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Bear Stearns: Wronging the only right thing

by Jerome a Paris Mon Mar 24th, 2008 at 09:06:18 AM EST

J.P. Morgan Nears Deal To Increase Bear Bid

J.P. Morgan Chase & Co. is near an agreement to quintuple the price it will pay for Bear Stearns Cos. Inc. to $10 a share, according to a person familiar with the situation.

(...)

The revised deal, which was negotiated over the weekend, is aimed at mollifying Bear's investors who have been furious with the $2-a-share agreement struck last weekend as the storied investment bank was on the brink of collapse.

The only part of that deal which was not outrageous, ie the shareholders of Bear Stearns being wiped out, is now being corrected because these shareholders were not happy. The fact that the Fed made a gift of $30 billion of taxpayer money to JPMorgan has somehow led to much less outrage and is likely to remain (the WSJ article does mention that the terms of the Fed support may change, so we'll see).

If an exemple was ever needed what the priorities of our deciders are...

[See UPDATE below the fold]


Update [2008-3-24 10:26:0 by Jerome a Paris]::

J.P. Morgan Agrees To Increase Bear Price

J.P. Morgan Chase & Co. has agreed to quintuple the price it will pay for Bear Stearns & Cos. to $10 a share, hoping to stem criticism that the banking giant was getting too sweet a deal to snap up the ailing investment bank.

There has been only a small modification to the terms of the Fed guarantee:

Other terms of the new deal are different than the original pact, including the role of the Federal Reserve, which played a critical role in the week-old deal. Among other things, J.P. Morgan will bear the first $1 billion of any losses in financing for Bear's less-liquid assets, such as mortgage securities, with the Fed being responsible for the other $29 million [sic - that would be *b*illion].

JPMorgan's market capitalisation, now equal to $156 billion, has increased by more than 25% (ie precisely $30 billion) since the deal was announced, and is unchanged today, proof positive that the improved terms it has grudgingly provide are still a great deal for it - and of course it is, given that it took over the valuable bits of Bear Stearns it wanted (notably the prime brokerage, and other valuable stuff like the Manhattan building) and it bears very little risk on the rest, thanks to taxpayers stepping in.

The $30 billion increase in JPMorgan's value shows the price that could have been extracted for the Fed guarantee... If an exemple was ever needed what the priorities of our deciders are...and their wilful incompetence at managing the public purse.

I wonder if the Democratic candidates will speak against the deal?

Display:
Why is not all FED support made in the form of convertible loans? That's what the sovereign wealth funds did.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Mon Mar 24th, 2008 at 09:19:36 AM EST
Yes, that was a rhetorical question.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Mon Mar 24th, 2008 at 11:01:40 AM EST
[ Parent ]
Brazen daylight robbery. What will it take for people to notice these things? Will the Ruling Class have to in fact dissolve the Senate and start crucifying people? How much more direct does theft need to be? It reminds of the of the chapter in the Silmarillion about the fall of Numenor where Sauron, having corrupted the King, is busily dragging victims to be burned alive as sacrifices while the people are going "la la la". Or cheering. Come to think of it, this may literally be what has happened. How else to explain the evident lust for torture and the unquenchable bloodthirsty greed for gold?

I have an idea. We could institute a monthly lottery to more fairly and efficiently allocate resources upwards. The rich get the tickets, the rest of us are the tickets, and the lucky winners get brand new slaves. Sort of like now, except less slicing and dicing...they get the entire body, not just some fraction of its appropriated labour. This of course is where they are headed and what they want.

On that subject, in the "Oh, have you noticed?" department, we read on the front page of today's online WaPo that Even though workers are producing more, median family income has fallen 2.6 percent since 2000 which they attribute to "Health costs cutting into wages". By which they mean "Insurance company profits and executive loot expenses cutting into wages."

by PIGL (stevec@boreal.gmail@com) on Mon Mar 24th, 2008 at 09:32:36 AM EST
This is disgusting.. this is so disgusting.. but eiii.. people are worried about the little theft in the sueprmarket... someone stealing millions and millions..ei no problem..

gee.. taxpayer money to support a blatant robbery.

