US and Europe Downgraded: Who is Surprised?

The International Monetary Fund has downgraded its economic outlook for the US and Europe. No surprise. The only rational question is: "Has the IMF downgraded these profligate nanny state losers enough?"

"The global economy has entered a dangerous new phase," said Olivier Blanchard, the IMF's chief economist. "The recovery has weakened considerably. Strong policies are needed to improve the outlook and reduce the risks."

The IMF has also lowered its outlook for the 17 countries that use the euro. It predicts 1.6 percent growth this year and 1.1 percent next year, down from its June projections of 2 percent and 1.7 percent, respectively.

The gloomier forecast for Europe is based on worries that euro nations won't be able to contain their debt crisis and keep it from destabilizing the region.

"Markets have clearly become more skeptical about the ability of many countries to stabilize their public debt," Blanchard said. "Fear of the unknown is high." _APFinance_Yahoo

A closer look at Europe by a Wall Street Journal piece, reinforces the gloomy outlook for Europe's economic future:

What comes next is the explosion of the European project. Given what European leaders have made of that project over the past 30-odd years, it's not an altogether bad thing. But it will come at a massive cost. The riots of Athens will become those of Milan, Madrid and Marseilles. Parties of the fringe will gain greater sway. Border checkpoints will return. Currencies will be resurrected, then devalued. Countries will choose decay over reform. It's a long, likely parade of horribles. _WSJ

Making Europe's future appear even more dismal, is the continent's ongoing demographic collapse, and its apparent determination to commit energy suicide. Debilitating debt, demographic decline, and suicide by energy starvation....a sad outlook indeed.

Mish elaborates on the likely dissolution of the Eurozone

Greece is facing a 100% probability of default. Portugal, Ireland, Spain, and Italy are lined up in the cross-hairs.

The US is not the only nation with a corrupt, Chicago-mob style administration. But if the US stumbles under an insane load of debt and government dysfunction, the rest of the world will certainly suffer for it.

Perhaps the world deserves that blowback, given how badly the nations of the world apparently wanted Obama to be elected. But that is no reason for American voters to prolong and intensify their own agony beyond what is necessary to learn important lessons.

When BRICs Crumble, Will Commodity Prices Collapse?

Common wisdom assumes that commodity prices, including oil prices, will continue to rise on exponential demand from emerging nations, such as China, India, Brazil, Turkey, Russia, etc. But under the sheen of those rosy projections, exists a growing excremental stench of corruption and decay. If the magical trajectory of the BRICs should falter, how far would commodities prices fall? And what would be the repercussions for already stressed world financial markets, desperate for safe havens and hedged to the hilt?

China's property bubble is set to implode, and when it does, the Chinese economy will cool far more than anyone thinks, taking commodities along for the ride. Commodity producers like Australia and Canada are at extreme risk as well. _Mish

Not just Australia and Canada are at extreme risk. Two BRICs -- notably Russia and Brasil -- are gambling on continued high commodity prices into the indefinite future. Corruption in all of the BRICs is hampering genuine market-based growth, but economic dependence on raw commodities prices is particularly bad in Russia.

When commodity prices dive, Russia may well grow desperate.

Prime Minister Vladimir Putin, the country's uncrowned czar, has linked his legitimacy to the economy's performance by offering the Russian people a grand bargain: submit to his increasingly autocratic rule and the state will compensate with economic goodies like higher incomes and hefty social-welfare spending. Now that the economy is faltering, Putin is under intensifying pressure from a discontented public to restore Russian democracy, potentially destabilizing Russian politics. He has already faced protests in Moscow against his rule amid the economic downturn. There's also a risk that leaders in Moscow will resort to nationalistic appeals to distract the public from problems at home, escalating tension with Russia's neighbors, the rest of Europe and the U.S. _Time

Russia's ongoing demographic collapse, and the threat of losing much of Eastern Siberia to Chinese influence, is not helping the mood in Moscow. But without the clout that comes from high energy prices, Russia becomes an angry dancing toy bear with nuclear weapons.

Venezuela, Iran, the Arab states of MENA, Mexico, and many countries in tribal Africa and Asia, are also pathologically dependent on high commodity prices, due to internal corruption having squeezed natural markets to death. How will their people deal with the many difficulties and hardships they will face when their governments cannot feed, clothe, house, or water them?

