This is a note from David Newman, a nice looking + thinking friend, member of ISWA Board. He kindly permited me to publish his thoughts regarding global financial meltdown. I found theme very interesting and I am sure that all readers will do the same. Thanks a lot David and I hope that this will be just your first contribution...
"The impact in the real economy of this year's financial meltdown will now start to make itself felt. And we are all about to be hit by an economic tsunami.
The banks can no longer finance themselves through inter bank relations. This means they are without liquidity. They will not therefore be financing companies at risk, even for solid companies ordinary day to day financing is at risk.
Vulnerable companies in all sectors are now going bust; this will escalate rapidly in the next weeks. By the year end this will have caused a significant increase in unemployment worldwide. Solid companies have frozen new investments, either for lack of bank financing or due to adverse risk factors. Export led economies are equally vulnerable as their major markets shrink. We will see unemployment rise here too leading to widespread social unrest.
Those economies that have benefited from high prices of raw materials will be particularly hit as the investments made on the assumption of increasing prices became unsustainable.
The western economies have a varied capacity to react because some of them are overleveraged already and have no further lending capacity. Others are reasonably immune because they have small domestic economies based on services. Among the first are GB, Italy, among the second Ireland, Greece, Belgium.
Our individual investments will be worth much less, or even nothing, in the short term as housing and stock markets collapse and banks fail. Many of us will lose our jobs as companies fail, governments slash spending, consumers spend less.
The power of the western economies will be significantly reduced relative to the east and middle east, awash with years of accumulated export and mineral wealth. But the key will be to what point the western economies will be able to sustain their unemployed masses before social breakdown occurs.
The measure to protect savings accounts are necessarily limited; taxpayers payments to governments being used to guarantee taxpayers savings- the mathematics doesn't work if that guarantee needs to be given over a long term.
So what to do ?
A first reaction is to go out and celebrate ! What the hell. But after the hangover we've all got some very serious thinking to do, and our collective reactions will determine for how long the depression will last.
For those of us with debts, by dramatically cutting our spending we will contribute to an economic depression; by not doing so we are ignoring the reality of our individual vulnerability and will shorten the time in which our banks close the credit lines. For those of us with savings in the banks, it's a frightening period- are they safe ? Are they hell ! But what do you do with these savings ?
Interest rates will now fall dramatically and leaving money in the bank will mean seeing its real value decline. And it is this group which will inevitably lead us slowly out of the mess as they withdraw their savings and take advantage of cheap markets to buy- property and shares mainly.
It takes a brave man to invest today but the profits from doing so in the medium term will be extraordinary. Companies have stock values so low they are give aways; fire sales of houses make some properties incredible bargains. They will reach the point of the early 1990s when to buy a house cost less than to build a new one- then is the time to buy and the whole economy will start to move again. It's two years before this happens.
Two years in which we've all got to face insecurity, fall in spending power, actual or relative poverty. A dramatic response to a decade of over spending fuelled by cheap money and sheer greed.
One bright note: economic decline will mean the use of less resources and may actually benefit the environment. Take some comfort from that if you can !
David
October 6th, 2008"
10.07.2008
Some words about the global financial meltdown from David Newman
This is a note written by David Newman, member of ISWA Board. David sent it by e-mail and he kindly permited me to publish it
The impact in the real economy of this year's financial meltdown will now
start to make itself felt. And we are all about to be hit by an economic
tsunami.
The banks can no longer finance themselves through inter bank relations.
This means they are without liquidity. They will not therefore be financing
companies at risk, even for solid companies ordinary day to day financing is
at risk.
Vulnerable companies in all sectors are now going bust; this will escalate
rapidly in the next weeks. By the year end this will have caused a
significant increase in unemployment worldwide.
Solid companies have frozen new investments, either for lack of bank
financing or due to adverse risk factors.
Export led economies are equally vulnerable as their major markets shrink.
We will see unemployment rise here too leading to widespread social unrest.
Those economies that have benefited from high prices of raw materials will
be particularly hit as the investments made on the assumption of increasing
prices became unsustainable.
The western economies have a varied capacity to react because some of them
are overleveraged already and have no further lending capacity. Others are
reasonably immune because they have small domestic economies based on
services. Among the first are GB, Italy, among the second Ireland, Greece,
Belgium.
Our individual investments will be worth much less, or even nothing, in the
short term as housing and stock markets collapse and banks fail. Many of us
will lose our jobs as companies fail, governments slash spending, consumers
spend less.
The power of the western economies will be significantly reduced relative to
the east and middle east, awash with years of accumulated export and mineral
wealth. But the key will be to what point the western economies will be
able to sustain their unemployed masses before social breakdown occurs.