I really want to throw up...

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Mon Mar 24th, 2008 at 09:40:10 AM EST
Billions, billions. It takes billions to reward the ingenuity of the market.

With mere millions, it's still a crime.

by Francois in Paris on Mon Mar 24th, 2008 at 01:21:16 PM EST
[ Parent ]
http://www.dailykos.com/storyonly/2008/3/24/95939/2383/980/483114

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon Mar 24th, 2008 at 10:26:34 AM EST
How about "No Bailouts for Non-Retail Banks"?

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Mar 24th, 2008 at 10:46:24 AM EST
anything from the Democrats on this one, not in any meaningful and direct way. Because that would undermine one of their sources of donor money.

Senator Schumer, on the other hand, will likely have some good things to say about the sweetened deal. He's all about socialism...for wealthy shareholders in his state.

Hmmmm..there ysed to be a name for that....what was it again?

The Hun is always either at your throat or at your feet. Winston Churchill

by r------ on Mon Mar 24th, 2008 at 10:46:55 AM EST
Hmmmm..there ysed to be a name for that....what was it again?

Magical-Ponyism.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Mar 24th, 2008 at 10:54:44 AM EST
[ Parent ]
or, as mussolini might have said, poneyismo magico.

The Hun is always either at your throat or at your feet. Winston Churchill
by r------ on Mon Mar 24th, 2008 at 11:01:40 AM EST
[ Parent ]
I've really had about all I can stomach from this asshole, Schumer.  If he wants his donors in his state bailed out, he should take it up with the good people of New York and leave the rest of our (future) tax dollars alone.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Mar 24th, 2008 at 10:57:13 AM EST
[ Parent ]
Even better, to go along with Chuckie's awesome bailouts, now we've got Clinton asking Bush to appoint an "emergency working group on foreclosures," with Greenspan and Rubin running the show.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Mar 24th, 2008 at 11:31:43 AM EST
[ Parent ]
I wonder if the Democratic candidates will speak against the deal?

No.

("This has been another edition of simple answers to simple questions.")

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Mon Mar 24th, 2008 at 10:53:23 AM EST
Bear is Saved for JP Morgan to be Saved

Fed saved Bear Stearns by guaranteeing 29 billion of their bad paper in order for JP Morgan to be saved since Bear going down would have in effect allowed JP Morgan to fail due to the credit swaps problem which JP Morgan was holding lots of Bear's swaps. So essentially The Fed bailed out JP Morgan via the Bear guarantees. If there wasnt any liability to JP Morgan if Bear has gone out; then they would have let Bear Stearns file for Bankruptcy and that would be that. The increased offer by JP Morgan to the stockholders is a token of JP Morgan's own appreciation for allowing this deal to go through. The Bear stockholders know JP Morgan is not going to flinch over $10 per share since the damage to JP Morgan if the Bear deal falls apart is exponentially much greater than any sweetened offer. The Fed and JP Morgan knew the $2 original share offer was their initial low ball deal and were expecting to have to sweeten the offer.It will be interesting to see if this latest offer is good enough for the shareholders since the shareholders know both the Fed and JP Morgan cant afford for the deal to fail. What is the highest price JP Morgan will have to pay per share?

Who knows where the next problem is and what the ramifications are for other banks but to think the very same people who created the problem are now going to be part of any long term solution is delusional. The very fact that no one has proposed investigating why this over all financial debacle happened and who caused it should give everyone pause. Of course they have already started proposing 'solutions and possible regulations' without any due diligence by a totally independent commission, to the reasons why the whole mess happened.

The Fed, banks, financial entities etc. are hoping to delay the damage with the wish there be no transparency and enough time for the assets to gain value and make the balance sheets healthy.

