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Being Street Smart
June 11
Sy Harding
But Go Away for How Long?
‘Sell in May and Go Away’ sure did work for the month of May, the worst May for the stock market since 1962. And so far the month of June has not been much better.
But go away for how long? Two months? Three months? July is usually a pretty good month for a summer rally isn’t it?
You could decide that, given the continuing global economic recovery, and that interest rates remain low and accommodative, the 10% correction already seen is more than sufficient and the correction is already over.
Or you might judge that the contagious debt crisis in Europe will spread, and combined with the austerity measures being imposed in European countries, will slow global economies, and that hasn’t been factored into stock prices by a mere 10% correction.
You could determine that investor sentiment remains too bullish and complacent for a correction bottom to be in yet, and that corporate insiders are still selling and usually begin buying again before a market correction ends.
Or you might look at technical charts and conclude the market is short-term oversold and due for at least a short-term rally that could get something going on the upside and leave the correction behind.
However, you could also look at convincing research that seems to say you don’t have to guess how long to stay away, don’t have to suffer headaches trying to fathom what cold winds blowing around the globe from Europe and China, or disappointing jobs or retail sales reports might do to the economic recoveries, and therefore to stock markets.
For instance, there is the mountain of evidence that supports the annual seasonal pattern from which the mantra ‘Sell in May and Go Away’ was born.
It says sell everything on May 1, and stay away until November 1, standing aside for the entire unfavorable period between, when history shows the market experiences most of its serious corrections and only in rare years experiences meaningful rallies.
Recognizing that the market does not top out into a correction on the same day in the spring every year, nor does it launch into a rally on the same day in the fall each year, in 1999 I introduced a similar strategy that has been one of the portfolios in my newsletter since. It is also based on the market’s annual seasonality, but utilizes a technical ‘momentum reversal’ indicator to better identify the best entry and exit dates each year. Its simple rules over the last 11 years resulted in a gain of 124% compared to a gain of 6.6% for the S&P 500 over what has become known to investors as ‘the lost decade’, in which two bear markets have devastated portfolios. Meanwhile the worst annual decline of the seasonal investor in those 11 years was 4.2%.
So, the market’s annual seasonal pattern says stay away until the October/November time-frame, take only 50% of market risk, and yet outperform the market, and therefore most professional money managers and mutual funds by a wide margin over the long-term (and the long-term is all that counts in investing).
Another consistent historical pattern may also be of assistance in this second year of the current Four-Year Presidential Cycle.
Since at least 1918, the stock market has experienced a substantial rally from the low in the 2nd year of every presidential administration to the high in the following year. That rally has averaged a gain of 50% for the Dow.
A study published in 2005 by Dr. Marshall D. Nickles of Pepperdine University showed that for the period from 1942 to 2004, if an investor bought the S&P 500 index on October 31 in the 2nd year of each presidential term, and held until December 31 of the following election year, he would not have lost money in any of those periods of being in the market, and would have gained a total of 7,170% (not counting interest on cash when out of the market).
He compared that to an investor being invested only in the opposite periods, who would have had losses in six of the 13 periods, the largest of which was 36%. And rather than see a 7,170% gain over the period, would have seen his original investment shrink by 35%.
I have a similar strategy based on the Four-Year Presidential Cycle that can have an entry as early as August 15 in the 2nd year of the cycle. (And we also have a non-seasonal Market-Timing Strategy, that will also help us identify when the bottom is in, and which takes also downside positions for profits in market declines).
So there you have proven seasonal strategies that say the odds are the low for the year will not be seen until at least August, but more likely not until the October/November time-frame.
Of course that does not preclude rallies in the meantime that fail at lower highs on the way down to the probable low later in the year. And you could also bet against the odds and, like playing a roulette wheel, might win occasionally and think you have something that will work long-term.
But now you know why I have been saying that the February low was probably not the market low for the year, and short-term rallies notwithstanding the low is still probably several months away, and is likely to be significantly lower.
President of the United States not allowed to post on IHUB
Posted by: Alex G Member Level Date: Wednesday, June 09, 2010 11:36:29 PM
do you think the current POTUS would be allowed to post on the nolib board?
and how long do you think this post will last without being deleted for "off topic" LOLOL
The Lounge | Politics | Zeev's Turnips Talk Politics (ZTTP)
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Posted by: Alex G Member Level Date: Wednesday, June 09, 2010 11:36:29 PM
In reply to: Vexari who wrote msg# 490259 Post # of 490270 Send a link via email Share on Facebook Tweet this post
do you think the current POTUS would be allowed to post on the nolib board?
and how long do you think this post will last without being deleted for "off topic" LOLOL
video of interview which led to miner's firing
http://www.post-gazette.com/multimedia/?autoStart=true&topVideoCatNo=default&clipId=4685647&flvUri=&partnerclipid=
Ex-Massey Miner: Safety Gripes Led To Firing
http://www.npr.org/templates/story/story.php?storyId=127529659
June 7, 2010
A former Massey Energy coal miner has filed a federal whistle-blower complaint, claiming he was fired after complaining about unsafe conditions at two Massey mines in West Virginia, NPR News has learned. One of the coal mines is Upper Big Branch, where an explosion killed 29 workers April 5.
Ricky Lee Campbell's complaint says he repeatedly told his supervisors about failing brakes on the coal shuttle cars he drove at the Slip Ridge Cedar Grove mine.
The 24-year-old from Beckley, W.Va., also spoke to a newspaper about unsafe conditions at Upper Big Branch, where he worked until shortly before the accident. And he provided information in the federal investigation of the blast.