Even the US is vulnerable to a fall in commodities prices. The US is the world's third largest oil producer. The recent boom in US shale oil & gas production is one of the few bright lights in an otherwise dim Obama economy. And although the jobs, housing, manufacturing, and other sectors in the US economy continue to sag, Obama has not had enough time to entirely destroy the US private sector.

Few readers of this blog understand the precarious state of China's economic house of cards. That is because almost all of the economic information coming out of China is closely controlled, and coated with a shiny facade. But it is time for readers to begin asking themselves about the global repercussions of a more sustained commodities price slump than they have seen.

Debt and Demographic Decline Breed Global Instability

...leading economies, the U.S., Japan, and the E.U. are declining. That is, about one-sixth of the world's population is losing ground. These big economies are the ones that lead the rest of the world, including China. Countries like China, India, and Brazil, depend on the health of the big economies to keep buying their products and commodities so they can grow and generate wealth for their citizens. _ZeroHedge

Who will be the last man standing? In the coming clash over debt, both within and between nations, what country -- or portion of a country -- will survive and prosper? Difficult to say, given the ubiquity of the deadly duo: debt and demographic decline.

In Europe, one can locate particular problem points, where endebted nations are reaching the end of their borrowing capacity. These nations are coming flashpoints for a fire of unrest that could explode out of control with incomprehensible haste.

A visit to Spain the prior week demonstrated that Greece's financial woes were just the tip of an iceberg on a continent of debt -- the Greek national debt crisis seemed like the first card in a flimsy house. To be in a nation as it is unraveling has an eerie, surreal, mostly indescribable feeling. The storefronts in Athens outside of the tourist areas looked like they'd been through several rounds of a boxing fight, and were just waiting for the knockout punch. Other than the lights being on, the difference between shops closed indefinitely and those currently operating were hard to distinguish. Unless they were pushing merchandise, people wore saddened expressions as they walked by decaying and graffiti-covered buildings. _thetyee

In such environemnts, deadly, destructive riots are always just a spark away. There is no telling where the next upsurge of violence and mayhem would end.

The situation can only get worse, since nobody's interests align. The Greeks want more time to meet their budget targets without having to make more cuts that would cause more public angst. The Germans, whose opinions arguably matter the most since they have the financial ammo, are already in a huff with German Chancellor Angela Merkel about expanding the eurozone's bailout fund. More pushback from Greece about meeting its current austerity measures only fuels the fire. _Time

Towards the end of the last decade, it was popular to proclaim Europe as an example of what we in North America could achieve. This notion was led by books such as Jeremy Rifkin's The European Dream, which described the difference between North American and European values. He argued that on the other side of the Atlantic, citizens found security not through individual accumulations of wealth but through connectedness, respect for human rights and sustainability. _the tyee

But now, as Europe's demographics collapses in on itself, we can see that not even utopia can escape the twin demons of debt and demographic decline and collapse. Europe's states are like teetering dominos, as long as they are coupled together economically. But even if Europe is smart enough to decouple, only select portions of the continent can survive the coming wildfire.

In the third world, we will have "The Coming Anarchy." In the developed world, the anarchy will focus on the third world enclaves, the multicultural cities and non-assimilating banlieus, and spread out from there.

Consider the relative places of safety, where you might find a place for yourself and your families. Hope for the best, prepare for the worst.

Previously published on abu al-fin

Global Control of Economic Super-Network

Brian Wang links to a 36 page PDF report which attempts to tease apart the tangles of the global financial super-network of control. Who is pulling the strings of global economies and governments?

36 page PDF at ArXiv

In 2007, a mere 147 companies controlled nearly 40 percent of the monetary value of all transnational corporations, researchers report in a paper published online July 28 at arXiv.org.

...The structure of the control network of transnational corporations affects global market competition and financial stability. So far, only small national samples were studied and there was no appropriate methodology to assess control globally. We present the first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player. We find that transnational corporations form a giant bow-tie structure and that a large portion of control flows to a small tightly-knit core of financial institutions. This core can be seen as an economic "super-entity" that raises new important issues both for researchers and policy makers. _NBF

NBFThe superentities listed above exist in order to acquire more control so as to climb ever higher on the ladder and especially to avoid dropping to a lower rung. In order to achieve this goal, superentities must maintain close connections with national governments around the world, and with supranational and multinational entities of all kinds.