What I cant understand is how come shareholders and district attorneys around the country arent suing civilly and indicting them all for fraud, respectively. It would seem easy to indict for fraud and many other criminal charges when Bear and other companies' executives make public statements their businesses are fine only days before they are bailed out by the Fed or declare bankruptcy.  Or when executives take huge bonuses knowing full well their companies' balance sheet problems will be public knowledge in a short period of time is also fraudulent.

Anotherwards many people should be going to jail or be forced into bankruptcy just defending themselves.

by An American in London on Mon Mar 24th, 2008 at 01:47:09 PM EST
An American in London:
What I cant understand is how come shareholders and district attorneys around the country arent suing civilly and indicting them all for fraud, respectively.

There was that Spitzer character who could have been interested in doing this.

Does anyone remember him?

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Mar 24th, 2008 at 02:07:19 PM EST
[ Parent ]
Of course we do.  His hooker was really hot, and we're obsessing over her.  So his name still pops up here and there, and we remember.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Mon Mar 24th, 2008 at 02:13:58 PM EST
[ Parent ]
Andrew Cuomo, the son of ex Governor Mario Cuomo, took over Spitzer's old job as Attorney General. Last November; he was making big noises about cleaning up the New York based financial industry etc.

Haven't heard a peep from him since and was wondering if the reason was he has locked up his own future campaign financing for future public offices he may aspire to, via commitments from many of the same players he would have had to investigate.

You really do need an independent commission made up of retired financial experts, attorney generals above repute etc. to get to the bottom of this debacle. It would eventually shine a light on the corruption which is endemic throughout the entire government and capitalistic system as we know it today.

It is the reason 10% of the US population control 75% of the wealth in America and the highest inequality of income ever.

by An American in London on Mon Mar 24th, 2008 at 02:49:03 PM EST
[ Parent ]
Wikipedia: Credit default swap

In 1995, J.P. Morgan's Blythe Masters (a 26-year old Cambridge University graduate hired by the bank), developed the first Credit Default Swaps and Collateralized Debt Obligations (CDO). On April 2nd, 2007, Masters (who by then was the head of J.P. Morgan's Global Credit Derivatives group), helped introduce CreditWatchTM to help evaluate credit swaps among other financial instruments.

By the end of 2007 there were an estimated USD 45 trillion worth of Credit Default Swap contracts.[2]

Sow the wind, reap the whirlwind.

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Mon Mar 24th, 2008 at 02:15:52 PM EST
[ Parent ]
An American in London:
Fed saved Bear Stearns by guaranteeing 29 billion of their bad paper in order for JP Morgan to be saved since Bear going down would have in effect allowed JP Morgan to fail due to the credit swaps problem which JP Morgan was holding lots of Bear's swaps.
Is this based on public information, or an educated guess?

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Mon Mar 24th, 2008 at 02:24:23 PM EST
[ Parent ]
that An American in London quoted:


The Truth and Consequences
Of $172 Trillion in Derivatives

Derivatives are essentially bets ... and ... debts.

As an illustration, if you and I were players, I could bet you that a particular firm will go bankrupt between now and year-end ... and you could bet me that it won't.

Or I could bet you that interest rates on junk bonds will rise more than interest rates on Treasury bonds ... and you could bet they will rise less, or not rise at all.

We could bet on virtually any market that moves, or even bet that it won't move.

For each wager, we'd likely borrow huge amounts of other people's money. And in each case, we'd have a contractual obligation (or right) to consummate the deal: To pay up if we lose (or collect if we win).

That's the essence of each transaction in the frenzied, hectic world of derivatives.

But what was once a small sideshow in the traditional world of stocks, bonds and loans has become the towering center ring in the big-top: The derivatives market has now ballooned into a monster of unimaginable dimensions.