Campbell spoke to the newspaper on April 7. A week later, he was given a five-day suspension "subject to discharge" and then fired April 23. He then filed the whistle-blower complaint with the Labor Department, contending that his persistent safety concerns, his media interview and his role in the federal probe prompted his termination.
A preliminary investigation by the agency concluded that Campbell's complaint "is not frivolous" and "there is reasonable cause to believe that Mr. Campbell's dismissal was motivated by his exercise of protected activities."
Egregious Citations Issued to BP
By Nathan Yau - Jun 6, 2010 - Data Sources
http://flowingdata.com/2010/06/06/egregious-citations-issued-to-bp/
BP processes about 1.5 million barrels of crude oil per day, across six refineries in the United States. In total, 150 refineries in the United States process just under 18 million barrels per day, so BP processes about 8.5 percent of it. However, as reported by the Center for Public Integrity, 97 percent of the most dangerous violations found by OSHA were on BP properties.
There are several levels of citations. The most dangerous are egregious willful and willful, in that order. Egregious citations are flagrant violations and willful citations are intentional disregard for employee safety and health.
Between June 2007 and February 2010, there were 761 egregious citations issued in total. All but one of them were issued to BP. In the same time period, 69 of the 91 willful citations also belonged to BP.
Most citations for other companies were in the serious category, meaning there was "substantial probability" of death or serious injury. There were 1,521 serious citations issued to non-BP refineries, versus BP's thirty. However, if we take into account barrels of oil processed by the rest, we get an even worse image of BP. Really, it's bad no matter how you look at it:
"The rig's on fire! I told you this was gonna happen!"
— By Josh Harkinson
| Mon Jun. 7, 2010 3:00 AM PDT
http://motherjones.com/blue-marble/2010/06/rigs-fire-i-told-you-was-gonna-happen
A prominent Houston attorney with a long record of winning settlements from oil companies says he has new evidence suggesting that the Deepwater Horizon's top managers knew of problems with the rig before it exploded last month, causing the worst oil spill in US history. Tony Buzbee, a lawyer representing 15 rig workers and dozens of shrimpers, seafood restaurants, and dock workers, says he has obtained a three-page signed statement from a crew member on the boat that rescued the burning rig's workers. The sailor, who Buzbee refuses to name for fear of costing him his job, was on the ship's bridge when Deepwater Horizon installation manager Jimmy Harrell, a top employee of rig owner Transocean, was speaking with someone in Houston via satellite phone. Buzbee told Mother Jones that, according to this witness account, Harrell was screaming, "Are you fucking happy? Are you fucking happy? The rig's on fire! I told you this was gonna happen."
Whoever was on the other end of the line was apparently trying to calm Harrell down. "I am fucking calm," he went on, according to Buzbee. "You realize the rig is burning?"
At that point, the boat's captain asked Harrell to leave the bridge. It wasn't clear whether Harrell had been talking to Transocean, BP, or someone else.
On Friday a spokesman for Transocean said he couldn't confirm or deny whether the conversation took place. He was unable to make Harrell available for an interview.
During hearings held late last month by the Coast Guard and the Minerals Management Service, Harrell denied any conflicts with his BP or Transocean bosses. He said that he did not feel pressured to rush the completion of the well, even though the rig had fallen behind schedule.
Yet Buzbee's claims add weight to other statements that contradict Harrell's version of events. Testifying before the Coast Guard and MMS panel last month, Douglas Brown, the chief mechanic on the Deepwater Horizon, said that on the morning of the day that the rig exploded Harrell had a "skirmish" over drilling procedures during a meeting with BP's "company man," well site leader Robert Kaluza. "I remember the company man saying this is how it's going to be," Brown told the panel. As Harrell was leaving the meeting, according to Brown, "He pretty much grumbled, 'I guess that's what we have those pincers for,'" referring to the blowout preventer on the sea floor that is supposed to be the last resort to prevent a leak in the event of an emergency. The blowout preventer failed following the explosion on the rig, causing the massive spill. (Transocean's chief electronics technician, Mike Williams, also recalled the argument but named a different BP "company man," BP's top official on the rig, Donald Vidrine).
In a statement to the Wall Street Journal, Transocean appeared to back the claims that Harrell had feuded with BP: "The testimony certainly seems to suggest that [Harrell] disagreed with the operator's instructions, but what those were and why he disagreed are matters that will ultimately be determined during the course of investigations."
Other rig workers have also claimed that they were pressured by BP and their supervisors to cut corners. Transocean roustabout Truitt Crawford told the Coast Guard that he overheard senior management saying that BP was "taking shortcuts" by replacing drilling mud in the well with saltwater, which would have provided less weight to contain the well's surging pressure. Transocean's Williams told 60 Minutes that a supervisor had dismissed evidence that the well's blowout preventer had been damaged. And workers with Halliburton, the well's cementing contractor, had complained that BP's use of cement "was against our best practices" and told the oil company that it would likely have "a SEVERE gas flow problem" unless the well's casings were centered more carefully.
Buzbee told Mother Jones that the sailor's version of Harrell's phone conversation following the explosion was corroborated by a statement from a second crew member who says he also overheard the call. Both statements were taken in-person by Buzbee's investigator and safety consultant, who has interviewed some 60 people involved in the disaster, and signed by the witnesses, he said. Buzbee declined to make the full statements available to Mother Jones because, he said, "it is work product, meaning that it is something that I do not have to produce or disclose in litigation but that can be used at the right time in the litigation." He added that he intends to take a deposition from the crew members at a later time.
