Democracy for public debts

It seems that states may go bankrupt after overspending.  But the underlying problem is that this money spending behavior of politicians is necessary to keep the people voting. More fundings, social and health security, transport infrastructure etc. is well acclaimed. After going bankrupt some citizens don't have cars anymore to use this infrastructure. So it is necessary to rethink the steering of public spendings. Much more direct democracy might be the solution.

Next War Ahead for the U.S.A?

The ties of the US intelligence to the Pakistani intelligence were not so close when killing Osama Bin Laden. Tensions are rising. May be Pakistan is preparing an assault on U.S. troops in Iraq. President Obamas retreat of the troops from Iraq may be the last chance to avoid an open conflict. This new war would be very dangerous because of the existence of some atomic weapons in Pakistan. The killing of Bin Laden was a calculated risk which would not trigger this war, but tensions were certainly rising.

Don't trust Climate Change Alarmist Politicians!

Representative democracy by definition has to head for the wealth of majorities. Now given the fact that climate change will affect low lands in Asia first and adoption costs in Europe will not harm living quality of our own lives, where is the pressure coming from? Politicians want to claim that they are capable of solving problems.  They have failed directing global economies in the right direction, bad banks aplenty! Similar with automotive industry producing large overhang of luxury fuel wasting cars. Do they really think they may the climate change  topic proving that they are able to be productive? Yes, it seems so, because never in history politicians were assessed by figures, but only by the quality of declarations. So they will present new memorandums as success. The only thing which will really help to introduce science based policies is to amend democracy by an indicator led system. One criteria of course is the share of non voters, but other indicators like transaction losses might be included depicting the energy intensity and independence on energy imports of national and regional economies. Those indicators might be used to form a bonus for politicians adding to their income if they are successful. Apart from direct democracy which is lived in Switzerland, this would be an interesting alternative as  fact based democracy.

Speculating/investing in the crisis

The main hypothesis of the following statement is that consumers will spend 1/3 less due to the crisis. The next question is then where will they try to save money and what requirements will be dismissed?
One of the winners may be added value - investment in nutrition or mobility should offer added value. Since information of customers is becoming more perfect only serious offers will persist. But now back to the main spendings:

• nutrition
• energy
• telecommunication
• mobility

With nutrition global economy has lead to a affordable and good offer- but some goods like cheese and vegetables are overpriced. It may be profitable to invest in small producers in domestic markets with low wages. Transport cost will come down but apart from the oil prices lacking options to bundle goods are appear ant with decreasing good streams. So the tip is - go local but not for luxury goods. Big brand will loose their dominating power against low cost grocery chains with their own brands. Investments in general should be made into downsizing the business and reducing transaction losses (handling, storing...). Reuse of goods will also be on the agenda.
The energy business sees less market attributes compared to nutrition. There is a lot of public funding and investment in energy saving now which keep alive craft, trade and production for some time. The risk is that the pay back is not guaranteed with this free spending attitude. There is the same risk as with scrapping incentives. The long term benefit is not clear. Low cost energy saving products however may be on the rise. There is now aggressive campaigning against energy saving light bulbs, but since candles are not an attractive alternative energy saving is an issue for poor. It is true that light is not the main expense but small scale changes are to invent with heating demand and also domestic hot water. Small solar stations and intelligent usage is on the rise. Adminsitration should put more focus on requiring unbiased information about the benefit of the gadgets (assessment facilities might profit then).
With utilities investment in intelligent metering will reduce the problems raised by lacking customer ability to pay the bills.Transport of energy resources which may not be used at the production site will become more important. The will to risk more with regards to nuclear energy and allow open coal pits is visible but may not be accepted because of the long term costs.
Telecommunication has been a very irrational field with decreasing prices and dubious services. Investing in prepaid services and least cost solutions will pay off in future. The bankrupt handset repair services may regain attractiveness unless the handsets will become very cheap. In general the added value is only building networks offering mutual help, may be something like citizens band (2 way radio).
With mobility we see most of the problems now seeing automakers in a big crisis. The first producer offering fit for us vehices at a convincing overall cost balance will prevail. This is not only true for battery electric vehicles but may lead to new simple engines with internal combustion- also capable of using alternative fuels. Those engines may also for the backbone of a new powertrain concept. The tip is here to head for serial electric vehicles with a minimum of battery so far until they will be affordable.

bad old habits are creeping in

In Europe we may bring back historical facts back to our minds when reacting to the economical crisis. What happened in the thirties after the breakdown of the economy:
- intolerance was on the raise
- sovereignty of countries was put under discussion
- means to secure commodities were becoming more brutal (occupation, war, etc.)
- xenophobia and protectionism got acceptable in society
It is important to remember were this all lead into. So it is absolutely necessary now to stop thinking about securing our wealth in the first order but to prevent deterioration of relationships between people and countries.

Business model for beleagered auto makers

The age of roaring mufflers is definitely over. The hype about battery electric vehicles for every one too. So we will see more vehicles like the Chevy Volt - well may be not the best example for a energy efficient vehicle. This vehicles will have an power generator on board or detachable. Range extenders are a product like a pluggable mp3 player in the car. You may buy it on the market if the size and voltage fits like an APU. Automotive industry may work like other industry reducing the depth of the manufacturing process. Most components will be tier 1 like:
- wheel including electric drive from Michelin, Continental or others
- cabin based on a couple of models from independent stamping experts like Magna
- chassis based on a couple of models from independent underbody & suspension experts like Magna Steyr
- range extender from Lombardini, OEMtek, Valeo, TM4 or others (Fiat is now developing a two cylinder watch out for that development-may be massive downsizing will take place and also fuel cells will play a role here in the long range, Delphi has been active here)
- you may do the tapestry work so it fits the seats you are also buying
- and yes you will assemble the whole thing and merchandise it via multi brand resellers

That's the affordable future if you want to avoid a monopolistic situation where the biggest - may be Toyota - incorporates a lot of other auto makers. Lacking competition will then increase profits to allow a comfortable life again for the automotive industry.

Who profits from the crisis?

1. preachers of irrationality?
2. parsimony?
3. drug dealers- which may be also 1. if you count religion as opium

Let me explain ;-)

ad 1.
We see an exchange of one irrationality by another. While self claiming financial experts were selling us financial products with high risk and we were accepting that pushing away the risk- we now have a full return of another irrationality - namely religion. Seems that enlightenment was not sufficient mastering the crisis. No the brancuopcy was not the revenge of god because we were wasting resources, it was pure stupidity and the will to push aside the fact that wealth is limited if you concede all a certain share. So there is hope that we will be proud of our newly acquired knowledge about the economy and not deliver ourselves to preachers or irrationality.

ad 2.
People might be heading for more savings donating less. On the other head the lesson learned is also that teaming reduces the risk. This is not restrained to family but includes job and friends.

ad 3.
In the first run the huge amount of money lost might lead to the assumption that a lot of people now wants to forget what happened. On the second glance we see that they will fight against the swindlers having sold the junk bonds. So again there is hope that well considered behavior is on the agenda.

Summarizing- while there might be the risk that the devilish temptation - even if it is looking cherubic - will have its chance - people will allow a second rational argument and not trap into one of the mentioned pitfalls.