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DrumBeat: August 31, 2007
Posted by Leanan on August 31, 2007 - 11:00am
Topic: Miscellaneous
Who'll Pay America's Energy Bill?
Chicken Little here, reporting for duty. As we reach the final days of August, with the Congress doing whatever Congresspeople do during their recesses (perhaps we're better off not knowing), I'm flapping around wondering about the near-total contradiction between the world of energy as I see it and the parts of the 2007 energy bills now gathering dust on Senators' and Representatives' desks.
Jordan to opt for nuclear energy
Jordan predicted it would become an energy exporter, once the Hashemite Kingdom adopts nuclear energy.
Sri Lanka to adjust gas prices on bi-monthly formula
Sri Lanka's liquid petroleum gas (LPG) prices are to be adjusted every two months on a price formula agreed with the island's consumer authority, Shell Gas Lanka said.
Stuck in guzzlers on road to nowhere
Asking Australians to give up four-wheel-drives would be contentious. In the United States it could be political suicide.In the US, cars - and big cars - are deeply ingrained in the lifestyle. This is the home of the road movie, where an entire two hours can be filled with a tale of crossing wide open spaces. People in American cities think nothing of a two-hour drive each way to work as their cities continue to expand.
Myanmar Dissidents Dodge Arrest
Anti-government protesters scattered into hiding Friday to dodge arrest after a wave of protests over higher prices.
Consumption of natural gas in Belarus down 5%, Energy Minister Alexander Ozerets says
The Belarusian Prime Minister has tasked the Energy Minister to see to it that the work on increasing the share of local fuels in the Belarusian fuel consumption mix should be accelerated. As an example Sergei Sidorsky cited Germany which reduced the consumption of natural gas by 37% over the seven months this year.“Now we have to work in the absolutely different environment with respect to oil and gas prices. This is $2 billion more that we have to take out from our economy,” Sergei Sidorsky noted.
Drive your car to death, save $31,000
By keeping your car for 15 years, or 225,000 miles of driving, you could save nearly $31,000, according to Consumer Reports magazine. That's compared to the cost of buying an identical model every five years, which is roughly the rate at which most car owners trade in their vehicles.
EcoBroker real estate agents help buyers in search of houses where everything is greener on the other side.
Pipeline Work Choking Off Fuel Supplies to Midwest
Regional refinery work and pipeline repairs are choking off fuel supplies to the U.S. Midwest, triggering a spike in gasoline prices, traders and fuel dealers said Thursday.The latest disruption came from the Explorer Pipeline, which traders said was cutting fuel throughput rates by up to 8 percent to the Midwest for several months due to maintenance.
Todd Jacobson wouldn’t be surprised if gas stations start putting up signs that say “Out of gas.”The West Fargo Sooper Stop owner said there’s such a “massive shortage” of gas that he’s “walking on eggshells right now.”
“I’ve been down to 100 gallons of gasoline and not sure when I’m going to get my next load,” Jacobson said. “It has not been a good couple of months.”
Crude Oil Futures Gain on Concern Over Potential Atlantic Storm
Crude oil rose close to a four-week high on concern a developing storm in the Atlantic Ocean may intensify and threaten rigs and pipelines in the Gulf of Mexico.A weather system east of the Windward Islands, is "well organized" and may become the sixth tropical depression of the Atlantic hurricane season later today, the Miami-based National Hurricane Center said on its Web site. Oil prices surged after hurricanes Katrina and Rita devastated Gulf of Mexico oil platforms and pipelines in 2005.
The weather disturbance "has the potential of turning into a hurricane in a few more days," said Paul Tossetti, director of oil market analysis at PFC Energy in Washington. "Memories of Rita and Katrina are still pretty fresh in peoples' minds."
Beer Shortage Highlights Decline - Harare residents say absence of commodity that's hardly ever in short supply is clear sign of how bad things have become.
“Everything has become abnormal in this country but the funny thing is that we have accepted…the.. situation. People are burning millions of dollars worth of scarce fuel driving around looking for beers. We are drinking anything that is available. You tell me, what is normal about that? To me, this shortage of beers is just a sign that everything around us is crumbling."
Gas from Myanmar - Crisis call
Myanmar is exporting energy to Thailand and is contemplating energy export to China, India and Bangladesh. Yet most of the countries do not have access to power and many basic amenities of life. The economic sanction imposed by United States and EU have impoverished the nation. Now it desires to be a major supplier of oil and gas to energy hungry China and India.
The rapid increase in oil prices over the last five years has forced air forces everywhere to cut back on flight training for their pilots. That could have some interesting consequences. Over the last half century, it's been found that combat pilots need about 200 hours in the air each year, to build and maintain their combat skills. So it's with great reluctance that some nations cut back on those flying hours.
Argentina Upgrades Import Tax-Free Quota For Diesel Amid Shortage
The Argentine government on Friday increased the quota for non-taxed diesel imports, as the nation's refineries, operating at maximum capacity, struggle to meet demand amid government pump price controls.
Contemplating Loss of a Gas Field: Chattak (Bangladesh) Case Study
It now appears that the Chattak (also known as Tengratila) gas field of Bangladesh has embraced a premature death. It did so at the hands of a wicked gang comprising foreign and local associates. This may form an example of a textbook case study as to how a promising resource base of an impoverished nation can be plundered for the sake of personal gain of few high-ups in government machinery.