Buzbee's case against the operators of the Deepwater Horizon is hardly his first foray into suing major oil companies. After a BP refinery in Texas City exploded in 2005, killing 15 workers and injuring dozens more, he won $100 million in punitive damages from the company. In the wake of the 2002 shipwreck of the Prestige oil tanker, which devastated the coast of Galicia, he won a $70 million settlement from Spain's government on behalf of the country's Basque region. And he's also nabbed $15 million from Transocean and $6.2 million from Halliburton for injured offshore oil workers.
Yet Buzbee is convinced that the Gulf oil spill lawsuit will be his biggest ever. "It's the grandaddy of all cases," he said. "This is going to define BP and whether BP survives. This is going to be the biggest case in the history of the United States, no doubt about it."
CORRECTION: An earlier version of this story incorrectly stated that Buzbee won a $70 million settlement from the American Bureau of Shipping for its role in the Prestige oil spill off the coast of Spain. The settlement came from Spain's government. Mother Jones regrets the error.
Evidence Indicates that the Bush Administration Conducted Experiments and Research on Detainees to Design Torture Techniques and Create Legal Cover
Illegal Activity Would Violate Nuremberg Code and Could Open Door to Prosecution
Physicians for Human Rights
June 7, 2010
FOR IMMEDIATE RELEASE
(Cambridge, MA) In the most comprehensive investigation to date of health professionals' involvement in the CIA's "enhanced" interrogation program (EIP), Physicians For Human Rights has uncovered evidence that indicates the Bush administration apparently conducted illegal and unethical human experimentation and research on detainees in CIA custody. The apparent experimentation and research appear to have been performed to provide legal cover for torture, as well as to help justify and shape future procedures and policies governing the use of the "enhanced" interrogation techniques. The PHR report, Experiments in Torture: Human Subject Research and Evidence of Experimentation in the 'Enhanced' Interrogation Program, is the first to provide evidence that CIA medical personnel engaged in the crime of illegal experimentation after 9/11, in addition to the previously disclosed crime of torture.
This evidence indicating apparent research and experimentation on detainees opens the door to potential additional legal liability for the CIA and Bush-era officials. There is no publicly available evidence that the Department of Justice's Office of Legal Counsel determined that the alleged experimentation and research performed on detainees was lawful, as it did with the "enhanced" techniques themselves.
"The CIA appears to have broken all accepted legal and ethical standards put in place since the Second World War to protect prisoners from being the subjects of experimentation," said Frank Donaghue, PHR's Chief Executive Officer. "Not only are these alleged acts gross violations of human rights law, they are a grave affront to America's core values."
Physicians for Human Rights demands that President Obama direct the Attorney General to investigate these allegations, and if a crime is found to have been committed, prosecute those responsible. Additionally, Congress must immediately amend the War Crimes Act (WCA) to remove changes made to the WCA in 2006 by the Bush Administration that allow a more permissive definition of the crime of illegal experimentation on detainees in US custody. The more lenient 2006 language of the WCA was made retroactive to all acts committed by US personnel since 1997.
"In their attempt to justify the war crime of torture, the CIA appears to have committed another alleged war crime – illegal experimentation on prisoners," said Nathaniel A. Raymond, Director of PHR's Campaign Against Torture and lead report author. "Justice Department lawyers appear to never have assessed the lawfulness of the alleged research on detainees in CIA custody, despite how essential it appears to have been to their legal cover for torture."
PHR's report, Experiments in Torture, is relevant to present-day national security interrogations, as well as Bush-era detainee treatment policies. As recently as February, 2010, President Obama's then director of national intelligence, Admiral Dennis Blair, disclosed that the US had established an elite interrogation unit that will conduct "scientific research" to improve the questioning of suspected terrorists. Admiral Blair declined to provide important details about this effort.
"If health professionals participated in unethical human subject research and experimentation they should be held to account," stated Scott A. Allen, MD, a medical advisor to Physicians for Human Rights and lead medical author of the report. "Any health professional who violates their ethical codes by employing their professional expertise to calibrate and study the infliction of harm disgraces the health profession and makes a mockery of the practice of medicine."
Several prominent individuals and organizations in addition to PHR will file a complaint this week with the US Department of Health and Human Services' Office for Human Research Protections (OHRP) and call for an OHRP investigation of the CIA's Office of Medical Services.
The PHR report indicates that there is evidence that health professionals engaged in research on detainees that violates the Geneva Conventions, The Common Rule, the Nuremberg Code and other international and domestic prohibitions against illegal human subject research and experimentation. Declassified government documents indicate that:
* Research and medical experimentation on detainees was used to measure the effects of large- volume waterboarding and adjust the procedure according to the results. After medical monitoring and advice, the CIA experimentally added saline, in an attempt to prevent putting detainees in a coma or killing them through over-ingestion of large amounts of plain water. The report observes: "'Waterboarding 2.0' was the product of the CIA's developing and field-testing an intentionally harmful practice, using systematic medical monitoring and the application of subsequent generalizable knowledge."
* Health professionals monitored sleep deprivation on more than a dozen detainees in 48-, 96- and 180-hour increments. This research was apparently used to monitor and assess the effects of varying levels of sleep deprivation to support legal definitions of torture and to plan future sleep deprivation techniques.
* Health professionals appear to have analyzed data, based on their observations of 25 detainees who were subjected to individual and combined applications of "enhanced" interrogation techniques, to determine whether one type of application over another would increase the subject's "susceptibility to severe pain." The alleged research appears to have been undertaken only to assess the legality of the "enhanced" interrogation tactics and to guide future application of the techniques.