At U.S. commercial banks alone, the total notional value of the derivatives is $172.2 trillion, according to the latest report by the U.S. Comptroller of the Currency (OCC). Plus, the OCC reports that:

  • In over 90% of these derivatives, there is no established exchange that helps protect either party from default.

  • Just FIVE major U.S. banks control 97% of all the bank-held derivatives in the United States, a concentration of power -- and risk -- unsurpassed in the history of finance.

  • All five of these major players would likely be severely crippled, or even bankrupted, by the default of just a few major counterparties like Bear Stearns.

  • Four have more credit exposure to counterparty defaults than they have capital.

  • Two have over four times more credit exposure than capital. (More details in a moment.)

Go read the rest at the link.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Mar 24th, 2008 at 03:29:31 PM EST
[ Parent ]
Thanks Jerome for the link.
by An American in London on Mon Mar 24th, 2008 at 04:02:56 PM EST
[ Parent ]
I prefer to define derivatives as insurance policies written by people too dumb and too cheap to pay for an actuary.

Car accidents and home fires are highly decorrelated. Car accidents and home fires can be insured.

Market bets gone wrong are highly correlated. Market crashes cannot be insured.

Simple, no? And yet they keep trying.

by Francois in Paris on Mon Mar 24th, 2008 at 04:26:54 PM EST
[ Parent ]
Jerome wrote:

thanks to taxpayers stepping in.

It's more like the taxpayers were dragged in, feet first.

by psyched (railtravel [at] gmail dot com) on Mon Mar 24th, 2008 at 02:20:57 PM EST

This has been a crisis of Anglo-Saxon transaction-based capitalism. Not too long ago, it was considered to be vastly superior to the eurozone's old-fashioned relationship finance. I doubt that in a few years' time people will continue to assess the relative strengths of the Anglo-Saxon and continental European financial systems in quite the same way. I would also expect the eurozone economy to withstand the economic shocks of the credit crisis in relatively better shape.


In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon Mar 24th, 2008 at 03:25:56 PM EST
Uh, lemme guess...hold on, thinkin'...was it you?
by PIGL (stevec@boreal.gmail@com) on Mon Mar 24th, 2008 at 05:39:10 PM EST
[ Parent ]
Krugman?

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Mon Mar 24th, 2008 at 06:15:36 PM EST
[ Parent ]
Munchau

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon Mar 24th, 2008 at 06:20:16 PM EST
[ Parent ]
So, is your "Anglo Disease" Op-Ed ready for submission to the FT?

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Mon Mar 24th, 2008 at 08:20:58 PM EST
[ Parent ]
no reply. Maybe I can try again, by sending it to Munchau himself.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Tue Mar 25th, 2008 at 06:08:36 AM EST
[ Parent ]
My point is that, now that Munchau has broached the subject, your article can no longer be considered taboo, or crackpot.

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Tue Mar 25th, 2008 at 06:12:13 AM EST
[ Parent ]

Beware a regulatory backlash against banks

Banks are focused on the current crisis but they should keep their eyes on another looming problem: a regulatory backlash that is already under way in some countries. It will be costly and will have unintended consequences.

The political dimension is broadening as the banking crisis feeds into the real economy. The US could already be in recession, the UK is slowing down and European Union growth forecasts have been scaled back. As people see the value of their homes fall, find banks less willing to lend money and feel the effect of rising inflation allied to average wage growth that has already not kept pace during the boom years, the calls by bankers and some regulators for measured reactions may not be listened to.



In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon Mar 24th, 2008 at 03:33:16 PM EST
The fact that the Fed made a gift of $30 billion of taxpayer money to JPMorgan has somehow led to much less outrage and is likely to remain (the WSJ article does mention that the terms of the Fed support may change, so we'll see).

how does exchanging $29 billion in cash for a portfolio of $30 million (marked down to best estimate of value) of assets qualify as a "gift"?  If the NY Fed ends up with a profit on the deal (like the Mexico loans or Brady bonds in the past) will you still consider it a "gift"?