At this level of action, all is fair as long as one is not caught or punished too severely.

Libertarians typically focus their efforts against government regulations, taxes, and controls of all kinds -- because government entities are a more immediate problem and conern. But multinational and supranational entities can cause severe limitations of freedom just as surely as local, regional, and national governments. But the superentities must act through the authority of local, regional, and national governments -- which is a key point.

These superentities could not exist without the complicity and cooperation of national governments. Powerful individuals frequently occupy positions of authority in either governments, multinational entities, international agencies, or superentities -- at any given time. The movement of persons of influence at these high levels of power, between these various power structures, is quite fluid.

Popular media tends to ignore the actual wielding of power, in favour of circus side shows to keep the public's attention occupied. The public, of course, is complicit in the entire charade, and would apparently prefer to be kept in the dark so as to avoid responsibility on a personal level.

Men of peace have long dreamed of a supranational entity which could limit the power of governments to make war on each other, or on their own people. High hopes were placed in the League of Nations after WWI, and in the United Nations after WWII. But what has evolved instead of a world government is a shadow network of superentities which exert significant -- although not total -- control of most of the world's governments.

As noted, competition within this network can be fierce and brutal. While the supernetwork would generally prefer to handle differences via established channels, there is always the possibility that a superentity will consider the risk of limited war to be acceptible.

Larger wars would upset the balance of power unduly, and are generally discouraged by the supernetwork. This attitude is important, given the large influence which superentities exert upon national governments.

But if something unexpected were to come along to potentially upset the balance of power, it is possible that a portion of the supernetwork would be willing to go to war on a large scale pre-emptively, to maintain its clout. Issues of war and peace are often considered, like other bargaining pieces on the table, albeit behind the scenes and secretly.

If these ideas make you uncomfortable, your best means of protecting yourself is probably via your representative government. But since governments are so deeply interconnected with supranational entities, your task will be very difficult if you actually want to change anything about the influence of the supernetwork on your life.

Best to start with your own situation, then work outward from there. Take care of things -- and make suitable preparations -- on a local level first. Then proceed as you can. Take your time. If you are old, try to inform persons of the younger generation, so that they can work to expand personal freedoms in the future.

Superentities exist in many forms -- not just as financial, commercial, and industrial powerhouses. The environmental-political complex has become a global superentity with enormous influence and power -- a significant threat to personal freedoms. It must be considered along with the rest. And so on.

Hope for the best, but prepare for the worst. In general, group action is more effective than individual action. Focus on what you can do, not on what you can't.

BRICS: A False Economic Dawn?

The economies of the western world are struggling to emerge from an ongoing crisis of their own governments' making. Big global investors have placed much of their hopes on the BRICS nations: Brazil, Russia, India, China, and (sometimes) South Africa. All of the BRICS face serious problems, both domestically and regionally. Is it wise to base one's investment hopes on countries which are facing so much turmoil of all kinds?

Poverty
Poverty is a dangerous problem for any country to have, as it not only prevents people from maximizing their potential, but it also represents a dangerous store of resentment and potential political instability. Poverty is a significant issue in Brazil and India, as roughly one-quarter of those populations live below their country's poverty lines.


Unequal distribution of wealth is a similar problem, and perhaps even more problematic from an investment statement as a voting populace may look towards politicians that promise to address this inefficiencies with business-unfriendly practices (as has happened in Venezuela). Brazil scores very high on lists of inequality (as measured by the Gini coefficient), and China is quite high as well (many people do not realize how poor the Chinese living in the countryside are). In comparison, Russia and India are much closer to the standards of the Western world in terms of income distribution.


Corruption
Where there are poor people and histories of authoritarian governments, there is often corruption as well. By its very nature, corruption does not usually leave a clear paper trail, so measuring it is difficult. Transparency International's Corruption Perceptions Index may not be a perfect methodology, but its insights are interesting all the same.


Brazil's ranking of 69 is too low to be seen as good, but it is the best among the BRICs - Russia scores the worst at a very low 154, while China and India come in at 78 and 87, respectively. In Russia, is not uncommon for organized criminals to own key companies (or control entire industries) right alongside government officials, while Chinese officials are often paid to look the other way when it comes to violation of laws and standards, securing contracts, or obtaining privileged access to capital or resources.