New IEA Head to Meet OPEC Secretary General on Wednesday
The new executive director of the International Energy Agency will meet with the Organization of Petroleum Exporting Countries' secretary general on Wednesday, less than a week before OPEC ministers gather to review oil output policy, a person familiar with the talks said Thursday.
Economic Warfare in the Final Phase
This week the French President, Nicolas Sarkozy, warned against Russia’s use of energy as an instrument of foreign policy. Speaking before his ambassadors, the French President said: “Russia is imposing its return [as a great power] on the world scene by employing its assets, notably oil and gas, with a certain brutality.” A great power ought to be gentle in its economic or political superiority. The Russians, however, are accustomed to a more cynical use of their advantages. The language of the Russian president includes mockery, condescension and threats. The West cringes, the East advances. Who cares what the weak countries think? Their feelings are without consequence.
Albania: The Heart of Darkness
If you live in Albania, chances are you cannot read this.To read an Internet journal requires electricity, and Albanians are in the throes of an energy shortage that threatens glimmers of economic and political progress in Europe’s second poorest country.
Nigerian Government Reshuffles Oil Sector
Nigeria's federal government dissected its state-owned oil firm into five splinter companies and constituted a National Energy Council to reorganize the energy sector of the economy, the country's state-run media reported here on Wednesday.
The United States must find better ways for meeting future energy needs and improving sustainable energy sources, a senior oil company executive told a Tucson audience yesterday."We have an energy crisis, an energy dilemma and an energy insecurity," said John Hofmei-ster, the president of Shell Oil Co., at a meeting Thursday with University of Arizona faculty and students.
Swiss adventurer and travel editor Louis Palmer has set out on a pioneering journey around the world in a solar-powered vehicle to draw attention to this abundant and under-exploited source of energy. His odyssey will bring him to Abu Dhabi and Dubai soon. He speaks about his mission exclusively to Weekend during his sojourns in Turkey, Syria and Amman.
Nantucket Sound – beautiful, but not pristine
One of the most specious and hypocritical arguments the opponents of Cape Wind have made is that Nantucket Sound is simply too "pristine" for anything so unsightly as 130 non-polluting, renewable-energy-producing wind turbines.
Australia: Citizens in the dark on NSW power inquiry
The New South Wales Government will today receive a blueprint for keeping the state powering ahead, but the report on the state's future electricity needs could stay under wraps until after the federal election.
Oil: Could This Be The End For Suburbia
Is Americas middle class getting stuck up a suburban cul-de-sac, surrounded by for quick sale signs, with a rusting commuter tank in the drive without a fill- up? Not quite, at least not yet, thanks to a robust global economy. True suburban property prices are falling, foreclosures and distressed selling are on a sharp rise - albeit from low bases - and there are rising concerns about petrol and heating costs. But the suburban beat goes on. At most, 10% of suburban households face incipient crisis in the short-term.
United States, China Clash over Peak Oil May Endanger World Peace
Peak Oil may have put the United States on a collision course with China as the two nations compete for African oil reserves. "Peak Oil" refers to the fact that worldwide, per capita petroleum production peaked in 1979. Owing to population growth, even though more actual barrels of oil per day are extracted, the amount of oil pumped per person continues to drop.
The real problem is rather that these elites can see no future for themselves without the plundering of resources from other nations.Peak oil, the point in time when resources are surpassed by demand, is certainly upon us. We may argue that this moment occurred two years ago, or whether it is still two years in the future. But in the scale of even human events, let alone geographical history what the hell.
They all say it’s not a land grab. Really, it isn’t. It’s an oil grab.The scramble for the oil and other natural resources at the top of the world intensified — quietly — this week, as Norway and Germany announced a new oil exploration partnership, the Daily Telegraph reported today, and Russia confirmed its state-controlled oil companies would do its business in the Arctic, Russian state media reported yesterday.
Alberta nuclear reactor isn't a done deal
Alberta Premier Ed Stelmach says the jury is still out on whether a proposed $6.2-billion nuclear plant will be built in oil-rich northwestern Alberta."We first have to decide whether we're open to nuclear energy," he said Tuesday in Edmonton.
UK CATS Gas Pipe Repairs Done, Restart This Week
Divers have completed repair work on BP PLC's (BP) Central Area Transmission System, or CATS, pipeline ahead of schedule and a controlled restart will begin this later week, the company said in a statement Thursday.
There are over a trillion barrels of oil estimated to be underneath the Canadian soil, which will be the solution to our racing demand for crude oil. And standing out of the crowd is one place.
FTC: Big Oil did not manipulate U.S. gasoline prices
Big oil companies did not conspire to raise U.S. gasoline prices last summer, as it was high crude oil costs and supply problems that caused the spike in pump prices, government investigators said on Thursday.The Federal Trade Commission said that about 75 percent of the rise in gasoline prices was due to a seasonal increase in summer driving, higher oil costs and more expensive ethanol that was blended into gasoline.
The other 25 percent of the price increase stemmed from lower gasoline production as refiners moved to using ethanol as the main clean-burning fuel additive and lingering damage from hurricanes Katrina and Rita that reduced refining capacity.
Porter ties U.S. withdrawal from Iraq to $9 gasoline
Gasoline prices could rise to about $9 per gallon if the United States withdraws troops from Iraq prematurely, Rep. Jon Porter said he was told on a trip to Iraq that ended this week.