The shareholders of Bear were free to reject the $2/share deal and take Bear into bankruptcy instead.  So JPM comes up with the extra cash to close the deal.  They tried to steal Bear on the very cheap and now it's just regular cheap.  hardly a crime.

As for expecting a government bought and paid for by big business to protect little folks first... want to buy a bridge?

by HiD on Mon Mar 24th, 2008 at 05:07:58 PM EST
$29 billion in cash for a portfolio of $30 million

I presume that's a typo?

by Metatone (metatone [a|t] gmail (dot) com) on Mon Mar 24th, 2008 at 05:37:37 PM EST
[ Parent ]
hopefully but you never know!!!!!!!!  (yes should have said $30 billion)
by HiD on Wed Mar 26th, 2008 at 07:10:27 AM EST
[ Parent ]
The Fed does not trade $30 bn cash against a "marked down" porfolio. It guarantees JPMorgan for any losses (minus now a deductible of $1 bn) it incurs from BS assets. The BS assets have only been marginally marked to market - indeed, the whole crisis came from the fact that there was no market (or whichever close proxy these was, like markit or itraxx, was terribly low and would have led to dominoeing bankruptcies).

So the Fed is exchanging $29 billion against a portfolio of junk that nobody can value today but which will at best be worth $29 billion more than the value JPMorgan squeezed out of it before dumping it on the fed's lap.

At best - no loss.
At worst - $29 billion loss.

How is this a good deal for the Fed?

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Mar 24th, 2008 at 06:19:44 PM EST
[ Parent ]
This is somewhat similar to Northern Rock.

The BoE wasn't financing NR, it was paying paper straight to NR's creditors using NR as a conduit. Which is why the final debt was something like ten times NR's nominal value.

Similarly the Fed isn't financing BS, it's 'supporting' JPM - and by implication the rest of Wall St, since JPM has creditors too.

This isn't finance, it's politics. The Fed is making a - slightly ambiguous - statement that whatever else happens in the US, Wall St is safe, and that with its help BS is worth closer to a sensible market value, so there's really no need to panic.

There's no point looking for an economic rationale, because there isn't one. This is really just a $30bn bedtime story and reassuring tuck-in before lights out.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon Mar 24th, 2008 at 08:09:05 PM EST
[ Parent ]
ThatBritGuy:
before lights out.
<shudder>

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Mon Mar 24th, 2008 at 08:20:04 PM EST
[ Parent ]
we'll just have to see.

The profit is not having our fucked up system come completely unglued.  If it only costs a few billion to stop a complete market meltdown, most of us will support the deal.

by HiD on Wed Mar 26th, 2008 at 07:11:49 AM EST
[ Parent ]
I don't know how many people in Europe know of Jay Gould a master of watering stock.

This seems to be part of the revised deal. There is more to this story than meets the eye. If the firm went bankrupt then various insurance policies in force against bond losses would have to be paid out. It is possible that JP Morgan has written some of these and would end up losing more money than they may from having to take on the existing liabilities of Bear Stearns.

Don't let your desire to see the "evil doers" get their comeuppance influence objective analysis. Many holders of common stock are just regular folks who thought they were investing in a safe, yet high yielding, firm. Many are employees who may or may not be responsible for bad practices.

Those who held Bear's instruments will suffer a loss regardless of what happens to the common stock.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Mon Mar 24th, 2008 at 05:47:03 PM EST
Why not let the U.S. financial system collapse? Can't we save the economy without it? The U.S. financial system is not really providing any net addition of value to the economy. It's more parasite that anything else at this point.

Would the collapse of Bear Stearns have brought down the whole economy? Or just the financial system?

It seems to me that this problem is being approached the entirely wrong way.

First. What do we need to accomplish? We want to ensure that credit is flowing to people who need it to conduct real economic activity. If a bunch of speculators and hedge funds are unable to get credit, why should anyone care? They are not going to use it for real economic activity.