Rule of Law
The idea of the rule of law is closely related to corruption, but it in this case it refers to the clear and consistent application of laws and regulations to all parties in a country. In Russia, for instance, it is commonplace for countries that are "friendly" with government officials to get preferential treatment and for government officials to punish uncooperative companies through pseudolegal means. Although the worst excesses of Russia's erratic application of rules and laws seem reserved for internal matters (the infamous Yukos case, for instance), many Western companies like BP have run afoul of shifting rules and arbitrary enforcements.


Though not the same as rule of law, excessive rules and law can also be a significant problem. India is a good example of the inconsistencies and frustrations to be found in emerging investing. While India has a well-developed democracy, it also has a crippling bureaucracy, byzantine rules and regulations, and a depressing level of corruption (though a promising trend of improvement here). All in all, then, it is not hard to start a very small business in India, but trying to establish a large scale enterprise can be especially difficult.


Infrastructure
While Brazil, India and China are thought of as emerging countries forever putting up new buildings and public projects, Russia has the opposite perception - a country that has seen its physical and intellectual infrastructure hollowed out by the collapse of the Soviet system and the inconsistencies of government policy since then. Much of Russia's infrastructure is frankly not in the best of shape and this makes transporting goods and conducting business more challenging. Along similar lines, while Russia used to turn out large numbers of talented engineers, the university system has fallen into disrepair and disrepute and Russia is often challenged to find the motivated and talented people it needs to compete in advanced industries.


India also suffers from a very large population, quite a lot of poverty (one-quarter of its people living below the country's own poverty line), and a relatively poor infrastructure. Access to clean water and sanitation is still problematic in some rural areas, and the traffic jams and overcrowded railways are legendary. _SFGate

Sick as a BRIC

Understanding Third World Corruption: India

Headwinds for Emerging Markets

Next crisis to arise in BRICS

The Al Fin blog has devoted a lot of space to the underlying problems of China and Russia. But readers should take a good look at the article on Indian corruption linked above. Brazil is a special case, since it enjoys proximity and relatively good relations with North American markets and business. But the underlying weaknesses of Brazil should encourage caution in prospective investors. South Africa would be more properly seen as a nation being readied for a downward trajectory -- similar to Zimbabwe's -- rather than a nation of great promise.

You cannot blame big investors and analysts for trying to find economic promise somewhere in the world. That is what they do. But you cannot believe very much of what they tell you either, when being sold investments. If the governments of Europe, North America, and Oceania have killed the goose that lays the golden eggs, by chasing after energy starvation, carbon hysteria, and a false dream of perpetual affluence and security without work, how stupid is it for those same countries to expect nations which are essentially still members of the third world to bail them out of their self-made quagmires?

The king troublemaker is the US, of course. Obama's quest for infinite government debt -- underwritten by overseas investors -- is a folly of unprecedented proportions. Obama's desire to flood the US with uneducated, impoverished, poorly assimilable immigrants from the third world -- to boost his political power and that of his cronies -- is another great folly. Obama's ongoing agenda of energy starvation and the continued suppression of a wide array of potential energy sources, is another sign of an underlying destructiveness inside the US President which is disturbing. Has the US ever suffered from such an administrative agenda of apparent national suicide as this one?

The BRICS have promise so long as they are being pulled up from the outside by stronger economies which need BRICS exports. If the world's superpower and the other great markets of the global economy sink themselves via bad government, it will be no use looking to the BRICS for long term economic redemption.

More: Brazil -- Nowhere to go but down?

Connect the Dots

More 8June11: It's even worse than you think

Gary Locke
International observers are seeing the growing outlines of a world without central leadership or guidance. The US seems unable to find its way out of its stagnant economic condition, and there is no other nation ready, able, and willing to step up to the plate.

Russia's corrupt leadership combined with its one-trick-pony economy simply cannot keep up with the emerging BRICs. Russia's shrinking core population is sick, and morally exhausted. The huge landmass of riches is growing harder to hold.

China's "economic miracle" is in reality a huge house of cards waiting to collapse. Inflation in China is just a tiny hint of the dangerous undercurrent of instability waiting to break into chaotic tumult.

Japan's recent earthquake and tsunami triggered severe economic and social upheaval, which on top of Japan's shrinking demographic promises continued economic problems for the island archipelago as a whole.

