A DISASTROUS energy crunch is looming because most of the major oil fields in the world have passed their peak production, a leading economist has warned.

Fatih Birol, chief economist with Paris-based International Energy Agency (IEA), said such an “oil crunch” within the next five years could jeopardise recovery from the global recession.
Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could derail the recovery, Birol said in an interview with The Independent newspaper.
Mr Birol said many governments appeared unaware …

We now have the diametrical opposite of the famous “Peter Schiff Was Right” video (a compilation of 2006 and 2007 clips in which Schiff, a financial expert who subscribes to Austrian economics, predicted the deep recession that would follow the bursting of the housing bubble).
The new, opposite video is a compilation of the 2005–2007 prognostications of Federal Reserve Chairman Ben Bernanke. In it, Bernanke is shown to have been just as embarrassingly wrong as Schiff was uncannily right.
Could their differences in economic understanding have anything …

Who needs the GDP?

As if it wasn’t unpleasant enough, this recession comes with an info glut, all this economic data purporting to answer a simple question: Are things getting better? The answer is rarely straightforward. The numbers aren’t just confusing. They seem to be measuring some other planet.

In New York, we have our own economic indicators, often based on the degree to which people are being thwarted by the lack of opportunity. An old standby is the Overeducated Cabbie Index. The Squeegee Man Apparition Index is another …

American economists think the world can’t afford to let go of the dollar’s reserve currency status. The world is about to teach them differently.

What do China, India, Brazil, Russia, France and Germany have in common? These countries most often can’t agree on anything. But they are united in one strange—and ominous—way. They blame the United States for wrecking the global economy. And they think the dollar is the wrecking ball.
One rock-solid, foundational belief underpins almost all economic theory in America: faith in the dollar’s unassailable status as the world’s …

Luxury goods sector is being hit hard by the financial crisis

Profits at diamond firm De Beers have been crushed after demand for luxury products was hit by the recession.
The world’s largest diamond producer reported a 99% drop in net profits for the first half of 2009 this morning, to just $3m (£1.82m). It made $316m in the same period a year ago, before the economic downturn deterred even the wealthy from splashing out on non-essentials.
De Beers blamed an “extraordinarily difficult” trading environment for the slump in profitability. Sales of …

Joseph Stiglitz predicted the global financial meltdown. So why can’t he get any respect here at home?

. . . Such is the lot of Joe Stiglitz. Even in the contentious world of economics, he is considered somewhat prickly. And while he may be a Nobel laureate, in Washington he’s seen as just another economic critic—and not always a welcome one. Few Americans recognize his name, and fewer still would recognize the man, who is short and stocky and bears a faint resemblance to Mel Brooks. Yet Stiglitz’s work is …

And how the discipline should change to avoid the mistakes of the past

OF ALL the economic bubbles that have been pricked, few have burst more spectacularly than the reputation of economics itself. A few years ago, the dismal science was being acclaimed as a way of explaining ever more forms of human behaviour, from drug-dealing to sumo-wrestling. Wall Street ransacked the best universities for game theorists and options modellers. And on the public stage, economists were seen as far more trustworthy than politicians. John McCain joked that Alan Greenspan, …

Our fascination with pearls is thousands of years old—no other gem has been so loved, for so long, by so many. But is today’s pearl industry in danger of becoming a victim of its own success?

In the matter of conspicuous consumption, as in so much else, we struggle to outdo the ancients. Cleopatra, who lived more than 2,000 years ago, would have had Marie-Antoinette for breakfast. Then Imelda Marcos for elevenses and Barbara Amiel for lunch. If you doubt it, consider what she once had for dinner.
Pliny the Elder …

Numerous articles have been appearing about what is wrong with the current economic system. Usually the solution proposed is to adopt a gold standard. Here are the components of a system that combines the best of a gold standard (eliminating lasting inflation) with the flexibility required in today’s world and utilizing modern technology. This approach can create transparency, fairness and stability in government:
Match tax with spending: Tax collected at the end of a period should EXACTLY reflect the amount of government spending that occurred during that period.
Eliminate Fractional Reserve …

Office building down 57 percent off peak

A downtown San Francisco office building that sold for $400 a square foot in 2006 has traded for just $172 a square foot, a 57 percent decline that industry experts see as an important milestone in establishing new, recession-era values for financial district property.
A private equity fund controlled by an unidentified “domestic billionaire” has paid $19.9 million for 250 Montgomery St., a 116,000-square-foot building on the corner of Pine Street that Lincoln Property Co. bought for $46 million in 2006. Technically, the buyer …

