Approaching Alcoa’s 50,000-ton forging press feels a bit like approaching an alp: it starts out incomprehensibly huge and keeps getting incomprehensibly huger. From a distance, the thing dominates the horizon of the hangar-like Cleveland Works facility; as you get nearer, catching glimpses through forests of girders and around cliffs of firebrick, it begins to dominate the air above. But even as you stand at its foot, being told that the eight steel bolts anchoring it are 40 inches thick, calculating in your head that that makes them 10 feet around—even then it’s still a bit out of reach. Only when you climb it, peer down from its sixth-floor summit, and realize that the puny machine next to it is, in fact, its 35,000-ton brother—well, then you finally appreciate the size of the thing. It’s big.

A fun article in the Atlantic. Additional note: the Chinese have built a far larger one:

Chinese 160MN press

Chinese forging press

American forging press dating from 1955:

Library of Congress

The Atlantic continues:

The Fifty, as it’s known in company shorthand, broke down three years ago, and there was talk of retiring it for good. Instead, it was overhauled and is scheduled to resume service early this year. One of the great machines of American industry has been reborn.

A forging press is—begging the forgiveness of the engineering gods—essentially a waffle iron for metal. An ingot, usually heated to increase its malleability, is placed on the lower of a pair of dies. The upper die is then gradually forced down against the ingot, and the metal flows to fill both dies and form the intended shape. In this way, extremely complex structures can be created quickly and with minimal waste.

What sets the Fifty apart is its extraordinary scale. Its 14 major structural components, cast in ductile iron, weigh as much as 250 tons each; those yard-thick steel bolts are also 78 feet long; all told, the machine weighs 16 million pounds, and when activated its eight main hydraulic cylinders deliver up to 50,000 tons of compressive force. If the logistics could somehow be worked out, the Fifty could bench-press the battleship Iowa, with 860 tons to spare.

read the whole article:

Iron Giant – Magazine – The Atlantic.

A long essay on futurism. It rambles a bit, and has the wavy-gravy out-of-focus quality of futurism, but I think he makes some interesting points. Seen from the POV of marketing technical products like cellphones, it offers some insight into why some products fail ( because they are too new ).

Both science fiction and futurism seem to miss an important piece of how the future actually turns into the present. They fail to capture the way we don’t seem to notice when the future actually arrives.

Sure, we can all see the small clues all around us: cellphones, laptops, Facebook, Prius cars on the street. Yet, somehow, the future always seems like something that is going to happen rather than something that is happening, present-continuous rather than future perfect. Even the nearest of near-term science fiction seems to evolve at some fixed receding-horizon distance from the present.

There is an unexplained cognitive dissonance between changing-reality-as-experienced and change as imagined, and I don’t mean specifics of failed and successful predictions.

My new explanation is this: we live in a continuous state of manufactured normalcy. There are mechanisms that operate — a mix of natural, emergent and designed — that work to prevent us from realizing that the future is actually happening as we speak. To really understand the world and how it is evolving, you need to break through this manufactured normalcy field. Unfortunately, that leads, as we will see, to a kind of existential nausea….

Some quips:

…How, as a species, are we able to prepare for, create, and deal with, the future, while managing to effectively deny that it is happening at all?

Futurists, artists and edge-culturists like to take credit for this. They like to pretend that they are the lonely, brave guardians of the species who deal with the “real” future and pre-digest it for the rest of us.

But this explanation falls apart with just a little poking. It turns out that the cultural edge is just as frozen in time as the mainstream. It is just frozen in a different part of the time theater, populated by people who seek more stimulation than the mainstream, and draw on imagined futures to feed their cravings rather than inform actual future-manufacturing.

The two beaten-to-death ways of understanding this phenomenon are due to McLuhan (“We look at the present through a rear-view mirror. We march backwards into the future.”) and William Gibson (“The future is already here; it is just unevenly distributed.”)

Both framing perspectives have serious limitations that I will get to. What is missing in both needs a name, so I’ll call the “familiar sense of a static, continuous present” a Manufactured Normalcy Field….

…So what about elements of the future that arrive relatively successfully for everybody, like cellphones? Here, the idea I called the Milo Criterion kicks in: successful products are precisely those that do not attempt to move user experiences significantly, even if the underlying technology has shifted radically. In fact the whole point of user experience design is to manufacture the necessary normalcy for a product to succeed and get integrated into the Field. In this sense user experience design is reductive with respect to technological potential….

…The Web arrived via the document metaphor. Despite the rise of the stream metaphor for conceptualizing the Web architecturally, the user-experience metaphor is still descended from the document….

