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The end of the year is just passing now. The winter solstice occurs at about noon (GMT) today (21 December). That’s the nadir of the solar cycle, when the angle of the sun is most acute on the axis of rotation of the earth. Today is the shortest day of the year in the northern hemisphere, the longest in the southern. We’ll enjoy watching the days lengthen in the coming weeks, though today we’re enjoying sun and an almost balmy 12 oC - as warm as it was for too many days this past summer. I think we can look forward to a warmer, drier 2009. Though its increasingly a guessing game as the planet exhibits symptoms of pneumonia - warm and cool in the wrong places.

The winter solstice has been a time for celebration since the beginning of civilisation in all corners of the world. There are many celebrations observed with winter solstice including Christmas, Yule, the Islamic New Year, the Mysteries of Mithras, Hogmanay and even more winter festivals not necessarily associated with the solstice. The one I’m most familiar with is Christmas. I’ve grown to have mixed feelings about Christmas because the sentiment of giving has been superseded by the sentiment of getting. But Christmas is an opportunity to create some magic at home, especially for children, to forgive and make peace. Even if you’re not Christian, you can still get that good feeling that comes from giving love and comfort to friends, family and even strangers down on their luck. Children love to decorate a tree, even making their own ornaments. And they can be enthusiastic about making presents - I’m amazed to see my children making gifts for their friends and teachers. And I love to watch Christmas movies with my family - my favourite is Scrooge (1970) or A Christmas Carol (1984), even Scrooged helps evoke the spirit of giving in the hardest heart. Dickens surely could tell a story well.

We’ll be having a little party to welcome the new year and if you’re free you would be very welcome. On 30th December we’ll go for a walk in the woods from 2pm, then have a hot drink and snack in The Shed at 4pm. Please drop me a line if you can make it.

The economy is weighing more heavily on people’s minds as each week passes. The worst aspect of the money-go-round stopping is that people are losing their jobs. I hope the people that can make a difference to this situation act soon. But the system change that we need requires new thinking that just doesn’t seem to be occurring in the heads of governments. Here are a couple of YouTube videos that give a light look at what’s going on. One is from the 1930s and shows that things haven’t changed that much (-Vintage pro-inflation propaganda). The other is more recent and shows that the immediate solution to the stagnation of economic activity (fiscal stimulus) is not really a solution (- Fred Thompson on the Economy), but a band aid until we can restructure behaviour. And to show what that change in lifestyle means, here’s a short film about how one can live live more lightly on the planet, while saving money and improving one’s lifestyle - The Solar House.

Here in Ireland we got a bit of scare as authorities pulled pork off the shelves due to a scare about dioxins in pig feed. Coincidentally CIWF came out with a report that shows that Europe’s pigs are being farmed in horrendous and often illegal conditions. The Europe-wide investigation into pig welfare standards reveals shocking images of barren pig pens with European law frequently broken ( - Revealed: the state of Europe’s pigs (report & video) and The Independent coverage of our investigation). That probably doesn’t surprise anyone who remembers the mad cow disease scare (BSE), bird flu or salmonella scares. And it shouldn’t surprise anyone who knows anything about food production - it’s so industrialised one wonders how these creatures could be healthy. It turned out to be a bit melodramatic so we can all enjoy our Christmas ham :-).

Well, enough drama. Let’s be positive. You don’t have to spend to have a good time. And maybe some of the measurements we use aren’t that good anyway - after all we never count the work of parents (mostly mothers) in nurturing children, feeding family and creating a warm home (until they get a “job”!), but it is surely is valuable, worthy work. We’re in a better position than ever to enjoy life - we have the things that we need (no that does not mean an Xbox 360) and now that we’re not so distracted by “chasing the train” we can get back to enjoying our friends and family. Have a wonderful and fun Christmas. Come for a walk and a cuppa on the 30th if you’re free. And be positive in 2009.

Best wishes from us all at Ballin Temple,

Tom

Maybe it’s about time for a reminder about climate volatility. Recently I browsed a set of satellite photos which illustrate the extraordinary pressure we are putting on our planet, evidenced by climate volatility.

The first two show the wasting if the Humbolt glacier, the third shows snow covering the southern USA. (Click the images to read more background.) It’s as if the planet has pneumonia.

The UN has not agreed yet that decriminalisation of sexual orientation is an appropriate step towards adoption of the universal declaration of human rights.  While the majority of countries voted to decriminalise homosexuality, a significant number of conservative governments did not want to have anything with the motion.  Homosexuality is a criminal offence in more than 80 countries, while in at least seven nations, including Saudi Arabia, sex between men can be punished with the death penalty.  Not a very enlightened perspective - prefering death to love - in a world of such sophistication.

BBC - UN split over homosexuality laws

This recent story of a $ 50 billion pyramid scheme that duped supposedly competent investors and banks is just another symptom of the moral hazard that has dominated economics for the past decade.

All of these banks and investors that lost millions fooled themselves.  They are supposed to be competent fiduciaries, and were paid for expertise and integrity.  But when they were offered something that was too good to be true they believed it.