The third world is still the third world for many reasons, most of which are not politically correct to mention. It is important to understand that the population of much of the third world is several multiples of the natural carrying capacity of the regions -- without outside aid and assistance. If something happens to the world economy, the death toll in third world nations is apt to be distressingly high.

What about the erstwhile hegemon and superpower of the world, the US? Under President Obama, US economic prospects are looking worse and worse. Americans suspect that there is something wrong with the way that President Obama is handling the US economy. But with the dumbing down of schools and other dulling effects of demographic change on the US population, most Americans lack the ability to pinpoint exactly where Obama is going wrong, economically.

Stimulus after stimulus have failed to achieve anything other than to create an addiction among investors for more stimulus. As QE2 fades, investors look ahead to QE3 for another junky's fix.

Meanwhile, among the US more affluent, educated, and productive classes, birthrates are plummeting. This falling fertility not only reflects a greater affluence and hedonistic tendency, but it also reflects a certain lack of faith in national leadership and the future.

The visible human world is built on psychological whims and beliefs. If those whims and beliefs shift, the human world will shake. Your best bet is to pay attention to basics. Consider instituting triage as appropriate for your personal circumstances.

The financial contraction of 2008 was not a one-off event from which we are all recovering. Almost none of the fundamentals are getting better, and many are getting worse. As a result, 2008 was only a prelude to a worsening future, as long as the twin disasters of debt and demographics continue along their inexorable paths of destruction. Energy starvation due to faux environmentalism, and widespread indoctrination of lobotomising politically correct dogma via the educational system is not helping, either.

Growth in National Debts over Time

Public Gross Debt as Percent of GDP by Country – 1992-2011

gfmag Click on arrow to start
This graphic understates the deadly peril that national economies of advanced nations find themselves in. The drivers of debt growth are built into the economies as fixed entitlements and as growing interest payments on the debt. Exponential growth of debt and eventual default or monetary collapse are inevitable -- unless governments can bring themselves to either institute painful budgetary reforms or to open their economies to market reforms which expand economic opportunity and facilitate competitiveness.

Modern quasi-leftist nanny state democratic governments whose citizenries suffer from an aggravated sense of entitlement, will never be able to absorb the painful sacrifice necessary to discipline their debt. Demographic trends of aging populations and decline of human capital are not helping.

This table uses data from the Organisation for Economic Co-operation and Development (OECD) and measures gross debt as a percent of GDP. Most major statistical organizations measure debt with fairly consistent results, including the International Monetary Fund (IMF) and Eurostat.

The 2007-2009 financial crisis led to a dramatic increase in the public debt of many advanced economies, with many of them experiencing their highest levels of debt since World War II. This was in large part due to the huge stimulus programs in countries around the world, in addition to government bailouts, recapitalizations and takeovers of banks and other financial institutions. Another contributing factor to the increased debt was the decrease in tax revenues.

Public debt as a percent of GDP in OECD countries as a whole went from hovering around 70% throughout the 1990s to more than 90% in 2009 and is projected to grow to almost 100% of GDP by 2011, possibly rising even higher in the following years. It could already be higher, as potential costs of aging populations may not be entirely reflected in the budget projections of some countries.

The rise in public debt has been seen not only in countries with a history of debt problems - such as Japan, Italy, Belgium and Greece - but also in countries where it was relatively low before the crisis - such as the US, UK, France, Portugal and Ireland. _gfmag_via_MJPerry

The combined scourges of debt and demographic decline allow observers to anticipate economic and sociological trends for several regions across the globe. Only by looking at these and other underlying dynamic mechanisms of change, can individuals and groups position themselves to meet the turbulent transformational events coming their way.

Data is from the OECD Economic Outlook 87 database, June 2010. Figures are a percent of GDP. Click on the column heading to sort the table.

gfmag

No Way to Pretend that this Mangy Dog is a Beautiful Princess

More... FinancialArmageddon: Not a sense of recovery wherever you turn

The global economy remains devastated, despite all popular claims to the contrary. And it is not just Greece, Ireland, Spain, and Portugal which are in trouble. The US is beginning to feel the hurt from ludicrous fiscal and monetary policies which date back to the 1970s -- but which have reached particularly destructive levels under the Obama-Reid regime. The global economy still pivots around the US economy. And that is bad news all around.