The measure to protect savings accounts are necessarily limited; taxpayers
payments to governments being used to guarantee taxpayers savings- the
mathematics doesn't work if that guarantee needs to be given over a long
term.
So what to do ?
A first reaction is to go out and celebrate ! What the hell.
But after the hangover we've all got some very serious thinking to do, and
our collective reactions will determine for how long the depression will
last.
For those of us with debts, by dramatically cutting our spending we will
contribute to an economic depression; by not doing so we are ignoring the
reality of our individual vulnerability and will shorten the time in which
our banks close the credit lines. For those of us with savings in the banks,
it's a frightening period- are they safe ? Are they hell ! But what do you
do with these savings ?
Interest rates will now fall dramatically and leaving money in the bank will
mean seeing its real value decline.
And it is this group which will inevitably lead us slowly out of the mess as
they withdraw their savings and take advantage of cheap markets to buy-
property and shares mainly.
It takes a brave man to invest today but the profits from doing so in the
medium term will be extraordinary. Companies have stock values so low they
are give aways; fire sales of houses make some properties incredible
bargains. They will reach the point of the early 1990s when to buy a house
cost less than to build a new one- then is the time to buy and the whole
economy will start to move again. It's two years before this happens.
Two years in which we've all got to face insecurity, fall in spending power,
actual or relative poverty. A dramatic response to a decade of over spending
fuelled by cheap money and sheer greed.
One bright note: economic decline will mean the use of less resources and
may actually benefit the environment. Take some comfort from that if you can
!
David
October 6th, 2008
The impact in the real economy of this year's financial meltdown will now
start to make itself felt. And we are all about to be hit by an economic
tsunami.
The banks can no longer finance themselves through inter bank relations.
This means they are without liquidity. They will not therefore be financing
companies at risk, even for solid companies ordinary day to day financing is
at risk.
Vulnerable companies in all sectors are now going bust; this will escalate
rapidly in the next weeks. By the year end this will have caused a
significant increase in unemployment worldwide.
Solid companies have frozen new investments, either for lack of bank
financing or due to adverse risk factors.
Export led economies are equally vulnerable as their major markets shrink.
We will see unemployment rise here too leading to widespread social unrest.
Those economies that have benefited from high prices of raw materials will
be particularly hit as the investments made on the assumption of increasing
prices became unsustainable.
The western economies have a varied capacity to react because some of them
are overleveraged already and have no further lending capacity. Others are
reasonably immune because they have small domestic economies based on
services. Among the first are GB, Italy, among the second Ireland, Greece,
Belgium.
Our individual investments will be worth much less, or even nothing, in the
short term as housing and stock markets collapse and banks fail. Many of us
will lose our jobs as companies fail, governments slash spending, consumers
spend less.
The power of the western economies will be significantly reduced relative to
the east and middle east, awash with years of accumulated export and mineral
wealth. But the key will be to what point the western economies will be
able to sustain their unemployed masses before social breakdown occurs.
The measure to protect savings accounts are necessarily limited; taxpayers
payments to governments being used to guarantee taxpayers savings- the
mathematics doesn't work if that guarantee needs to be given over a long
term.
So what to do ?
A first reaction is to go out and celebrate ! What the hell.
But after the hangover we've all got some very serious thinking to do, and
our collective reactions will determine for how long the depression will
last.
For those of us with debts, by dramatically cutting our spending we will
contribute to an economic depression; by not doing so we are ignoring the
reality of our individual vulnerability and will shorten the time in which
our banks close the credit lines. For those of us with savings in the banks,
it's a frightening period- are they safe ? Are they hell ! But what do you
do with these savings ?
Interest rates will now fall dramatically and leaving money in the bank will
mean seeing its real value decline.
And it is this group which will inevitably lead us slowly out of the mess as
they withdraw their savings and take advantage of cheap markets to buy-
property and shares mainly.
It takes a brave man to invest today but the profits from doing so in the
medium term will be extraordinary. Companies have stock values so low they
are give aways; fire sales of houses make some properties incredible
bargains. They will reach the point of the early 1990s when to buy a house
cost less than to build a new one- then is the time to buy and the whole
economy will start to move again. It's two years before this happens.
Two years in which we've all got to face insecurity, fall in spending power,
actual or relative poverty. A dramatic response to a decade of over spending
fuelled by cheap money and sheer greed.
One bright note: economic decline will mean the use of less resources and
may actually benefit the environment. Take some comfort from that if you can
!
David
October 6th, 2008
10.06.2008
Recycling Benefits Vs Transport Impacts: globalisation makes Life Cycle Thinking a Necessity
The rise of recycling rates in developed countries and the contemporary growth of China and other big Asian economies have created a global transfer network for recyclable materials. Only in 2007, 4.7 million tones of recovered paper and half a million tones of recovered plastics were exported from UK.