Experiments in Torture: Human Subject Research and Experimentation in the 'Enhanced' Interrogation Program is the most in-depth expert review to date of the legal and medical ethics issues concerning health professionals' involvement in researching, designing and supervising the CIA's "enhanced" interrogation program. The Experiments in Torture report is the result of six months of investigation and the review of thousands of pages of government documents. It has been peer-reviewed by outside experts in the medical, biomedical and research ethics fields, legal experts, health professionals and experts in the treatment of torture survivors.
The lead author for this report was Nathaniel Raymond, Director of the Campaign Against Torture, Physicians for Human Rights (PHR) and the lead medical author was Scott Allen, MD, Co-Director of the Center for Prisoner Health and Human Rights at Brown University and Medical Advisor to PHR. They were joined in its writing by Vincent Iacopino, MD, PhD, PHR Senior Medical Advisor; Allen Keller, MD, Associate Professor of Medicine, NYU School of Medicine, Director, Bellevue/NYU Program for Survivors of Torture; Stephen Soldz, PhD, President-elect of Psychologists for Social Responsibility and Director of the Center for Research, Evaluation and Program Development at the Boston Graduate School of Psychoanalysis; Steven Reisner, PhD, PHR Advisor on Ethics and Psychology; and John Bradshaw, JD, PHR Chief Policy Officer and Director of PHR's Washington Office.
The report was extensively peer reviewed by leading experts in related medical, legal, ethical and governmental fields addressed in the document.
Physicians for Human Rights (PHR) mobilizes the health professions to advance the health and dignity of all people by protecting human rights. As a founding member of the International Campaign to Ban Landmines, PHR shared the 1997 Nobel Peace Prize.
http://physiciansforhumanrights.org/library/news-2010-06-07.html
Scientists skeptical about rush to build sand barriers
http://www.latimes.com/news/nationworld/nation/la-na-oil-spill-berms-20100606,0,7544795.story
Louisiana officials demand swift action to block oil, but berms are costly, fragile and potentially harmful.
Dolphins swim in heavily oiled waters off Grand Terre Island as a few boats skim in the pass.
Oil could be seen on the dolphins' fins. (Carolyn Cole, Los Angeles Times / June 5, 2010)
The frenzied response to the BP oil well blowout in the Gulf of Mexico has featured any number of wing-and-a-prayer options from engineers and elected officials. But the debate over a sand-barrier plan that skeptical scientists are referring to as "The Great Wall of Louisiana" has been the most politically charged.
Republican Gov. Bobby Jindal, Sen. David Vitter (R-La.) and angry parish presidents have hammered the Obama administration in past weeks over what they characterize as a glacial federal approval process for the state's plan to construct 128 miles of sand berms, dredging up 102 million cubic yards of seabed in the process, to bolster the state's barrier islands and absorb oil before it reaches sensitive coastal marshes.
The Army Corps of Engineers gave final approval last week to a scaled-down version of the project after rejecting the state's original proposal, which could have cost as much as $950 million and taken as long as nine months to build.
But as Jindal and other politicians celebrate the partial victory, coastal researchers warn that the project can't be built in time to help — even if it had been approved when first proposed last month. And scientists warn that it may have unforeseen consequences.
The berm system could reroute the spill up the Mississippi Delta, and it would be unlikely to survive even a mild storm during the current hurricane season.
It also will absorb the short supplies of sand badly needed for projects to restore the state's coastline, damaged by past hurricanes.
Heavy equipment, including barges and dredge lines, could interfere with nesting season, now at its peak, for protected bird species.
Even Coast Guard Adm. Thad Allen, who ultimately approved the project, was lukewarm in his endorsement.
"There are a lot of doubts whether this is a valid oil spill response technique, given the length of construction and so forth," he said in announcing the first of six berm sites at Scofield Island, west of the Mississippi River. "We are not averse to attempting this as a prototype."
BP, which was ordered by Allen to pick up the estimated $360 million cost of the revised 45-mile-long berm project, washed its hands of the outcome. "The company will not assume liability for unintended consequences," said spokesman Mark Proegler. "We're counting on the government to make the right decisions."
Although the state signed contracts with a dredging firm, BP has yet to provide the funding.
"To date, BP has done a great job in sending us press releases and attorneys, but they haven't sent us any money to dredge," Jindal said Friday. "We are moving ahead without BP. We gave them two choices: They can either send us a check, get out of the way and let us start this work, or they can sign a contract and do it themselves. We are going ahead without them."
The Army Corps of Engineers has located a dredger. "We could see sand by Monday," Jindal said.
Jindal's frenetic pace is part of the state's gamble on the "worth-a-shot" approach to protecting its bays and bayous, 140 miles of which are coated in oil. So far, the state has built a "marsh fringe barrier," made up of sand plugs and small berms, in four coastal parishes, and has filled sea-bottom depressions with sandbags. Workers have strung tall, four-sided Hesco basket barriers in bays and laid more than 750 miles of booms throughout the four-state gulf region.
The use of sand berms to collect oil has been around for some time but has never been employed on this scale. Jindal has been the plan's most vociferous booster.
Louisiana has for decades been fighting a losing battle to reestablish its barrier islands, low-lying sand spits where natural shifting and erosion have been exacerbated by the channelization of the Mississippi and by recent catastrophic hurricanes. The Chandeleur Islands once extended almost to the Mississippi coast but lost 85% of their land mass in Hurricane Katrina in 2005.
The looming tropical storm season has some scientists questioning the expenditure of money and resources on an experimental project. Although the berms will be 300 feet wide at their base, tapering to 25 feet at the top, a sand wall is not considered a robust structure.