Rising sea threatens China's south
Over 1,100 square kilometres (440 square miles) of land in economically booming southern China will be inundated by rising sea-levels by 2050 due to global warming, state press said Thursday."The Pearl River Delta area, a leading manufacturing hub, will be hard hit by climate change in the coming decades," the China Daily quoted Du Raodong, an expert with the Guangdong provincial weather centre, as saying.
Food demand and climate straining soils
World food demand will surge this century with a leap in population, highlighting a need to protect soils under strain from climate change, experts said on Thursday.
Industrial nations shy away from stiff 2020 goals
Industrial nations were shying away from fixing stiff 2020 guidelines for greenhouse gases cuts at U.N. talks on Friday in what environmentalists said would be a vote for "dangerous" climate change.
Ice fjords, lifeblood for polar species, at risk in melting Arctic
The Svalbard archipelago near the North Pole is already seeing the dramatic effects of global warming: the mercury is rising twice as fast as elsewhere on the planet, posing a serious threat to the ecosystem.The Arctic sea ice has never been as small as it is now. This year, it shrank to less than five million square kilometers (1.93 million square miles) -- a grim record for the planet.
Global Warming to Fuel More Severe Tornadoes and Thunderstorms
Global warming will make severe thunderstorms and tornadoes a more common feature of U.S. weather, NASA scientists said today.Climate models have previously shown that Earth will see more heavy rainstorms as the atmosphere warms, but a new climate model developed by NASA researchers is the first to show the difference in strength between storms that occur over land and those over the ocean and how storms strengths will change in general.
China says one-child policy helps protect climate
China says its one-child policy has helped the fight against global warming by avoiding 300 million births, the equivalent of the population of the United States.But delegates at U.N. climate change talks in Vienna said on Thursday birth control is unlikely to find favor as a major policy theme, partly because of opposition by the Catholic Church and some developing nations trying to increase their population.
Bush to Bail Out Sub-Prime Lenders
While claiming to bail-out low-income borrowers, Bush's plan to extend Government Guaranteed Loans to borrowers who cannot pay their mortgage is, in actuality, a bail-out of the lenders, who will receive payment for their bad loans while enslaving ... er, indebting mortgage borrowers to the federal government. And where does the money for this bail-out of the Ponzi scamming bastards come from? Right out of the taxpayers pocket.
http://news.bbc.co.uk/2/hi/business/6971746.stm
That's right, let's just heap more debt on the American people to save these worthless criminals, after all, they're worth more than the future of America, right? If you really wanted to help the borrowers, why not force the lenders to convert those fraudulent ARMs to low interest fixed rate loans? Why? Because it doesn't bail-out the sub-prime lenders. What is with this collusion to fleece every last penny out of the American working class? Does the United States even have the ability to issue enough debt to cover these loans? Last I saw, the rest of the world had enough of it(in more ways than one), and weren't showing up at the auctions. Aren't we in enough of a debt crisis already? I guess the working class in America takes it in the angus again so the thieving rich can skate away scott free. Where is Robin Hood when you need him?
Be sure to read Mish's take on this. Really good.
Bush Moves to Aid Lenders
snip
http://globaleconomicanalysis.blogspot.com/
Mish's take is just like what the MasterCard commercials say, "Priceless". John
Prudentbear has less humour:
Just wait, the other shoe will soon drop. The dollar will decline in value, and the cost of imports will go up. TPTB must have decided that higher prices for Chinese junk at Sprawl-Mart & fuel at the gas pump would probably generate less flack than a further decline in house values.
But hey the "official" U.S. debt limit stands at 8.989 trillion as of yesterday and no talk of raising the limit nor is there any media talking head to ask, "Where's the Beef?". John
By those clocks numbers, we will be at 9 trillion dollars by this time next week or sooner. And seeing as we can never pay off this debt, what in the real world is going to happen to the USA in 20 years?
The cost of China sourced goods will go up only if they show some restraint in currency manipulation by buying less dollars and letting the yuan float, as all other major currencies do. So far they have refused to do either. So worry not - that $25 DVD player may soon go to $15.
I'll confess up front I'm a physicist, not an economist. It always troubles me when I hear that spending of one sort or another is going down because consumers have to spend their money elsewhere. The paradox I see is that the money still goes somewhere. It doesn't vanish. Or does it?
Say a person borrows against equity and buys a new big screen TV. They now have to pay that money back through higher monthly payments.
Say that ARM rates go up by the same amount so that person doesn't buy the big screen TV. They just make the payments. However, the lender gets more money and they turn around and either use that money to lend to other people to buy homes or they take it as profit and go out and buy a Mercedes or a yacht.
Why is one different for the economy than the other?
Unlike energy, money can be spontaneously created or destroyed without changing forms (being exchanged for goods or services.)
When you buy something (like a house) and then its price drops, the money representing the difference in price is destroyed.
If we take your example forward a few steps:
The ARM rates go up by a huge amount. Millions of borrowers stop buying all products except what they need to live.
Most people work for companies that don't provide what people need to live. Nobody is buying their products anymore. Millions of borrowers who work for these companies are laid off.
Unemployed people can't afford the ARM payment anymore. They try to sell the house, but nobody else has cash either. This causes house prices to plummet, which reduces people's ability to get out of house debt by selling the house. Eventually many default on their home loan.