…The smartphone could have developed via metaphoric descent from the hand-held calculator; “Oh, I can now talk to people on my calculator” would have been a fairly natural way to understand it. …

…This also explains why so few futurists make any money. They are attracted to exactly those parts of the future that are worth very little. They find visions of changed human behavior stimulating. Technological change serves as a basis for constructing aspirational visions of changed humanity. Unfortunately, technological change actually arrives in ways that leave human behavior minimally altered.

Engineering is about finding excitement by figuring out how human behavior could change. Marketing is about finding money by making sure it doesn’t. The future arrives along a least-cognitive-effort path.

This actually suggests a different, subtler reading of Gibson’s unevenly-distributed line.

It isn’t that what is patchily distributed today will become widespread tomorrow. The mainstream never ends up looking like the edge of today. Not even close. The mainstream seeks placidity while the edge seeks stimulation.

Instead, what is unevenly distributed are isolated windows into the un-normalized future that exist as weak spots in the Field. When the windows start to become larger and more common, economics kicks in and the Field maintenance industry quickly moves to create specialists, codified knowledge and normalcy-preserving design patterns….

…The future is a stream of bug reports in the normalcy-maintenance software that keeps getting patched, maintaining a hackstable present Field….

Read the whole thing: Welcome to the Future Nauseous. by Venkat on May 9, 2012

Posting the whole article due to short length.

We already posted a full run down from JPM on what the immediate costs from a Greek EMU exit would be (starting at €400 billion and going higher), but one point that bears repeating is just how much borrowing capacity Greece has under the ELA in the aftermath of today’s news that the ECB is leaving Greek banks to fend for themselves until such time as the Greek recapitalization payment is wired over to Greece, which the ECB has defined simply as “soon.” The answer: woefully inadequate, and certainly not enough to backstop the remaining Greek deposits of €170 billion as of the end of March (likely far less now), at €65 billion. And that’s an upside estimate: as JPM says “The true maximum amount that Greek banks can borrow via ELA is likely though to be significantly smaller because not all loans are accepted as collateral via ELA.” Remember: this is all just one giant game of chicken – Greece’s Syriza has bet the farm that the cost from a Greek fallout is just too big to Europe and the terms of the hated “Memorandum” will be adjusted, while to Europe, on the other hand, the outcome to Greece, at least according to Europe and the IIF’s Dallara will be “between catastrophic and armageddon.” So… Who blinks first?

From JPM:

Greek banks have run out of ECB eligible collateral already and can only access Bank of Greece’s ELA, but even with ELA, the collateral,typically loans, is not unlimited. They have already borrowed €60bn via ELA which, assuming 50% haircut corresponds to around €120bn of loan collateral. Outstanding loans are €250bn, so Greek banks have a maximum of €130bn of remaining loan collateral which allows for a maximum of €65bn of additional borrowing from Bank of Greece’s ELA. This corresponds to around 40% of Greek bank deposits which stood at €170bn as of the end of March. The true maximum amount that Greek banks can borrow via ELA is likely though to be significantly smaller because not all loans are accepted as collateral via ELA. The alternative is for Greek banks to be allowed to issue more government guaranteed paper but the ECB can, with a 2/3rd majority, block a steep and unsustainable increase in Bank of Greece’s ELA. This would effectively cut Bank of Greece off from TARGET2.

Once TARGET2 starts unwinding, with a massive €644 billion claim on the Eurosystem by the Bundesbank, and the realization that an imploding heretofore “contingent” and suddenly all too real liability amounting to 25% of German GDP means an in-kind collapse in living standards, then the simmering German anger will go truly parabolic.

One thing is certain: at least JPM is “hedged.”

I just quoted the start of the article. He makes many points about runs on the bank, what happens after they leave the Euro and so on. Read the whole thing, I suggest.

Well, my hat is off to the global central planners for averting the next stage of the unfolding financial crisis for as long as they have. I guess there’s some solace in having had a nice break between the events of 2008/09 and today, which afforded us all the opportunity to attend to our various preparations and enjoy our lives.

Alas, all good things come to an end, and a crisis rooted in ‘too much debt’ with a nice undercurrent of ‘persistently high and rising energy costs’ was never going to be solved by providing cheap liquidity to the largest and most reckless financial institutions. And it has not.

Forestalled is Not Foregone

The same sorts of signals that we had in 2008 are once again traipsing across my market monitors. Not precisely the same, of course, but with enough similarities that they rhyme loudly. Whereas in 2008 we saw breakdowns in the credit spreads of major financial institutions, this time we are seeing the same dynamic in the sovereign debt of the weaker European nation states.