The berms "will not survive even a low-intensity tropical storm in the northern gulf," said Jack Kindinger, director of the U.S. Geological Survey's Coastal and Marine Science Center in St. Petersburg, Fla. "If we have one next week, the berms will be gone. We have to be careful not to do more harm than good."
Kindinger said that the new barriers may increase tidal action in open water, which would boost the salinity in estuaries and alter the lives of marsh plants and wildlife.
In a similar manner, the project could inadvertently drive oil into the Mississippi sound, the Biloxi marshes and Lake Borgne, according to the Army Corps' analysis.
Gregory Stone, director of the Coastal Studies Institute at Louisiana State University, warned that scooping sediment out of the sea bottom could accelerate wave action.
"It's not advisable to go out into shallow water and dredge and not expect potential negative impacts," Stone said. "That's going to increase the energy of the waves."
Such worries prompted the Interior Department to conclude: "We do not think the risks inherent in proceeding without more environmental study and knowledge are acceptable."
Coastal scientists and oceanographers were brought in this week to present their views on the berm proposal to state and federal responders. Many said they were frustrated, wondering why their expertise was not brought to bear sooner.
"You cannot do this without some sort of reasonable quantification as to what will happen," Stone said. " I understand we are in a jam right now, but, good Lord, we have sophisticated computer models that can do this in a matter of weeks.… It's sort of unconscionable that we've gone well over a month without scientific input."
Denise Reed, interim director of the Pontchartrain Institute for Environmental Science at the University of New Orleans, said that given the construction timelines, expectations that the berms will stop oil are unrealistic.
"There is a public sense that this is the solution that we need," she said. "I found this proposal extremely difficult to evaluate because it's so idealized and conceptual.… We are not going into it with our eyes wide open."
julie.cart@latimes.com
Copyright © 2010, The Los Angeles Times
Leopards Can't Change Their Spots; Neither Can Wall Streeters
Leo Hindery, Jr.
Chairman, U.S. Economy/Smart Globalization Initiative at the New America Foundation
Posted: May 25, 2010 09:30 AM
Like so many who worked to defeat the Republicans in November 2008, I was convinced that despite the nightmarish economy we were about to 'inherit' in January 2009, in the process we were going to be given a once-in-a-lifetime opportunity. It would give government back to the middle class and throw out the 30 years of laissez faire financial regulatory practices that had almost single-handedly destroyed our economy, left us with greatest income inequality ever, and saddled future generations with crushing federal indebtedness.
The easiest target, and the one I was convinced we would tackle first, was Wall Street: the profit-driven, greedy, selfish institution that, with its unbridled compensation practices and current light-touch regulatory regime is, I truly believe, behind almost every major societal and economic ill that has befallen the United States since 1980.
I knew we couldn't change Wall Streeters, but when it came to reining them in, properly regulating them, and, in some cases, punishing them, it was going to be like shooting ducks in a barrel. All the pain they had caused was obvious, and the 'evidence' even then was laid out more clearly than in a Law & Order episode. And we would be finished early in 2009, for sure.
Well, as Pogo said in the long-ago comic strip, "We have met the enemy and he is us." We have already let Wall Street off the hook, as they say, for fully a year more than I ever thought possible, because of apologists for Wall Street within both the White House and Congress. But even more concerning, depending on how the upcoming House and Senate conference on financial regulatory reform legislation turns out, we may be about to give the Street 'soft-touch' regulatory reform that it will laugh about -- and again run to the bank with -- for at least a generation.
Once you've missed some or all of a God-given major regulatory reform opportunity, political exhaustion sets in and abusive practices become even more abusive and embedded. In the specific case of Wall Streeters, if we miss 'getting' them now, as they say, these greedy guys will simply get greedier and their practices more harmful as their securities become ever more complex and thus beyond any reasonable regulatory oversight capability.
As sort of a 'canary in the coal mine' to larger financial reform, we've seen on the relatively simple issue of trying to reform the abusive tax treatment of "carried interest," which costs the Treasury $10 to $12 billion per year, just how disingenuous, misleading and vile the anti-financial reform crowd can be. Thus it comes as no surprise that the very same tactics and in some cases, even the very same lies, which have been used over the last nearly four years to push back on carried interest reform have now been embraced by many of the Republicans who just voted against the Senate's finance reform bill. And the similarities between the two efforts will be even more apparent in coming weeks as the actual reconciliation with the House version takes place.
For example, last Thursday, Senator Richard Shelby (R-AL), ranking member of the Senate Banking Committee, said, with regard to the Senate Bill, "I cannot support legislation that threatens business conditions and threatens job creation." On the very same day, May 20, the President of the grossly self-serving Private Equity Council said that any change in the taxation of carried interest would "hurt those companies that are most desperately in need of capital to sustain or create jobs."
This is such B.S., as neither overall financial reform nor reforming carried interest has anything at all to do with 'job creation,' and it is unconscionable to threaten the American people this way. At the onset of this Great Recession, which we now know was brought on mostly by Wall Street and investment excesses, the number of real unemployed Americans was 16.8 million -- the number today is 30.3 million, an increase of 13.5 million, and we are 'short' 22 million jobs in order to be at or near full employment. Substantially and quickly reforming the villain that largely caused the Great Recession is the sine qua non to creating those 22 million jobs, not the other way around, as these fellows falsely insist.