The lenders at first make a lot of money. The relatively few people who make yachts or Mercedes do OK as a result. As more and more borrowers default, however, the lenders begin to lose a lot of money, too. Because now the houses are worth much less, and the original borrower won't ever pay off the original debt.
What you are describing is exactly what has been happening in the US economy which is transitioning into a rentier economy in which 10% of the population owns 99% of the assets. The other 90% of the population own next to no assets and remain indebted to the property owners.
From a political economy point of view, the 10% will have effective control of all apparatus of government and will manage it to serve their interests. This is already taking place. The 90% keep running faster and faster just to stay in place and fail to understand why their effort is fruitless.
This economy is far, far different from the Jeffersonian ideal in which each citizen was a property holder and each therefore had a vested interest in the governing structure. The US is transitioning back to the very political economy that it rebelled against 200 off years ago.
The wealthy buy luxury goods and services so if you offer these goods you will do well. The wealthy also invest for the greatest return and if this turns out to be in India or China then that is where the investment flows, the factories get built, the employment increases, and the exports originate.
There is nothing inherently wrong with any of this. We are just re-arranging the chemical bonds to come up with a new molecule that contains all the original elements but which functions in a different way. This is the position of a moral relativist.
On the other hand, 10% of the population are making out like bandits and fleecing the other 90% out of their wages, their property, their communities and their avowed form of government. From the perspective of a true conservative this is an abomination, a call to arms, grounds for an attack on the ruling class and a return to the status quo.
The $800 trillion dollar question bubbles up when this state borrows, and borrows, and borrows. At a certain point the creditors have as much or more influence as the citizens, perhaps more. The creditors observe the 10% moving their funds offshore and do likewise. The result is a major economic collapse in which the 90% suffer while the 10% again make out like bandits.
What remains to be seen is how long a rentier society can continue when a significant number of the 90% own guns, many of the 10% do not, and most of the military -- including the officers -- originate from the 90% rather than the 10%.
Historically, rentier societies featured a disarmed proletariat/peasantry, and an officer corps drawn from the propertied classes. This was how social control was able to go hand-in-hand with economic control.
When there is too much of a disconnect between the ruling class and the officer corps, then the thought inevitably occurs to the officer corps that the ruling class could just as easily be THEM, and that there really is nothing to stop them from taking over. There is a lot of historical precedent for this, too.
The 10% may make out like bandits, but then again bandits make out like bandits -- until they swing from the end of a rope.
Cid,
O.K., I hate to say this and seldom do, but....Is that exactly what I been trying to tell you guys since the start of this so called "crisis"? !!!
This whole thing was timed, whipped up and doled out to the public to get EXACTLY this result!
Think of this way and you willl understand.....It's an IPO to allow the mortgage lenders and their backers to cash out, with Unc' Sam to become the big buyer.....so really it's an IGO (Initial Government offering).
You get to the top of the Ponzi scheme, or "market", you've made millions in fees and closing costs, you know there's no more suckers left, you know these poor dopes you stuck with these pathetic "subprime", "interest only", "ARM" loans can't cash you out soon (which unlike legit mortgage banks, you DID NOT intend to stay around for no 30 or 40 years waiting for your money), so you tighten the screws, tighten the lending requirements, tighten the credit ratings, begin foreclosing on a few of the poor bastuurds, and let the business press and the hysterics in the market do the rest of the job for ya'....
And like magic, Uncle Sam comes in and buys your IGO, bails you azz out, and you walk away to some real estate of your own somewhere in the Bahamas, Cayman or Virgin Islands....and America tacks the bill on behind the trillion dollar Iraq war and a few other little expenses, is still in less debt per GDP than half the Euro currency Ponzi artists who have run the same game for years, the house is still standing in the suburbs on a nice big lawn, Uncle Sam signs off on the poor schmoe's debt, and the sun still rises.
The only "crisis" in this game has been the crisis of scruples.
RC
I cannot shake my image of the CEO president looting the pension funds, stripping the corporate assets and walking out on the employees and vendors. The next step - to avert bankruptcy - is the "restructuring". If I thought there were one or two opportunities on which BushCo had passed, then I might doubt the image, but I cannot think of any.
They know the company (country) is dying, so they strip it.
cfm in Gray, ME
They know the company (country) is dying, so they strip it.
http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla%3Aen...
Damn right, beyond furious.
We have become a country for Zionist bankers and welfare mobs with eternally outstretched hands.
Since the working and tax paying real citizens can't take the country back at the voting booth we should make an effort to remove any excess liquidity from the US and not spend a dime on anything other then basic food.
Let the bankers drown in their own shit and this will automatically starve the welfare mobs.
You can make your point without antisemitic epitaphs.
Nothing anti-Semitic in the post.
Please don't cry wolf with anti-Semitism and degrade its meaning. Calling a Zionist a Zionist isn't anti-Semitic. Zionism is not Judaism, although Zionists would like people to believe they are interchangeable terms, they're not.
Would you have complained if the post referred to Masonic bankers? Would that have been anti-Caucasian or whatever?
Differentiating between Zionism and Judaism doesn't make your post any less kooky.
My post? Kooky? Would you like to expand on that a little so I can understand what the hell it is you're trying to say.