This scam is just like the sub-prime mess, except that it is even simpler.  At least with the sub-prime pyramid people knew they didn’t understand what they were buying into, and that was their error.  In this case, they were told we’ll give you consistently high returns for low risk.  That just doesn’t happen.   Never has, never will. It is natural for things to even out, even in an inefficient human financial system.

These banks pay people lots of money to ask simple questions like “how?” and then to be skeptical when the numbers don’t fit with reality.  These investors, banks and advisors have only themselves to blame, even if the regulators did mess up.  And the higher they are in the pile, the more blame should stick to them.  It’s like a tragic fairy tale of greed, except the evil, greedy merchants are not going to suffer much because the peasants will take the brunt of the pain.

BBC: Banks hit worldwide by US ‘fraud’

BBC: Madoff relied on ‘irrational euphoria’

The US FED has dropped interest rates to the floor: zero to a quarter of a percent.  That probably won’t have a big impact, except short term (a day or so)  on stock market sentiment.  But if banks aren’t actually lending to businesses, then its not going to stimulate economic activity.

So, maybe negative rates would help.  “We’ll pay you to borrow our money.  But you’ve got to promise to lend it out.” It might be cheaper, more efficient and more effective than a fiscal stimulus.  Though a fiscal stimulus is needed too.

As we’ve noted for months, the interest rate is not what’s going to make or break the economy.   The behaviour of players in the debt and equity markets is.  And right now, they’re hardly even playing at all which is why the economy is stagnating.

Most of you still use Microsoft’s questionable products, including Internet Explorer, so this is very relevant to you.

A serious security flaw has been found in IE which makes all your security files vulnerable to hackers.  Security experts have warned that IE should not be used till the fix is implemented.

Read the BBC news alert here: Serious security flaw found in IE

This would be particularly relevant if you work in a bank or similar security conscious business.

Use Mozilla’s Firefox or Seamonkey instead.   They are better and free.

New genetic research suggests that the brain has a significant role in controlling obesity, far more so than metabolism.  However, the research suggests that one’s natural genetics do influence the propensity to build body fat, but that propensity is a brain physiology rather than metabolic.

It remains true that a healthy lifestyle leads to a healthy body and an unhealthy lifestyle rapidly develops an unhealthy physique.

BBC report Obesity ‘controlled by the brain’

Hertz, which buys half a million cars annually is about to launch a car club to serve people that live in cities and would like access to a car without teh cost and trouble of owning one.  This initative is very encouraging.  If it works well it should remove cars from the streets of cities, increase public transport use and even reduce the weight of vehicles on the roads as people share the ownership of cars.  It may also encourage more environmentally benign vehicles as the car club will be able to afford higher specification vehicles.  And because Hertz is doing it, others are likely to follow sooner rather than later.

BBC’s report is here.

Attention to the school curriculum in the UK has produced recommendations for changing the system. Change is good, but it appears that the proposals may eliminate important aspects of formal education and fail to provide life skills as well as fail to give factual knowledge.

Two articles from the Economist outline the problems:

In praise of facts, The British government’s latest crack at reforming schools is yet another step towards contentless learning

and

Please, sir, what’s history?, A missed chance to make hard choices about what children should learn

It is unfortunate that the attempt to improve education has failed to retain the benefits of the industrial approach, has failed to reflect the emotional as well as the cognitive aptitudes and has failed to learn from the proven methods of educators like Pestalozzi - the “founder of modern education” and Steiner who seeded Waldorf schools.

Also relevant is How to build a better education system - lessons from around the world

You’re right to try to be optimistic. Or at least positive. A positive outlook helps keep spirits up, helps avoid despondency. despondency can be the worst because then you just stop doing anything and sink in to a mire of desperation.

But optimism about the outlook could be even more dangerous. It could result in further losses because you base your expectations on a scenario which fails to materialise. The best approach is realism. That should be based on sound analysis of the data available and an evaluation of sentiment. Right now the realistic outlook is not good. The best historical benchmark we have for what is happening today is the Great Depression. Back then the image is of soup kitchens. And that picture is likely to re-emerge sooner than we would like because of two serious issues which have no immediate solution - the gaping hole in the credit markets and the rapidly rising unemployment of people.

Look around you and talk to your friends. People are losing their jobs daily. And many of those people have little savings or those savings are tied up in property (illiquid and valued below cost) or stocks (valued below cost). People need to eat. Without food anarchy ensues. People can not grow their own - they mostly live in urban areas - so they must be given food. So expect to see food aid in developed countries.

I just paint that picture in case you are feeling too optimistic. You should base your expectations on reality so that your strategy for survival, and hopefully helping others, is based on sound judgement.

I certainly hope that economies reliquify soon and people start getting jobs again. If that happens then solutions will be easier. but there are few signs yet that fiscal stimulus is being applied or that it is working. The numbers coming out continue to be bad. (For example, today’s headlines: US faces deep problems, OECD says and World Bank predicts global gloom.)

It appears that solutions are going to have to occur at the local level, because governments are stymied. So let’s hope for community supports and local incentives to restart the credit markets. Be positive, and realistic.