Cyreenik Says
This week I read a couple of interesting articles that may indicate a time of dream changing is coming. As in, my truism "Recessions are times of dream changing." (covered in this essay)
The pair of interesting articles are in The Economist:
The first is this 25 Oct 15 article, A fork in the digital road, which is about how the big tech companies of the last couple decades seem to be at the end of their big growth eras.
From the article, "More fundamentally, however, the IT industry is rapidly maturing, with overall annual revenue growth reaching only 3%, says Sebastian DiGrande of Boston Consulting Group. Although some parts, such as cloud computing and all things mobile, are expanding rapidly, the biggest sectors, including most hardware, business software and IT services, are growing slowly or even shrinking And these are dominated by big technology firms such as HP and IBM."
The second 25 Oct 15 article, Switching channels: More signs that the TV business is set for a profound upheaval, discusses a similar maturing trend in the TV cable business.
From the article, "Viewers have long wanted to pay only for the channels they watch, not the bundle that cable companies foist upon them. Television executives have resisted, rightly fearing that doing away with the bundle could tear apart a business with annual revenues of around $150 billion. Unlike newspapers and the music industry, which saw their businesses sink with the rise of the internet, change has come gradually. So far the TV industry has been a story of powerful and rich characters intent on keeping things just as they are."
It may be that we are about to enter a time when the current positive feedback industries (my term) lose their positiveness and we will all have to look for new ones to support.
I talked about this in the July Cyreenik. This 23 Oct 14 WSJ article, Russia and West Grapple With Alternate Realities It Isn’t Just Opinions That Differ, But Facts Too by Stephan Fidler, goes into more depth about the divide between what Russians hear and what The West hears about current events.
From the article, "When the chairman and chief executive of Total SA, Christophe de Margerie, was killed this week after his private jet hit a snow-removal truck on takeoff from a Moscow airport, it looked like an accident.
Russian television viewers were treated to a different version. According to a top Russian television channel, a plot by the Central Intelligence Agency couldn’t be ruled out.
The report illustrates a development that is becoming increasingly evident: Russians and Westerners are talking past each other. It isn’t just that they have different opinions about the same event; it is that they believe in a different set of facts."
This, again, is a symptom of ruthless leadership and why this governing style can perpetuate itself in the face of increasing delusion: for community members who listen to ruthless leadership-controlled news, there is no delusion!
Diseases come and go, but thanks in large part to media hype of the last month or so Ebola is going to come and cause Americans to make big, expensive mistakes... "Blunders" as I define them. This 17 Oct 14 WSJ editorial, Who Do They Think We Are? The administration’s Ebola evasions reveal its disdain for the American people. by Peggy Noonan, outlines well the confused responses caused by the high emotions involved. (Peggy is good at expressing emotions.)
From the article, "The administration’s handling of the Ebola crisis continues to be marked by double talk, runaround and gobbledygook. And its logic is worse than its language. In many of its actions, especially its public pronouncements, the government is functioning not as a soother of public anxiety but the cause of it."
Expect Blunders over the next few months: actions which feel very right, but in retrospect, or looked at from a cool-headed perspective, are very expensive to conduct and don't solve the problem.
It's blunder time, folks!
Update: Here is an example of a smaller blunder. This 16 Oct 14 Cleveland.com article, Strongsville schools will scrub buildings weekly in response to Ebola threat by Bob Sandrick, describes a response in Ohio to the worry.
From the article, "STRONGSVILLE, Ohio -- The Strongsville schools will scrub each school building weekly in response to the Ebola threat, although there have been no confirmed Ebola cases in Ohio.
...One superintendent asked the state officials what schools can do to be proactive and keep Ebola out of their districts.
"The answer was, 'Nothing,'" Krupinski said. "Unless there is documented evidence of a confirmed case, there is no need to be alarmed."
Nevertheless, Strongsville schools are ordering additional medical supplies, including surgical gloves and quaternary disinfectant cleaners, Donnelly said. The district will scrub doorknobs, desktops, keyboards, phones, bathroom fixtures and other commonly-touched items in each school every Friday."
This is an example of expensive and distracting action being taken in response to a scary, novel situation: it fits my definition of a Blunder.
This 12 Oct 14 WSJ article, Oil’s Decline: Enemy of the State by Liam Denning, talks about currently declining oil prices and how those will effect state-owned oil companies.
From the article, "In the past month, as Brent has fallen by about 10%, shares in Russia’s Rosneft and PetroChina have both tumbled by about 13%. In contrast, Exxon Mobil is down less than 5%. And many state-backed oil companies, especially those in Russia, Venezuela and Mexico, have high debt levels. In a crunch, that could end up the government’s problem; after all, national oil champions really are too big to fail."
This means that one surprise result of an oil price decline may be weakening Putin's hold on Russian opinion. He is not transforming the Russian economy which means his popularity depends heavily on the cash that oil and gas bring into the national coffers. This means declining oil prices can bite him even harder than sanctions.
Update: This 14 Oct 14 WSJ article, Global Oil Glut Sends Prices Plunging U.S.-Led Wave of Crude Threatens Stability of Some Countries While Providing Lift to Others by Russell Gold, should have Putin shaking in his boots. From the article, "The same factors that sank prices Tuesday are behind oil’s four-month tumble, which is pressuring countries from Russia to Iran to Venezuela. World-wide demand is stagnant, and the International Energy Agency cut its full-year oil-demand growth forecast Tuesday to the lowest level in five years." (related article)
The Syrian War is a surprising one. It is a proxy war, that's why the death and destruction per capita is so high. But why it has attracted such a wide range of enthusiastic participants has been a mystery.
This month I had an "Ah-Hah!": The Syrian War is the "blood-letting war" for the Arab Spring movement.
The Blood-letting War is a concept I came up with earlier this year. It describes the war that follows a social revolution. (here is a fuller description) When the Arab Spring started and Egypt started toppling governments I was expecting a strongman to take charge there and the Blood-letting War to erupt between Egypt and Israel. That scenario has not appeared. But life is full of surprises and, lo and behold, it is Syria that has become the blood-letting battleground for the Arab Spring!
What does this mean? It means that when the fighting winds down in Syria it will likely be followed by several years of peace in the region -- the people, and the proxy supporters, will have all had their fill of glorious "for the cause!" violence for a while.
What now has to happen is for the proxies supporting the various sides in Syria to get tired, and take their baseballs... er... RPG's home. Then peace will come, and it should be a lasting one.
-- The End --