Personally, I think raving about Zionist and Masonic bankers sounds equally kooky.
I wouldn't disagree with that Leanan, it wasn't me and I wasn't agreeing with the sentiment of the original post.
My rub was with the gratuitous misuse of a special term and its expansion to include an organisation for which it was not meant. The distinction is very important and should be maintained.
Masonic bankers? Please point me to 'em so I can ask 'em to help a brother.
While the post is not anti semitic, your response high lites one real major problem we have in the US these days.
Every time you have a member from any group that gets to call itself "minority" commit a crime, no matter how atrocious, even otherwise decent and educated members of that minority will call for absolution and innocence based purely on the specific minority status.
The result can only be a society without any values whatsoever.
Best hopes for a correction before we become Iraq.
Curious. If I didn't know better I'd think I've just read a comment by not just an anonymous internet blowhard but also an ignorant anti-semite.
Worse than that, Musashi. Some of those Zionist bankers are accomplices of the fugitive Emmanuel Goldstein.
This is a really BAD idea. This kind of crap keeps up there won't be a election next year - there'll be some lynchings.
..., and weren't showing up at the auctions.
I've always wanted to hear the soundtrack from one of those auctions: "Who-da-gimme $17,455,273,675,498.50?" I sadistically want to hear the auctioneer's tongue blow up.
A new Round-Up has been posted at TOD:Canada.
The Myth of the Slow Crash
Global warming will make severe thunderstorms and tornadoes a more common feature of U.S. weather, NASA scientists said today.
These the same scientists who told us last year (2006) would be such a bad hurricane season??? This year is kind of dud too - only a couple of months left. What were the initial predictions for this year - anyone remember?
The thing to keep in mind is that these predictions are essentially probabilistic. It was likely 2006 would be a bad hurricane year; just because that didn't happen, it doesn't mean they were wrong. The media may report the predictions as "10-12 hurricanes in 2006" (or whatever it was), but the actual predictions are more like "60-70% of 10-12 hurricanes in 2006". It's essentially similar to daily forecasts : if the forecast says 20% chance of rain, and it rains, that's not wrong, it's just unlucky if you hoped for no rain. A more extreme probability example: If I say there's only a small chance of winning the lottery, and then you win, I wasn't wrong. You were lucky.
The same thing applies to things like more tornadoes and thunderstorms. It may not happen this year, or next year, but should current conditions and trends persist, more storms will happen more often. That doesn't mean there won't be years with fewer than normal.
One further example that got a lot of attention was a few years ago when the possibility of a Flu pandemic was being reported. Scientists were basically saying it could happen, some current data doesn't look good, and we should prepare for it. Then it didn't happen right away, and it gets spun as "fear mongering scientists". Scientists are far more precise with their language than ever makes it to most media reports, who tend to take "more likely" and print/show it as "FOR SURE!".
Bingo. Predicting the number of storms for a given season is like making a long-term weather prediction.
As the saying goes, you expect climate, you get weather.
2006 a dud year? Maybe you need to keep track of the global hurricane picture (hence the term Global Warming). The 2006 year was not good if you consider the pacific hurricanes. This year has not been much better so far.
I am guessing you are an American. Americans tend to not notice things outside their country (let alone their state). It really is a wider world out there.
Edit:
It really is hotting up:
Weather Underground
So true and poignant. And don't tell me you live anywhere near the gulf either beecher, only a fool would call a season a dud when were really only 1/2 way through the Atlantic hurricane season.
history shows again and again how nature points out the folly of men
We ask, no insist, that meteorologists predict the future for us, and they surely do the best they can.. but we have noone but ourselves to blame if we are disappointed by faulty mispredictions.
'Magic is everywhere' Doug Henning
A very eye opening presentation about the relationship of water and energy;
The Nexus of Water, Energy and Climate
Heather Cooley discusses The Nexus of Water, Energy and Climate.
http://fora.tv/fora/showthread.php?t=1536
Water management is a HUGE net consumer of energy.
Q & A at the end is interesting.
Addresses desalination, population, other Countries, compost toilets, drought.
Bottom line….
Shower with a friend!
One thing about Capitalist, they have no shame:
Lehman taps Jeb Bush for private equity
Nicolette Davey
31 Aug 2007
Lehman Brothers has appointed Jeb Bush to its private equity advisory board in the latest attempt by a buyout group to influence Capitol Hill.
Lehman's move to hire the former Governor of Florida and brother of President Bush follows buyout giant Kohlberg Kravis Roberts hiring two former White House aides to lobby the US federal government on tax and regulatory matters affecting private equity.
US Congress is currently reviewing measures to raise taxes paid by local private equity firms and proposing fund manager’s bonuses are classed as ordinary income instead of capital gains, which would result in the tax rate increasing from 15% to 35%.
According to reports filed with the US Senate, private equity firms spent $1.4m (€1m) on lobbying in 2006. In the first half of this year, the figure has almost quadrupled to about $5.5m, according to a Bloomberg report.
Data from Thomson Financial’s peHub.com showed over 254 contributions from partners at private equity firms have been made during the US presidential campaign including Apollo Management, Bain Capital, The Blackstone Group and The Carlyle Group.
Mitt Romney, founder of US group Bain Capital, has raised over $326,200 for his US presidential campaign, the most popular candidate among buyout houses, according to peHub.com.