The next several weeks are when the substantial financial industry reforms that were promised in the 2008 presidential campaign will come to pass -- or not. There will be at least seven 'indicators' of who won in conference, and pray God, it isn't, as it was in 1999, Wall Street and, to steal a phrase from President Obama, its "hoards of lobbyists", which have already spent an unbelievable $1 million per Member of Congress (more than $500 million in total!) lobbying on these issues.
Specifically, we need to see:
1. As proposed by the House, the consumer protection reform goals met through a stand-alone agency (the "Consumer Financial Protection Agency") subject to annual budget appropriations by Congress, rather the Senate's weak alternative of a consumer protection bureau within the Federal Reserve. (This has everything to do with foxes, chickens and henhouses, and the idea of housing consumer protection within the ineffective and uninterested Federal Reserve needs to fail.)
2. Ideally, no compromise, least of all by the administration, on Senator Lincoln's (D-AR) requirement that big banks spin off their trading in swaps into separate subsidiaries. But if the Senator fails, and the strength of the opposition within the administration suggests sadly that she will, then at least the House version of the so-called "Volcker Rule" has some teeth, whereas the Senate's (which is Geithner's) version calls for nothing more than a namby-pamby "period of study".
3. No 'shielding' of auto dealers from oversight by the new consumer agency. The House is just wrong on this.
4. As proposed by Senators Cantwell (D-WA) and Feingold (D-WI), and others, no loopholes when it comes to regulating the trading of derivatives.
5. Application of the concept of "insurable interest" to all credit default swaps, together with the outright barring of "naked" credit default swaps. Regarding the latter, just as you can't take out a life insurance policy on a stranger, you shouldn't be able to use swaps as a form of 'death insurance' to bet that an asset or financial activity will fail.
6. No compromise when it comes to insisting that "failing" financial institutions be reviewed by a special panel of bankruptcy judges. (There is no good reason for the administration to be resisting this, and they shouldn't.)
7. Some restrictions on excessive compensation overall and especially at "failing" institutions, to absolutely include the 'clawing back' of ill-gotten individual earnings. If not now and not in this bill, then when and where?
Wall Street is desperately in need of reform, yet, because of the ways it compensates itself, it is incapable of self-reform and fairness. We know from countless examples its self-serving (and selfish) tactics, we know the harm it has done, and we know the even greater harm it can do if left unchecked.
President Obama needs to vigorously and resolutely weigh in on the House-Senate conference efforts and make sure that the bill that comes out of the reconciliation process reflects the results and values that he talked about during his campaign -- he simply cannot leave it to Wall Street and its industry lobbyists, to the 'diluters' and 'over-compromisers' on Capitol Hill, or to the Wall Street apologists within his own administration and hope that Congress produces strong financial regulatory reform legislation. Opponents of reform learned years ago, more than proponents ever have, that 'in conference' is where reforms can easily die (and greedy guys can win even more).
Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations. Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband. He also serves on the Board of the Huffington Post Investigative Fund.
http://www.huffingtonpost.com/leo-hindery-jr/leopards-cant-change-thei_b_588491.html
Where are the jobs?
Intermedia Partners’ Leo Hindery talks about the May jobs report and whether America can expect a double dip recession.
http://www.msnbc.msn.com/id/31510813/#37517303
http://motherjones.com/files/Congressional_Letter_re_BP-1.pdf
Ms. Elizabeth Bimbaum, Director
Minerals Management Service
Department of the Interior
1849 C Street, N.W.
Washington, DC 20240
Dear Director Bimbaum:
In recent months, we have heard disturbing reports regarding British Petroleum’s (BP) Atlantis
platform in the Gulf of Mexico. This platform, the largest oil and natural gas platform in the
world, may be operating without crucial engineering documents, which, if absent, would increase
the risk of a catastrophic accident that would threaten not only the workers on the platform, but
also the Gulf of Mexico and the communities who depend on the resources it provides.
In March 2009, a whistleblower notified the Minerals Management Service (MMS) that he
believed BP did not have required engineer-approved drawings for BP Atlantis’s subsea
components. Industry standards and federal regulations require the company to have these
documents before any platform can start production. These include “as-built” drawings, which
are essentially an operator’s guide to how the platform components work from start up to shut
down and are critical for operators to have at their disposal.
A review of BP’s database in existence at that time and provided by the whistleblower appears to
show that of the over 7,176 documents and drawings for Atlantis’s subsea components --- a total
of 6,393 of them --- over 90% --- may not have been approved by a professional engineer, as
required by regulation. BP’s own internal communication indicates that using incomplete or
inaccurate documents “could lead to catastrophic Operator errors due to their assuming the
drawing is correct.”
We are also concerned that your interpretation of 30 C.F.R. § 250.903(a)(1), and its application
to approval of operations at Atlantis indicates a less than acceptable standard. Specifically,
communications between MMS and congressional staff have suggested that while the company
by law must malntain “as-built” documents, there is no requirement that such documents be
complete or accurate. This statement, if an accurate interpretation of MMS authorities, raises
serious concerns.
MMS owes it to all American taxpayers to fully investigate the allegations made related to
environmental and safety standards of domestic offshore energy production. The urgency of
these allegations is highlighted by the recent oil spill in the Timor Sea that, according to one
source, leaked 2000 barrels per day for 10 weeks before it was finally stopped after five attempts
by the operator. These accidents are a reminder that even as drilling technology and clean-up
methods have improved there is still a considerable risk to the environment, and public health
and safety precautions should be taken seriously by both MMS and industry.
The MMS has an obligation and a duty to ensure that natural resource extraction from public
lands and the outer Continental Shelf is done with the utmost concern for the environment and
the health and safety of workers and the public. Making sure that these standards are adhered to
will take on added importance as the nation sets its sights on a national agenda of energy
independence. It is critical that we get this right.