The US economy is lurching towards crisis with long-term interest rates on course to double, crippling the country’s ability to pay its debts and potentially plunging it into another recession, according to a study by the US’s own central bank

In a 2003 paper, Thomas Laubach, the US Federal Reserve’s senior economist, calculated the impact on long-term interest rates of rising fiscal deficits and soaring national debt. Applying his assumptions to the recent spike in the US fiscal deficit and national debt, long-term interests rates will double from their current …

You know the economy is in trouble when the good news is unemployment increased at a slower rate and pending home sales stood basically still all month. Brace yourself because it looks like the “good news” is going to get much worse, too.
Home prices appear to be approaching a valley, though no one can know for sure if they are near a bottom or if they have further to drop. However, credit is still hard to come by, and it is becoming more expensive as interest rates rise on …

Headed this week to the Grand Canyon in our old Winnebago RV (now minus mice, we think) Mary Alyce, the boys and I stopped outside Kingman, Arizona at this place, freshjerky.com, managed by Gus, whom you’ll find pictured below, handsome devil that he is. And that’s Mary Alyce taking pictures of the boys in the Freshjerky parking lot at left.
Just as the sign says, Freshjerky has a limited product selection — various kinds of meat jerky including buffalo; honey (minus “expanders,” whatever those are); olives; nuts, and cold drinks. …

O.K., Thursday’s jobs report settles it. We’re going to need a bigger stimulus. But does the president know that?
Let’s do the math.
Since the recession began, the U.S. economy has lost 6 ½ million jobs — and as that grim employment report confirmed, it’s continuing to lose jobs at a rapid pace. Once you take into account the 100,000-plus new jobs that we need each month just to keep up with a growing population, we’re about 8 ½ million jobs in the hole.
And the deeper the hole gets, the harder …

General Motors is using its huge pension fund in a way it never intended.

It had planned — and put money aside — for a steady march of retirees over time. But instead, tens of thousands of blue-collar workers, most in their 40s and 50s, are all becoming eligible for retirement benefits now, as the company rapidly downsizes.
And even as its pension fund faces this giant bulge in payouts, G.M. is not putting any new money in — the company is not required to make any contributions to the fund …

The announcement that luxury shoemaker Jimmy Choo is creating a limited-edition collection for the bargain merchant H&M makes one wonder whether the high-end fashion market will survive the economic crisis.
If the luxury market does survive, it certainly won’t be as dazzling. Bargain designer shoes will sever the connection between product and fantasy.
Jimmy Choo shoes rose to prominence thanks to an abundance of red-carpet appearances on the feet of starlets. Choos accessorized the lemongrass-colored ensemble first lady Michelle Obama wore on Inauguration Day. And a significant percentage of the brand’s …

In the midst of financial apocalypse, the gadflies and gurus of the global marketplace are gathered at the San Francisco Hilton for the annual meeting of the American Economics Association. The mood is similar to a seismologist convention in the wake of the Big One. Yet surprisingly, one of the most popular sessions has nothing to do with toxic assets, derivatives, or unemployment curves.
“I’m going to talk about online auctions,” says Hal Varian, the session’s first speaker. Varian is a lanky 62-year-old professor at UC Berkeley’s Haas School of …

Four states have felt the joy of housing appreciation and the agony of the housing bust in a very deep and extreme way. Without a doubt, this economic crisis is touching every corner of the global economy but four states have seen the multifaceted punishment of this housing and credit bust. Those states are California, Florida, Nevada, and Arizona and these past days I was able to see first hand three of the states. Spending time in these few states and contributing my own economic stimulus to these economies, …

U.S. home prices showed no signs they’ve hit bottom, according to a series of national indexes released today. The Standard & Poor’s/Case-Shiller national home price index showed a record 19.1% drop in home prices for the first three months of this year.
Los Angeles area home prices, which include Orange County, were down 41% in March from their 2006 peak. Los Angeles is one of 10 metro areas down more than 30% from its peak price level, with Phoenix’s 53% decline in March from its peak the most severe. (Read …

LIVERMORE, Calif. — Here in a dry California valley, outside a small town, a cathedral of light is to be dedicated on Friday. Like the cathedrals of antiquity, it is built on an unrivaled scale with unmatched technology, and it embodies a scientific doctrine that, if confirmed, might lift civilization to new heights.
“Bringing Star Power to Earth” reads a giant banner that was recently unfurled across a building the size of a football stadium.
The $3.5 billion site is known as the National Ignition Facility, or NIF. For more than …