Bush, the younger brother of current US President George W Bush and tipped to be a future presidential candidate, was the 43rd Governor of Florida, holding the post for eight years until January. In April he joined the board of the largest US publicly owned hospital operator Tenet Healthcare.
In May last year Lehman appointed Bush’s cousin, George Walker, to head up the bank’s asset management division after recruiting him from Goldman Sachs where he was co-head of the bank’s hedge fund strategies group.
http://www.iht.com/articles/2007/08/31/business/wbmilk.php
In a growing world, milk is the new oil
By Wayne Arnold
Published: August 31, 2007
I saw a headline flash by a few days ago, if I remember well it was from Holland, that bread prices there are expected to rise by 6-20%. Milk was cited as one of the main reasons for the increase.
Looks like, just as we're one GOM hurricane away from $100 oil, we're one bad harvest away from food prices that millions simply won't be able to afford, not even here at home.
Stoneleigh has an article about Australia's present drought in today's Round-Up. If there's a repeat of last year's harvest down under, that will be disastrous. We'll know in a few weeks. From comments by US farmers/gardeners such as Airdale, I understand we may have a bad year here as well. Haven't yet seen a world grain update for 2007 from Lester Brown, but it's not very likely that world reserves have increased from last year's ultra-low numbers.
Farmers who say "It feels really good" have no idea what they wish for.
"Farmers who say "It feels really good" have no idea what they wish for."
What do you mean by that? It sounds a little like you're beating the guy up for doing well and being happy about it. Sure, he may get slammed by a drought, he may be supplying a material that will seem cruel in its brutal unavailability, but in fact, he IS supplying it, and I don't see a double-edge on that blade.
The farmers who are choosing to plant and water Corn for Ethanol might seem to fit that comment, but not the dairy farmers. But maybe I've just missed your point.
Bob
Bob,
I don't think there's anything wrong with a farmer making a bit more money. The problem lies in the reasons why the prices are rising. They will lead to a lot of human misery, and the farmer, looking at the bigger picture, may well wish to have a little less money, if that means a lot less misery around him. His increase in income doesn't occur in a void or a vacuum.
Should the farmer be happy with the added cash in his account, when he realizes that it makes his products unaffordable for ever more people?
I also don't think the farmer will be really better off, because the factors that make milk prices rise, will also raise the cost of things, that he has to buy, and there goes his extra money right out the door..
In a free market system, if farmers produce too much, this forces prices down, so they make little (or no) money. If there's a bad crop, prices go up, so they may make more money than they did for greater production. This is one of the great contradictions of capitalism, which is why you need socialism if you want to have an efficient farming system. (In our capitalist system, it's done by using socialist methods such as government subsidies and price supports, which benefit the big capitalist farmers).
Farmers don't decide what happens to their crop after it is sold. Out here in the uncivilzed world of Decatur County, Iowa there are a lot of cornfields and a lot of cows. I haven't seen any signs saying this field is for ethanol and that field is for cattle feed.
So all of the arctic ice disappears next year (or this year at the rate its going), our rainfall patterns totally change, and suddenly things get ugly. Wonderful.
For a glimpse of what we face regarding problems with food production then check out this site and scroll down to "CROP FAILURE/FOOD SHORTAGES":
http://home.att.net/~thehessians/disasterwatch.html
Food and water trump all other problems in the end. We can live without oil. I believe that we are going to have to devote much more of our shrinking economy to food and water supply, leaving increasingly less for other areas of the economy. Whole sections of the existing non-productive parts of the economy (basically businesses where everyone sits on their ass all day tapping keys or providing services) will get crushed.
Hey, that's a great website. Thanks for the link. Another one to check every day and keep me motivated to plant seeds and pull weeds.
I think that what we have seen so far is just a mild preview of "coming attractions."
ELP Plan (April, 2007)
http://graphoilogy.blogspot.com/2007/04/elp-plan-economize-localize-prod...
"Driven by a combination of climate change, trade policies and competition for cattle feed from biofuel producers,"
These snippets of rationality really get old. Reporters continue to blame the recent increases in food on everything but the primary cause. Excessive world overpopulation has consumed all stock piles. State that first, then add in climate change, trade policies, biofuels, whatever. If we still had 300+ days of feed stockpiles left, none of this would be occurring.
Biofuels, at this point, wouldn't be on the radar. Our total corn use for biofuels last year (high est 2.1 billion bu) was less than the predicted difference in harvest yields between 06 and 07. 10.5 billion bushels vs 13.3 billion bushels.
I realize that yields (ie acreage planted) probably wouldn't be as high this year without ethanol. Or that the problem for the future isn't dramatic. But for today, biofuels account for a small portion of that increase, and the number one cause, never mentioned, is the end of surplus and overpopulation.
I thought this was an interesting graph on the Opinion page of today's WSJ.
I can imagine the spike going down just as fast as it went up, especially if interest rates rise.
In regard to the ratio going down, consider the effect of the ongoing increases in food and energy prices.
In parts of the UK , the average family home is now 7 - 8 times the average salary.
See, we can beat you on some things!
In Bulgaria, which recently joined the EU, I'm estimating this number to around 10 times for most of the country. Similar situation in the other Eastern European countries that joined the EU recently. One more of the gifts globalization brought to the local people. Unfortunately I don't expect unwinding of the bubble over there - the prices are held up because of expectations for them to approach EU levels. The whole EU zone has to go down before they come down too.