1) Existing home sales for April were down 0.5% to 5.05 million as compared to 7.2 million at the peak. Inventories of homes for sale increased to a 9.2 months, the highest since December while prices were down 5% from a year earlier.

2) April housing starts dropped 10.2% to 523,000, barely above the recession lows, and below any level prior to 2008. According to the National Association of Home Builders (NAHB) traffic of potential buyers was still extremely low. Keep in mind that this is an organization that usually puts a positive spin on any results.

3) While weekly initial claims for unemployment insurance declined to 409,000 from the prior week, the number has now been over 400,000 for six straight weeks after a period of coming in below that level.

4) The Philadelphia Fed Index for May fell sharply to 3.9, losing 39.5 points in the last two months. This is also well below the 1st quarter average of 32.9. Both new and unfilled orders dropped significantly while inventories also declined, indicating that the inventory buildup that helped support the recovery may be moving back in line with demand, which has been growing less than production.

5) Consistent with the above, April industrial production was flat. It is likely that production, which had consistently been running ahead of demand, is being reduced as inventories that were depleted during the recession have now caught up. This also may explain the higher level of initial claims.

6) The Empire State Manufacturing Survey was also down 9.8 points to 11.9, the lowest level since December. This index therefore confirms the Philly index and suggests similar lower results from the ISM manufacturing index.

7) The April index of leading indicators declined 0.3%. While one month does not make a trend it was the first monthly drop since last June, and fits in with what other indicators seem to be telling us.

8) Similarly, the ECRI Weekly leading indictor has been down for three of the last five weeks and has been about flat since mid-December after rising steadily from the recession lows. This is indicative of at least a pause in coming economic growth, and perhaps something worse.

9) April core retail sales increased only 0.2%, and were probably flat to slightly down when adjusted for inflation. Higher income from reduced social security withholding was more than offset by higher gasoline prices, tepid wage increases, high unemployment, lower home prices and recessionary levels of consumer confidence. And this is happening even before the end of QE2, which has been keeping the economy afloat since November.

10) The April Small Business Survey, after rising weakly from recession lows, has now dropped 3.1 points in the last two months. Even at its most recent high it was below any level in its history prior to 2008. Key segments that declined were plans to increase employment and capital expenditures. In addition the number expecting sales to rise also dropped.

11) In addition to the domestic concerns cited above, the global picture is also not looking too rosy. ECRI's long leading indicator of global industrial growth peaked last August at 0.7 and stood at 0.1 in March. ECRI managing director Lakshman Achuthan stated "There's a downturn in global industrial growth in clear sight". EU production fell in March and retail sales have been flat for six months. In the UK there's been no GDP growth for six months. Japanese GDP dropped 3.7% annualized in the 1st quarter and 3.0% in the 4th. Note that the earthquake occurred on March 11th, toward the end of the quarter, so cannot be fully blamed for the 1st quarter and not at all for the 4th. Industrial output in all of the BRIC nations seems to be slowing, and current monetary and fiscal policies suggest more to come.

All in all it seems to us that the odds are high that a domestic and global economic slowdown is already in place. In the U.S. the slowdown is happening with only six weeks to go before the end of QE2, a program that has been a major prop for even the tepid recovery we've undergone so far. For the stock market nothing seems to matter until, suddenly, it does. _ComstockFunds

Did you imagine that China is ready to take over as the global economy's driving force? Better think again. More here.

via EconomyWatch
Drowning in Debt: Why the economy still cannot seem to recover.

Reading the consequences of debt: The hidden taxes of debts, deficits, and a deflationary : inflationary chaos -- along with dysfunctional government regulations, incentives, corruption, and laws -- combine to crush any nascent recovery in its cradle.

But the disaster is compounded by the effect of demographics: If human capital is not growing and improving, any realistic hope of economic growth and development is delusional.

Japan is the canary in the coal mine, the early warning signal for the rest of the world, on the dangers of debt and demography. The PIIGS of Europe are following closely behind. Russia would be a global economic basket case except for Siberian wealth -- and how much longer can the bear hold on to Siberia in the face of shrinking demographics and evaporating human capital?

Will the people of the west ever wake up to what they are doing -- and allowing to be done -- to themselves? If not, what are the alternatives? Who is John Galt?