We urge MMS to conduct a full investigation of whether British Petroleum had a complete and
accurate set of required engineering drawings for the BP Atlantis platform and its associated
subsea components prior to the start of production from that platform, and to report back to
Congress on the results of that investigation as soon as possible. We also request that MMS
describe how a regulation that requires offshore operators to maintain certain engineering
documents, but does not require that those documents be complete or accurate, is appropriately
protective of human health and the environment.
We look forward to hearing from you about this matter.
The Next Deepwater Horizon?
Fri Jun. 4, 2010 3:00 AM PDT
http://motherjones.com/politics/2010/06/next-deepwater-horizon
Last week, President Barack Obama put new deepwater drilling operations on hold for another six months. With the Gulf of Mexico spill entering its fifth week, this move was meant to show that the administration is taking a more cautious approach to offshore drilling, after it had announced a vast expansion just weeks before the BP disaster.
Many news accounts on the moratorium extension implied that all deepwater Gulf operations had been shut down. But that's not the case. The administration is allowing deepwater drilling operations already in production in the Gulf to continue—including some that may pose a greater risk than the Deepwater Horizon. Exhibit A: BP's other major Gulf operation, the Atlantis, which sits 124 miles off the Louisiana coast.
Kenneth Abbott, a project control supervisor BP contracted to work on the Atlantis, and the environmental group Food & Water Watch filed suit against the federal government on May 17 seeking a temporary injunction to force the Minerals Management Service (MMS) to shut down the platform. Abbott claims that his contract was terminated shortly after he alerted management to the rig's lack of crucial engineering documents in late 2008.
According to Abbott, the BP Atlantis lacks more than 6,000 documents that are key to operating the rig safely. Abbott has said that the vast majority of the project's subsea piping and instrument diagrams were not approved by engineers, and the safety systems are out of date. In March 2009, Abbott took his concerns about the rig to MMS, the Department of Interior office responsible for regulating offshore drilling. He says the agency requested some of these documents from BP, but failed to seek specific diagrams of key components necessary for ensuring the rig's secure operation.
An internal BP email that came out in the course of Abbott's dispute refers to the potential for "catastrophic operator errors" on the rig due to these lapses. The suit argues that without these documents, the rig operators "are flying blind, and have no way to assure the safety of offshore drilling operations." Food & Water Watch began pushing for lawmakers to intervene on the rig back in August 2009.
A group of 19 Democratic House lawmakers raised concerns about the Atlantis in a letter to MMS in February, noting "disturbing reports" of safety lapses and warning of the "risk of a catastrophic accident." In a May 19 letter, those lawmakers, led by Rep. Raul Grijalva (D-Ariz.), urged Interior Secretary Ken Salazar to call for "an immediate shutdown [of the Atlantis rig] until it can be shown that this platform is operating safely." The Atlantis, which produces 200,000 barrels of oil a day, operates 7,000 feet below the sea surface—2,000 feet deeper than the Deepwater rig. That suggests that if a blowout occurred, the Atlantis could release far more oil than the Deepwater well. "We are very concerned that the tragedy at Deepwater Horizon could foreshadow an accident at BP Atlantis," the House members wrote.
MMS promised House members after their initial letter that the agency would conduct an audit of the Atlantis and issue a report by the end of May. But that report has been delayed due to the Gulf disaster, according to the agency.
Elizabeth Birnbaum, who served as head of MMS until she resigned amid criticism of the beleaguered agency last month, told a House panel on May 26 that the agency has reviewed operations at the Atlantis and has "not found anything" indicating that the rig should be shut down. But Grijalva believes that the agency may just be inspecting the inadequate paperwork that it has already approved without giving the rig any closer scrutiny.
This contention is also supported by Food & Water Watch, which submitted a Freedom of Information Act request on March 1 to MMS for records related to agency employees conducting inspections of the Atlantis rig's subsea documents. The request was rejected—an MMS FOIA officer stated that the agency doesn't require documentation of the subsea components as they were built. Food & Water Watch says that without reviewing those documents, MMS would be unable to truly determine whether or not the rig was safe.
In the past weeks, Obama has repeatedly criticized the "cozy" relationship between oil companies and federal regulators. And the Department of Interior’s report on the offshore operations calls for new inspection and reporting procedures, tighter enforcement of existing rules, and the development of "new, faster ways of stopping blowouts in deepwater," among other recommendations. Yet at a Senate hearing last month, Interior Secretary Ken Salazar shrugged off the suggestion that the administration should pause operations that were approved under the same lax system that allowed the Deepwater rig in the first place. "We were not going to have those stopped mid-way," Salazar told senators.
"We're missing an opportunity, the administration is, by not insisting that production be suspended until we fully investigate the allegations," says Grijalva in an interview. "There's not only urgency to it, but it would be a prudent, politically smart thing for them to do as well.”
"It's clear to us that while there are problems with the entire industry, BP is probably the worst actor in terms of cutting corners, not having safety procedures, not having the necessary safety tech for operating platforms," said Wenonah Hauter, executive director of Food & Water Watch. "There should be a review by MMS of all the operating platforms to make sure safety documents and procedures are in place." (A spokesperson for Abbott could not be reached for comment.) The Center for Biological Diversity has also filed suit against the Department of Interior for granting waivers to the National Environmental Protection Act for Gulf leases, and has signaled that it intends to sue over non-enforcement of both the Marine Mammals Protection Act and Endangered Species Act in the Gulf.