Wealthy Westerners coming in and buying up properties for second homes?
I think it is mostly for investment than for second homes... a 2 bedroom apartment in a decent location could cost as low as euro 60-70K. You don't have to be that wealthy to invest in this but still it is way beyond the means of an average family.
There are many people from UK buying second or vocation homes, but they (rightfully) prefer the countryside or near the sea. There are whole english-speaking villages in Bulgaria :)
IMO the overall share of this buying is small, but it is creating the expectations for further price rise, which in turn stimulates buying from local speculators errr investors and from the immigrants.
Overall the prices are headed to closing the gap with the rest of EU and I guess this is normal.
Only if prices fall and median family income doesn't.
The 500,000 bpd decline in production by the OPEC 10 since November probably corresponds to a decline of about 700,000 bpd in net exports. IMO, the net export decline will accelerate with time.
OPEC keeps lid on oil output in Aug - Petrologistics
Thu 30 Aug 2007, 9:46 GMT
I like how you stay on-message :)
Matt
I wish he wouldn't copy/paste his points though :/
A follow-on to yesterday's Saudi reserve piece by EM: EM and WT were duelling over SA reserve estimates (and HL's validity.) My point was (and is) that potential hoarding (necessarily covert) makes getting accurate reserve estimates extremely difficult. I want to add that hoarding can also cause a virtual peak that is distinct and prior to from a geological peak. This is unlike the US peak in '70 where the world reserves were accessible (ultimately) and still far from peak. Another corollary is a possibly much steeper descent than geology alone would dictate, punctuated by grabs -- i.e. wars (which have already started, one may has noticed).
The technical estimates of reserves are extremely important, but because we are in the end game and the players know it, things will not play out in near accordance with any underlying curve reflecting depletion the resource.
What is hoarding, if not ANTICIPATION ?
The example of the US peak is one I use all the time. As we approached that peak, there was no price signal. Oil prices barely budged, which meant there was no incentive to exploit expensive reserves, so we had a "pure" geological peak playing out against a relatively calm economic backdrop.
The world situation is vastly different, as we're already well into the oil crunch phase, and the altered economics will change the behavior of all entities in the market. Economics and game theory will be as important as geology in determining supply and demand in the short- to mid-term.
Re: Economic Warfare in the Final Phase
The author of the article doesn't seem to realise that Europe needs Russia and Russia needs Europe and neither needs the US. It's very unfortunate that France and Europe has been saddled with the neocon trouble maker Sarkosy, it will make it much more difficult for Europe to get through the coming collapse.
I just hope that Bush takes Sarkosy with him when he eventually falls on his sword or the French wake up to what he is and hit the streets.
Vive La Revolution!
That article reminded me of the worst days of the Cold War when the US - Soviet tensions were at its height. The two propaganda machines were working at full steam and fearmongering was the main tactic employed. How little things have changed.
I Googled the author of that piece. He appears to be a raging nutcase. I wouldn't take anything that he said seriously.
$9/gal gas? Bring it! I drive 60 miles a week now on my car that gets 45-50mpg. So I'll spend $12/week in gasoline. Big deal. Plus, prices wouldn't last that long before they brought our economy down in flames, which would bring the price down right along with it.
What do you mean that's a bad thing? Wait, let me sell my house first! Oh, and liquidate all of my mutual funds! Maybe I should find a government job first too. Oh well.
$9/gal gasoline in the U.S? There would be rioting in the streets by all of those Type-A personality people complaining that they're spending $1,000/mo on gasoline for their H2 to get to their job where they make $8,000/mo. It's amazing how much rich people whine.
~Durandal (http://www.wtdwtshtf.com/)
Rep. Porter is a neo_____. We don't get a lot of Iraqi oil here. Al Qaeda will be driven out by Iraqi's if we leave. Iraq will still produce and sell oil after we leave, but will not sell to the US because of the unprovoked war on the Iraqi people. The Iraq war is a oil war and the Neo____'s will stop at nothing to keep the American people from forcing the end of the war, including fear mongering, lies, and intimidation. His statement is boiler plate fear mongering. "You can fool some of the people all the time, and fool all the people some of the time. But you can't fool all the people all the time"
"You can fool some of the people all the time, and fool all the people some of the time, and those aren't bad odds."
-- Bart Maverick
"You can fool some of the people all of the time; and that's our target market!"
Beer Bash Marketing Slogans, 1989
If I recall various sources correctly, $9/gal gas in the US corresponds to roughly $250/bbl crude. Guesses about world demand for crude at that price point are indeed guesses, but my own guess would be that demand would fall far enough that it could be met without ME supplies. That is, you have to predict that the US leaving Iraq will result in halting all exports from Saudi Arabia, Iran, the UAE, and Kuwait. While there may scenarios with that outcome, they strike me as unlikely (to say the least).
$9/gal will result in "rationing by price". If prices are headed for that level on a sharp rise, it seems more likely to me that Congress will impose price controls and "rationing by coupon" instead.
$9/gal gas? Bring it!
I'd be happy to 'bring it' to YOUR version of 'reality' - provided that you, and ONLY you, get to experience your request.
Alas, your desire can not be satisfied w/o effecting me and the many ppl I give a damn about.