Greece, as expected and predicted here, is a right proper mess and will have to leave the euro monetary system if it is to have any chance at recovery going forward. Yes, all those endless meetings and rumors and final agreements painfully hammered out by eurocrats over the past year are almost certainly going to be tossed, and additional losses are going to be foisted upon the hapless holders of Greek debt. My prediction is that within a year Greece will be back on the drachma, perhaps by the end of this year (2012)….

 

Get Ready: We’re About To Have Another 2008-Style Crisis – Blogs at Chris Martenson.

Limits to growth are resource-bound. All macro economists should have to hoe turnips and dig gold for a while.

When the American Revolution was starting, Washington, who surveyed west of the Alleghenies, and Jefferson, who built his famous house at the ridge of the Shenandoahs, were looking West for the demographic and economic future of the Colonies. Why? Because the economy was based on a slash-and-burn sort of plantation agriculture that ruined land, and on artificial restriction of sea trade imposed by the home country in order for a monopoly on raw materials and finished goods. In part the Revolution was about access to resources, which were denied by the British. This pattern of exhausting resources has continued on through American history – wrest what you can from what you have and move West for better resources. Politically the West has a long history of tension between its natural resources, timber, mining, agriculture and ranching, and the financial powers back East. So it’s probably expected that the great myth of growth includes application of Eastern capital to rural resources. In fact this is what the British empire did as well. But no man can have been ignorant of the state of a given natural resource – abundant – common -in decline- gone when fisheries, trapping, mining, ranching, and land itself were constantly tied up in boom-and-bust cycles.

So it can’t be sheer ignorance of the fragility of resources that allowed the myth of unending growth to build. Maybe it was good old-fashioned American hucksterism, the kind that built Florida and Los Angeles. Maybe it was encouraged as an blow-off valve for popular discontent. Never mind that JP Morgan can buy your town, it’s a promise that you can have two suits and a piano in the parlor one day yourself.

Here’s Daly:

In yesteryear’s empty world capital was the limiting factor in economic growth. But we now live in a full world.

Consider: What limits the annual fish catch — fishing boats (capital) or remaining fish in the sea (natural resources)? Clearly the latter. What limits barrels of crude oil extracted — drilling rigs and pumps (capital), or remaining accessible deposits of petroleum — or capacity of the atmosphere to absorb the CO2 from burning petroleum (both natural resources)? What limits production of cut timber — number of chain saws and lumber mills, or standing forests and their rate of growth? What limits irrigated agriculture — pumps and sprinklers, or aquifer recharge rates and river flow volumes? That should be enough to at least suggest that we live in a natural resource-constrained world, not a capital-constrained world.

Economic logic says to invest in and economize on the limiting factor. Economic logic has not changed; what has changed is the limiting factor. It is now natural resources, not capital, that we must economize on and invest in. Economists have not recognized this fundamental shift in the pattern of scarcity.
….
The claim that capital is a near perfect substitute for natural resources is absurd. For one thing substitution is reversible. If capital is a near perfect substitute for resources, then resources are a near perfect substitute for capital — so why then did we ever bother to accumulate capital in the first place if nature already endowed us with a near perfect substitute?

It is not for nothing that our system is called “capitalism” rather than “natural resource-ism.” It is ideologically inconvenient for capitalism if capital is no longer the limiting factor. But that inconvenience has been met by claiming that capital is a good substitute for natural resources. Ever true to its basic animus of denying any fundamental dependence on nature, neoclassical economics saw only two alternatives — either nature is not scarce and capital is limiting, or nature’s scarcity doesn’t matter because manmade capital is a near perfect substitute for natural resources. In either case man is in control of nature, thanks to capital, and that is the main thing. Never mind that manmade capital is itself made from natural resources….

 

Read more: What Is the Limiting Factor?

The author writes on green stocks, and has a major interest in the battery company named. His numbers show about a three-year payback for switching engines. I don’t know about his numbers YMMV. Technically though, it make sense. Submarines have run on batteries since WWI, and as he points out a diesel-electric locomotive already has most of the BEV hardware in place.

A hybrid diesel yard switcher under test
Old battery locomotives

The previous Norfolk-Southern Locomotive experiment

John Petersen

For the last two years I’ve been paying increasingly close attention to trailblazing work by Norfolk Southern (NSC) in the field of battery-powered locomotives. My interest was piqued in June of 2010 when Norfolk Southern hired Axion Power International (AXPW.OB) to develop a battery management system that would allow rail locomotives to run on battery power and recharge their batteries through regenerative braking. I believed the decision was positive news for Axion because nobody hires a battery manufacturer to design a BMS for somebody else’s product. My enthusiasm was tempered, however, by knowing that an earlier Norfolk Southern retrofit, the NS 999, was unveiled in September 2009 and quickly proved to be an insurmountable challenge for the AGM batteries that were used in the original design. I also knew that a technical development project for a Class I Railroad would require a couple years of work before a rational implementation decision could be made.