So, let the financial system collapse. Is there not a way that we can force the trillions of dollars sloshing around the globe looking for the highest return to become "patient" and start pouring into the "green" rebuilding of the U.S. industrial economy, such as building mass transit systems that will help free us from fossil fuel dependency, or helping everyone replace their current vehicle with either hybrids or with high mileage vehicles.

As it stands, Bear Stears is saved and the financial system lives on to keep playing its funny money games, while the underlying problem is not addressed, and is not being addressed: the credit mechanism of the economy is being mis-used for speculation, rather than for funding real economic activity. Which means that another financial crisis is inevitable. So lets start asking questions "outside the box" with a view to radically transforming the financial system and forcing it to start doing something useful.

I believe this is going to be an important issue in the next year or two, as the political situation will shift radically as the economy deteriorates, and what was once thought impossible becomes thinkable and doable.

by NBBooks on Mon Mar 24th, 2008 at 06:35:22 PM EST
NBBooks:
while the underlying problem is not addressed, and is not being addressed: the credit mechanism of the economy is being mis-used for speculation, rather than for funding real economic activity. Which means that another financial crisis is inevitable.

nice point, straight to the heart of the matter.

no money for bridge maintenance, public health services, social security, where's it gone?

ahem, those through-the-roof bonuses?

miltary adventurism?

gambling addicts blew the housekeeping money, again.

quite brilliant, your concept of world excess capital being funneled into the greening of america.

 

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Mon Mar 24th, 2008 at 07:31:14 PM EST
[ Parent ]

UPS chief urges investment

The US must reinvest in its ageing, overused transportation networks or risk losing ground to the world's other leading economies, United Parcel Service's chief executive said.

Scott Davis told the Financial Times that the nation's private sector should seek out opportunities to partner with transportation authorities to help modernise the infrastructure that underpins the US economy.

We've got to work very closely with the government to look ahead and take a candid look at where we are," said Mr Davis, who took over as chief executive of UPS, the world's largest package-delivery company, in January. "It's so critical to the future competitiveness of the US that we build the transportation infrastructure that we need."

The US may need to spend $1,600bn in the next five years to restore its infrastructure to good condition, according to the American Society of Civil Engineers.




In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Tue Mar 25th, 2008 at 06:14:24 AM EST
[ Parent ]
That's a lot of money.

I think I'll have to convert it into currencies I can understand. $1,600,000,000,000=16000 Gripen fighter jets=320 big nuclear reactors=3,2 times the GDP of Sweden.

That is, this is a sh*tload of money.

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Tue Mar 25th, 2008 at 08:40:28 AM EST
[ Parent ]
It's not $1.6tn, it's $1.6tn over 5 years or $320bn/yr.Jerome a Paris:
The US may need to spend $1,600bn in the next five years
That's about 3% of US GDP. Not an unreasonable Keynesian stimulus plan.

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris
by Migeru (migeru at eurotrib dot com) on Tue Mar 25th, 2008 at 08:55:43 AM EST
[ Parent ]
It's still immense. Consider what a huge effort it would be if the US built 320 big reactors at $5 billion each over the next 5 years.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Tue Mar 25th, 2008 at 09:04:10 AM EST
[ Parent ]
3% of US GDP is immense in absolute terms, yes, but not in relative terms.

It does represent a few million jobs, though, maybe shaving a couple of percentage points from unemployment figures.

It'd be nice if the battle were only against the right wingers, not half of the left on top of that — François in Paris

by Migeru (migeru at eurotrib dot com) on Tue Mar 25th, 2008 at 09:49:25 AM EST
[ Parent ]
I guess that's what gives me hope on the energy issues. Even if we need to spend trillions, that'll just be a tiny part of the GDP over the next decade or three.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Tue Mar 25th, 2008 at 09:57:48 AM EST
[ Parent ]


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