Markets dropped sharply this week on news that most of the big names in silicon valley have had disappointing low-profit quarters. Google recently bought Motorola's cell phone business and is losing their shirts on it. Apple is about to announce a small low-profit iPad which is feared to cannibalize the profits of the full size iPad. Microsoft continues in their decade-long decline, pre-announcing several new products which no one understands and few care about,
Ethiopia is starting construction on a dam across the blue Nile, the source of 85% of Egypt's water. Egypt is threatening military action to take out the dam if it gets built. Such a dam would likely lead to severe food shortages in Egypt which would destabilize Egypt's government - exactly as the absence of such a dam is contributing to food shortages in Ethiopia and a destabilized government. Egypt also relies on water from aquifers - underground lakes fed by historic water flow through the Nile. These lakes are being drained at an alarming rate, much faster than the Nile can resupply them. Egypt is heading for a water crisis easily within ten years.
As wealth increases across India and Asia demand for meat goes up, and with it demand for more and more water to grow the grains to feed the animals. Additionally, power generation requires huge amounts of water for cooling purposes. Since 1950 fresh water consumption has quadrupled in the world; the supply has actually shrunk during this time due to aquifer depletion and glacier shrinkage. China is basically using all of their fresh water right now, and their demand will exceed their supply in the next couple of years, then continue to grow from there. There will be water wars across Africa and Asia within ten years. The only real solution to this problem is a rapidly shrinking world population, so that gives you a clue what these wars will be like.
How will this effect you? Available foods are likely to change in price due to water requirements. Sheep and cows require 40 times as much water to produce a calorie of food as wheat. Cheese, chickens and goats require five times the water of wheat. Potatoes, corn and apples require less water than wheat. High grain diets have not proven very good for people, as they're tied to obesity and diabetes. Expect that to get worse as poorer people are pushed away from meats and towards more and more grains. Already Taco Bell ground beef is less than 40% meat; you can expect other fast food to follow this lead. For my generation the unofficial slogan was "follow the money." For my children's generation I believe it's going to be "follow the water."
Like eating fast food? 12-year-old Jasmine Roberts went to five fast food restaurants, ordered cups of ice and put them in sterile beakers. She also went into their bathrooms, flushed the toilet once, and collected a sample. Roberts said, "I found that 70-percent of the time, the ice contained more bacteria than the toilet water." The reason that the bacteria was more prevalent in the ice could be that while toilets are cleaned regularly, ice machines are not.
The post office hit their $15 billion debt limit and cannot borrow more money. In 2005 the post office had no debt; since then they've been sucking up loans from the taxpayers to pre-pay their retirement health care benefits. The post office is not allowed to borrow from banks (not that there's any bank that would loan to this bankrupt institution anyway), they have to borrow from the treasury. They're scheduled to run out of money roughly next April or May. Something will give - closing post offices, no more Saturday delivery, laying off workers, moving more retail operations from stand-alone buildings into small kiosks in supermarkets is all the stuff I would do, so I expect little of that to happen. I expect the onset of a recession next year, so I expect they're get an emergency loan so as to not lay anyone off. The post office has a "surplus" in their pension fund, expect them to dig into that.
The December 31st issue of Newsweek will be their last print issue. Soon only the NY York Times, Wall Street Journal, and USA today will be cutting down trees.
The Arctic ice has been increasing rapidly the last couple of weeks, and the passage from Maine to Alaska is now closed in the middle of Canada. However, the Coast Guard reports a significant number of sail boats north of Alaska, apparently making a north-west passage. The route from China to the UK and Germany along the Siberian coast is still open.
Election Watch: Romney is now ahead of Obama in most polls by a large enough margin that I believe I'm prepared to predict Romney will win the popular vote. However we don't elect presidents with polls, nor with popular vote. They're elected by the Electoral College. In electoral votes Obama maintains a slight lead and he's still winning. The race has sharpened up and it's really all about Ohio and Virginia now, mostly Ohio - "As goes Ohio, so goes the nation." Obama is still leading in Ohio and has just won a supreme court case about Ohio voting that may guarantee him the state and therefore the election. We could see a case where Romney wins the popular election rather handily, perhaps with as much as 51% - 52% of the vote, but Obama wins the electoral college vote and the presidency. This would be exceptionally bad for the stability of our country. Americans pride themselves on their sense of fair play, and this would rather strongly violate that sense. Political gridlock after the election could push us over the "fiscal cliff." Add in the persistent arguments about entitlements and immigration, and we could be looking forwards to some real civil trouble in this country. Coming up: the foreign policy debate, where Obama is vulnerable on the Benghazi attack in particular and Israel and the Arab Spring in general.