A key milestone was reached this week when Axion announced that NS had ordered $475,000 of PbC® batteries that will be installed in the NS 999 over the next couple months. The two companies are also moving forward on a parallel development track for a larger and more powerful long-haul locomotive that will use twice the battery power.

Now that I have a clear data point on battery costs for both the switcher and a long-haul locomotive, I can finally dig into the fundamental economics of what Norfolk Southern is trying to accomplish with this project…..

read more at

Battery-powered Locomotives – Compellingly Green Economics | Alternative Energy Stocks.

Reposting entire article because its short and concise. The basic premise is that Indian and Chinese growth drives an ever-increasing demand for oil. Chinese car sales for instance, are as large as the United States. Collapse of growth in either country would likely have dire political effects.

On May 3rd I will be delivering a talk called Moving Beyond Oil Dependence as a part of UC Santa Barbara’s Spring 2012 Chemical Engineering Seminar Series. The talk will roughly follow the outline of my book, and I have used several graphics from the book in the presentation.

However, I created a couple of graphics specifically for this presentation that I believe explain the majority of the oil price escalation over the past decade. True, part of the price rise may be due to speculation, but the following two graphics show just how robust demand has been even in the face of $100 oil. The data source for both graphics is the 2011 BP Statistical Review of World Energy:

Figure 1. Oil demand in Asia Pacific (minus Japan) from 2000 to 2010.

This graphic shows that despite the quadrupling in the price of Brent crude over the decade (and I used Brent crude because it is more representative than West Texas Intermediate of what Asia pays for crude), regional demand in Asia Pacific’s developing countries still grew by 7 million barrels per day. (Demand in Japan — one of Asia Pacific’s developed countries — fell by 1.1 million bpd over the decade).

So when we wonder why gasoline prices haven’t fallen in the U.S. even though U.S. consumption has been declining for several years, that graphic supplies part of the answer. The 1.5 million barrel decline in U.S. demand in the past five years is far less than the demand growth in developing countries, and oil production has not managed to keep pace.

The following graphic shows that this trend is taking place all over the world:

Figure 2. Explosive demand growth occurred in every developing region.

from http://www.consumerenergyreport.com

So while the developing countries in Asia Pacific saw a nearly 50% increase in consumption — amounting to 7 million barrels — it wasn’t even the fastest growing region. That distinction belongs to the Middle East, which added 56% to their oil consumption between 2000 and 2010. The Middle East’s total increase in consumption was smaller than that of Asia Pacific at just under 3 million barrels per day, but that is primarily a function of the relative populations of the regions. OPEC countries like Saudi Arabia saw the strongest demand growth in the region. This is understandable considering that the high price of oil brought a huge influx of cash into oil exporting countries, and wealthy countries tend to increase their oil consumption.

This is why — even if we take peak oil completely out of the equation — I don’t ever foresee a sustained return to cheap oil. There are many who have placed most of the blame for increased oil prices on speculation, but those two graphics explain why I believe the issue has far more to do with fundamentals.

Roubini lists the reason the Euros have painted themselves into a corner:

• Austerity kills growth
• Euro too high for poor countries to compete
• Credit crunch leads to building up capital-asset ratios, which means less credit
• Oil prices

Is there anything they could do? Invest in more green energy, restructure government programs… I don’t know. If we really are beginning the end of growth, then it’s all about managing decline.

NEW YORK – Since last November, the European Central Bank, under its new president, Mario Draghi, has reduced its policy rates and undertaken two injections of more than €1 trillion of liquidity into the eurozone banking system. This led to a temporary reduction in the financial strains confronting the debt endangered countries on the eurozone’s periphery (Greece, Spain, Portugal, Italy, and Ireland), sharply lowered the risk of a liquidity run in the eurozone banking system, and cut financing costs for Italy and Spain from their unsustainable levels of last fall.

At the same time, a technical default by Greece was avoided, and the country implemented a successful – if coercive – restructuring of its public debt. A new fiscal compact – and new governments in Greece, Italy, and Spain – spurred hope of credible commitment to austerity and structural reform. And the decision to combine the eurozone’s new bailout fund (the European Stability Mechanism) with the old one (the European Financial Stability Facility) significantly increased the size of the eurozone’s firewall.

