morgan Stanley's Cyril Moulle-Berteaux and Sergei Parmenov, argue that China is approaching its 'Minsky moment' (via Zerohedge). 

"In recent weeks, a trip to the region and further research into China’s shadow banking system have convinced us that China is approaching its “Minsky Moment,” (Display 1) which increases the chances of a disorderly unwind of China’s excesses. The efficiency with which credit generates economic activity is already deteriorating, as more investments are made in non-productive projects and more debt is being used to repay old debts."

Morgan Stanley via Zerohedge

But UBS economist Tao Wang argues that China's "Minsky moment" isn't here. Wang points to a few reasons she thinks China pessimists are wrong.

1. Pessimists are too focused on data at the start of the year — This data is distorted by the Lunar New Year holiday and should not be used to predict the rest of the year. In terms of exports, while the U.S. has had a severe winter, capital goods expenditures are expected to rise this year.
2. Systemic risks in shadow banking are limited — A sharp deleveraging is unlikely because of "the lack of leverage in the sector, ample liquidity in the financial system, and the government's control," writes Wang. She thinks risk will be contained. (More on this later).
3. Concerns about credit growth are overdone — Wang expects total social financing to rise 16% even as the government tries to tighten regulations on shadow banking. There will be enough credit growth to support economic activity
4. Fears about the property sector are misplaced — Beijing will support construction with social housing and urbanization, and the slowdown will be "moderate."
5. Hot money inflows are unwinding — China's foreign exchange reserves of $3.8 trillion are enough to keep the exchange rate stable, while any liquidity drain can be offset by open market operations or cutting the reserve requirement ratio which currently sits at 20%.

China's first domestic bond default and the recent collapse of a property developer have kicked off chatter about the systemic risk to China's financial system.

Wang, however, posits that a loss of confidence in China's shadow banking system would most likely see liquidity "flow back to the banking system (large banks especially), as the latter offer an implicit guarantee and China's capital account is still largely closed." So why doesn't she expect a systematic crisis?

Wang expects that the government will ask banks to backstop some of the trust and wealth management products and slowly restructure their debt, rather than "the rapid and market-forced write offs or a spiral of deleveraging that China 'bears' speak of."

She also argues that banks still "have liquidity in the form of stable and cheap deposits trapped by a largely closed capital account."

Wang expects China's economy to grow 7.5% this year and thinks "fears of an imminent credit-crunch and hard landing will prove unfounded."

SEE ALSO: China's Economic Predicament: Why Pain Is Coming No Matter What