Everyone who is involved, even a little bit, in Solid Waste Management and Life Cycle Thinking, knows very well that there are two major findings:
· Recycling is useless without a facility, even far away located, to receive recyclables and drove them back to a new Life Cycle loop.
· The results of Life Cycle Analysis are strongly depended on the geographical boundaries of the system because for some materials regional, national or even continental borders are not enough to materialize the actual benefits of recycling.
As the Climate Change factor got more and more important in decision making, it became clear that the more the distance of transfer the less the global benefits from recycling. Due to the globalization process and the differential requirements for raw and secondary materials between developed and developing countries, a new question emerges: is it worth to recycle if the actual close of the material life-cycle loop will be thousands miles away?
Although we can be quite sure regarding the benefits of recycling, it is a question whether those benefits are traded - off if we take into consideration the CO2 emissions from recyclables transfer for thousands miles.
Trying to answer to that question is not a simple task, but under certain assumptions and limitations WRAP provided an answer in the new report:
“CO2 impacts of transporting the UK’s recovered paper and plastic bottles to China”
The report is available at http://www.wrap.org.uk/
The major finding is that CO2 emissions associated with transporting one tone of recovered paper from the UK to China are estimated to lie between 154kg and 213kg of CO2. The emissions associated with CO2 impacts of transporting the UK’s recovered paper and plastic bottles to China 4 transporting one tone of recovered plastic bottles range between 158kg and 230kg of CO2. These CO2 emissions levels represent less than a third of the carbon savings from recycling identified by a majority of the life cycle assessments (LCAs) reviewed in the study. This suggests that there are CO2 savings to be made from recycling, even if the recovered materials have to be transported to China.
Reading this interesting report I made some more general conclusions.
The result confirms something that we already know: in order to achieve significant benefits from recycling a global network should be developed for recyclables management and utilization. For this network we need a set of flexible but effective rules and regulations that will assure that what is gained locally by recycling will not be lost globally by inappropriate management of recyclables.
Like all the Climate Change issues, recycling either it will be a global practice or it will die. Once again the future of our planet calls not just for cooperation but for a global recycling consortium which will include all continents and all countries. Is that possible? The answer is unknown but ISWA has a very important role to play in order to make it a “Yes”.
And last but not least, in the era of globalization Life Cycle Thinking should be a minimum requirement in order to take decisions for environmental issues. Our planet has become too wired to avoid it…
Everyone who is involved, even a little bit, in Solid Waste Management and Life Cycle Thinking, knows very well that there are two major findings:
· Recycling is useless without a facility, even far away located, to receive recyclables and drove them back to a new Life Cycle loop.
· The results of Life Cycle Analysis are strongly depended on the geographical boundaries of the system because for some materials regional, national or even continental borders are not enough to materialize the actual benefits of recycling.
As the Climate Change factor got more and more important in decision making, it became clear that the more the distance of transfer the less the global benefits from recycling. Due to the globalization process and the differential requirements for raw and secondary materials between developed and developing countries, a new question emerges: is it worth to recycle if the actual close of the material life-cycle loop will be thousands miles away?
Although we can be quite sure regarding the benefits of recycling, it is a question whether those benefits are traded - off if we take into consideration the CO2 emissions from recyclables transfer for thousands miles.
Trying to answer to that question is not a simple task, but under certain assumptions and limitations WRAP provided an answer in the new report:
“CO2 impacts of transporting the UK’s recovered paper and plastic bottles to China”
The report is available at http://www.wrap.org.uk/
The major finding is that CO2 emissions associated with transporting one tone of recovered paper from the UK to China are estimated to lie between 154kg and 213kg of CO2. The emissions associated with CO2 impacts of transporting the UK’s recovered paper and plastic bottles to China 4 transporting one tone of recovered plastic bottles range between 158kg and 230kg of CO2. These CO2 emissions levels represent less than a third of the carbon savings from recycling identified by a majority of the life cycle assessments (LCAs) reviewed in the study. This suggests that there are CO2 savings to be made from recycling, even if the recovered materials have to be transported to China.
Reading this interesting report I made some more general conclusions.
The result confirms something that we already know: in order to achieve significant benefits from recycling a global network should be developed for recyclables management and utilization. For this network we need a set of flexible but effective rules and regulations that will assure that what is gained locally by recycling will not be lost globally by inappropriate management of recyclables.
Like all the Climate Change issues, recycling either it will be a global practice or it will die. Once again the future of our planet calls not just for cooperation but for a global recycling consortium which will include all continents and all countries. Is that possible? The answer is unknown but ISWA has a very important role to play in order to make it a “Yes”.
And last but not least, in the era of globalization Life Cycle Thinking should be a minimum requirement in order to take decisions for environmental issues. Our planet has become too wired to avoid it…
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