But the ensuing honeymoon with the markets turned out to be brief. Interest-rate spreads for Italy and Spain are widening again, while borrowing costs for Portugal and Greece remained high all along. And, inevitably, the recession on the eurozone’s periphery is deepening and moving to the core, namely France and Germany. Indeed, the recession will worsen throughout this year, for many reasons….

]]> http://www.jawfish.net/wp/archives/1047/feed 0 http://www.jawfish.net/wp/archives/1039 http://www.jawfish.net/wp/archives/1039#comments Wed, 02 May 2012 20:20:09 +0000 john http://www.jawfish.net/wp/?p=1039 Capital, Debt, and Alchemy « Center for the Advancement of the Steady State Economy.

This business of wealth vs debt is very confusing when you look at it closely. Maybe we should substitute more accurate words to help us behave sanely. The issue of debt comes up over and over in my reading, corporate debt. mortgage debt, sovereign debt, local and remote debt, hidden debt. For instance I just read an article about the hidden sovereign debts in Europe caused by underwriting the national banks, debts from 20-75% of GDP. And another article about hidden Chinese government debt for massive infrastructure projects. But there is another kind of debt, the damage we have done to our ecology which will have to be repaired or depreciated. And promises made to fix roads, pay for medical care, and pensions that we can’t keep.

“Capital,” said Nobel chemist and pioneer ecological economist Frederick Soddy,”merely means unearned income divided by the rate of interest and multiplied by 100.” (Cartesian Economics, p. 27).

He further explained that, “Although it may comfort the lender to think that his wealth still exists somewhere in the form of “capital,” it has been or is being used up by the borrower either in consumption or investment, and no more than food or fuel can it be used again later. Rather it has become debt, an indent on future revenues…”

In other words capital in the financial sense is the perennial net revenue stream expected from the project financed, divided by the assumed rate of interest and multiplied by 100. Rather than magic growth-producing real stuff, it is a hypothetical calculation of the present value of a permanent lien on the future real production of the economy. The fact that the lien can be traded among individuals for real wealth in the present does not change the fact that it is still a lien against the future revenue of society — in a word it is a debt that the future must pay, no matter who owns it or how often it is traded as an asset in the present.

Soddy believed that the ruling passion of our age is to convert wealth into debt in order to derive a permanent future income from it — to convert wealth that perishes into debt that endures, debt that does not rot or rust, costs nothing to maintain, and brings in perennial “unearned income,” as both IRS accountants and Marxists accurately call it. No individual could amass the physical requirements sufficient for maintenance during old age, for like manna it would spoil if accumulated much beyond current need. Therefore one must convert one’s non-storable current surplus into a lien on future revenue by letting others consume and invest one’s surplus now in exchange for the right to share in the expected future revenue….

read more: Capital, Debt, and Alchemy « Center for the Advancement of the Steady State Economy.

Exponential Economist Meets Finite Physicist | Do the Math.

Some while back, I found myself sitting next to an accomplished economics professor at a dinner event. Shortly after pleasantries, I said to him, “economic growth cannot continue indefinitely,” just to see where things would go. It was a lively and informative conversation. I was somewhat alarmed by the disconnect between economic theory and physical constraints—not for the first time, but here it was up-close and personal. Though my memory is not keen enough to recount our conversation verbatim, I thought I would at least try to capture the key points and convey the essence of the tennis match—with some entertainment value thrown in.

…

Act One: Bread and Butter

Physicist: Hi, I’m Tom. I’m a physicist.

Economist: Hi Tom, I’m [ahem..cough]. I’m an economist.

Physicist: Hey, that’s great. I’ve been thinking a bit about growth and want to run an idea by you. I claim that economic growth cannot continue indefinitely.

Economist: [chokes on bread crumb] Did I hear you right? Did you say that growth can not continue forever?

Physicist: That’s right. I think physical limits assert themselves.

Economist: Well sure, nothing truly lasts forever. The sun, for instance, will not burn forever. On the billions-of-years timescale, things come to an end.

Physicist: Granted, but I’m talking about a more immediate timescale, here on Earth. Earth’s physical resources—particularly energy—are limited and may prohibit continued growth within centuries, or possibly much shorter depending on the choices we make. There are thermodynamic issues as well.

Economist: I don’t think energy will ever be a limiting factor to economic growth. Sure, conventional fossil fuels are finite. But we can substitute non-conventional resources like tar sands, oil shale, shale gas, etc. By the time these run out, we’ll likely have built up a renewable infrastructure of wind, solar, and geothermal energy—plus next-generation nuclear fission and potentially nuclear fusion. And there are likely energy technologies we cannot yet fathom in the farther future….

Read the whole piece at  Exponential Economist Meets Finite Physicist .