Much of the pyramid of the economy (and the bottom tier who have guns/knives/clubs/1.75x3.75 lumber w-nails) will be willing to take a swing at those who have more than they have. Thus your "bring it" echo's in my ears the same way when "leadership" says "bring them on"
http://www.usatoday.com/news/world/iraq/2003-07-02-bush-iraq-troops_x.ht...
I look forward to your white paper about how your desire for $9 per gallon of gas works out.
This is not directed at you, Eric; it's just a follow up to your comment with several rhetorical questions. In other words, warning: rant ahead...
Why cite USA Today? It's right on the White House web site, with video and subtitles!
Just search for "bring" or go about half way into the video. Here's the context of the infamous "Bring 'em on" remark:
There's that word "prematurely" again. Rather, there it is the first time, only to be repeated many times in the 4+ years since, most recently in Rep. Porter's dribble this week. When, exactly, is a U.S. withdrawal from Iraq not considered "premature"? Contrary to the President's claims, I think I do understand correctly. A full withdrawal will never be premature. A couple of years ago Unknown News linked to some story about Iraq -- I can't find the link now and I forget the precise subject matter, but it was bad news for Iraqi people -- and in the sidebar there was a comment along the lines of, "We are raping that country. Every day we stay there the rape continues. The only way to move forward is to withdraw." As unpleasant as the rape metaphor is, it seems entirely accurate. If and when the U.S. military and its corporate mercenaries are withdrawn from Iraq, it will be late, not premature. Bush continued...
How's that going, Mr. President? Poland is gone. Ukraine is gone. Great Britain is on the way out. An estimated million Iraqis are dead. Heckuva job.
Blah, I'm going to bed. I've got to see if I get up early enough to make it down to the farmer's market tomorrow and then finish separating my red worms from their lovely pile of "castings."
Why cite USA Today?
It was the 1st link that met the search criteria.
And when the level of the responses is 'sun shines on crops therefore you are wrong' - why invest a whole lotta time
The hypothetical misfortune of living in the US with gas at $9 on one hand.
The not-so-hypothetical misfortune of losing a limb to an IED in Iraq.
Screw it. Bring on the pricy gas.
Agreed. I've always said I'm willing to pay as much as required to get a 1/3 reduction in miles driven.
Matt
Random comments:
This week the French President, Nicolas Sarkozy, warned against Russia’s use of energy as an instrument of foreign policy. ...
How do you say poodle in French?
At most, 10% of suburban households face incipient crisis in the short-term.
Whew! And I thought there was a problem.
Peak Oil may have put the United States on a collision course with China as the two nations compete for African oil reserves.
What a bold speculation!
Gasoline prices could rise to about $9 per gallon if the United States withdraws troops from Iraq prematurely, Rep. Jon Porter said he was told on a trip to Iraq that ended this week.
WT recently speculated, and I agree, that the gov't would more openly pitch the war as for oil.
Caniche
WT recently speculated, and I agree, that the gov't would more openly pitch the war as for oil.
The minute a $9 gasoline scenario goes public, the non-negotiable American Way of Life becomes a laughable oxymoron.
The national politicians will not like the results.
Enjoy the Labor Day weekend, because after that the Bush Regime propaganda machine is going into hyper-drive to drum up a pretext for a massive air attack against Iran.
So, if one wants to worry about $9 gasoline, forget Iraq and start worrying about what the global oil supply situation is going to look like after a US attack on Iran. Evidenly, some people supposedly in the know think it's not a matter of if but rather when. Time will tell, probably sooner than later.
Do you have a crystal ball or is there some more conventional basis for this prediction?
Two comments -
About the Chattak gas field:
"But more importantly, since the drill-hole was not cased by the drilling company, the gas from this layer found an easy way out of the open hole into the sandy porous layer above."
Who ever drilled a production gas well that wasn't cased?
And about the threat of $9 gasoline:
As usual, WT beats everybody to the punch. It's astonishing that the neocons can instantly, completely reverse their positions, from initially insisting that any connection between the Iraq invasion and oil security was blasphemous nonsense, to using that oil to threaten our American Way of Life if we fail to cooperate.
Chattak:
They say:
''There is perhaps another way of looking at it. The gas reserve in the Chattak gas field is divided into four layers at four depth levels. The top gas layer is at a depth of 550 m, with an estimated reserve of 115 Bcf. This is the one which was involved in the blow-out accidents, and a large amount of gas from this layer escaped to the surface through the drill pipe.''
KEY PHRASE: THRU THE DRILL PIPE: Sounds like they were drilling ahead in open hole (you have to reach section TD , pull drill pipe and THEN run casing) Shallow gas blow out then shut in and gas leaks into other, low pressure horizons .
This is then an underground blow out.
If they had a surface blow out from 550m, then it is more likely to have cratered (quite literally )and taken the well, the rig and any unhappy soul on board.
They say:
''But more importantly, since the drill-hole was not cased by the drilling company, the gas from this layer found an easy way out of the open hole into the sandy porous layer above. Thus, a huge amount of gas moved to the sandy layer in an uncontrolled way to form numerous gas pockets.''
No IADC driller or tool pusher would ever produce from an un-cased and un-cemented hole. Ever.
No Drilling Engineer would produce gas from an open hole. Ever.
This was uncontrolled, gas blow out. Shit Happens, sounds like low mud weight and loss of well control.
Sounds like BS to me.