Meanwhile, the group of House members are going to continue to push for a halt on all drilling operations. Says Grijalva, "Given the track record of industry and the track record of the agency in charge of oversight, it just seems to be the one safe route to take right now to assure the American people that another catastrophe won't happen."
Kate Sheppard covers energy and environmental politics in Mother Jones' Washington bureau. For more of her stories, click here. She Tweets here.
Suryia The Orangutan And Roscoe The Hound Dog
http://andrewsullivan.theatlantic.com/the_daily_dish/2010/06/suryia-the-orangutan-and-roscoe-the-hound-dog.html
Support for Wall Street Reform Grows
A CNN/Opinion Research survey indicates that a growing number of Americans support increased federal regulation over banks and other financial institutions. Six out of ten people questioned say they favor the legislation, with 38% opposed.
Support for the bill is up seven points from March, and opposition is down five points.
http://politicalticker.blogs.cnn.com/2010/06/02/cnn-poll-americans-split-on-top-two-obama-initiatives/?fbid=NVkFFm3fpp5
Fiorina Dismisses Global Warming as the Weather
In a new ad, Carly Fiorina (R) mocks Sen. Barbara Boxer's (D-CA) concern for climate change as a national security issue.
Says Fiorina: "Terrorism kills -- and Barbara Boxer's worried about the weather."
Ben Smith says it's "either a sign that global warming is no longer taken seriously even in California, or a very odd political calculation."
comments:
Um, Carly says--in the context of a national security ad--that she's "battle tested?!?" How stupid can you get? How long will it be before someone asks what the hell she means by that? What battles? ? Is she claiming combat experience, or just sounding ridiculous by throwing around those words without thinking for a second about what they actually mean?
(Also, whenever I hear her say, "I ran H. P.,"? I can't help but complete the phrase with "...into the ground.")
The rate of joblessness dropped in 346 areas, rose in 12 and remained flat in 14. That is a significant month-to-month improvement, as in March, unemployment fell in 257 metro areas and climbed in 89. [...]
Economists expect the economy to have added 500,000 jobs and the overall unemployment rate to track down.
http://washingtonindependent.com/86236/unemployment-falls-in-93-percent-of-metro-areas
Robert Gibbs: Oil crisis “solved by plugging hole & responding to damage done, not by method acting”
Wednesday, June 2, 2010 at 4:24 PM
Jake Tapper has a good quote from Robert Gibbs:
“If the president thought that yelling at the top of his lungs would solve this crisis, he would stand on top of the White House and do that. But he believes this crisis will be solved by plugging the hole and responding to the damage done, not by method acting.”
He was responding to the criticism of President Obama’s coolness in the face of the gigantic oil volcano crisis. There have been numerous calls for him to be more emotional, which of course, would be gratifying, because we could all relate to that so easily. It’s reassuring somehow, and even cathartic, to see someone as unflappable as President Obama get all wee-wee’d up with us.
However, Gibbs is right. Taking action, getting something done, solving problems all take precedence over being Prez Emo. I believe he feels our pain, despite the fact that I wouldn’t mind seeing him reveal his feelings from time to time.
It’s more comforting to know that he can stay calm in the midst of a calamity while the rest of us are tearing our hair out. He deserves credit for that.
Incredible sinkhole in Guatemala City caused by rains from tropical storm Agatha
http://www.flickr.com/photos/gobiernodeguatemala/
Guatemala: First, volcanic eruption; then, devastating tropical storm
Xeni Jardin at 10:55 AM Monday, May 31, 2010
http://www.boingboing.net/2010/05/31/guatemala-first-volc.html#more
Guatemala is in a state of crisis today after twin natural calamities struck: First, the Pacaya volcano (close to the capital) became active. Lava flowed, and the volcano spewed black sand and rock and ash everywhere. A newscaster covering the event, near the volcano, was killed by flying rocks.
Then, tropical storm "Agatha" struck, destroying homes, causing floods, and creating tens of thousands of internally displaced. Infrastructure in this country—where the majority live in poverty—is very poor, and ill-equipped to handle such a double blow. As of last night, official numbers on storm: about 30,000 "refugees," close to 120,000 evacuated, 93 dead and rising.
The poorest always suffer the most when events like this happen, and the two events together caused surreal conditions: knee-deep black sand mud, and "instant concrete" which formed when rains met ash, clogging up drains and laying waste to fragile sewage systems. Said a friend on Twitter, "Water and sand everywhere... it's like the beach, only a lot less fun."
Guatemala isn't the only Central American nation affected: at least 10 are dead in El Salvador, and Honduras has declared a state of emergency.
Offshore drilling ban would be a blow to Louisiana economy
By Rebecca Mowbray, The Times-Picayune
May 30, 2010, 10:16PM
Port Fourchon is the launching point for 90 percent of the deepwater activities in the Gulf of Mexico.
To coastal communities and marine-related industries across southern Louisiana, President Barack Obama's announcement Thursday that work at 33 deepwater drilling operations would be suspended immediately was like sealing the region's economic death from the ongoing oil plume gushing into the Gulf of Mexico.
"It's bad enough that we have an oil spill to deal with and the fishermen can't work. Now they're going to take away the oil industry, and we'll have nothing, " said Chett Chiasson, executive director for the Greater Lafourche Port Commission, which runs Port Fourchon, the launching point for 90 percent of the deepwater activities in the Gulf of Mexico.
If the rigs stop prospecting for oil, then catering companies stop cooking food for rig workers, boats stop bringing them supplies, mechanics stop servicing the supply boats and so on.
Chiasson predicts the hardest-hit communities will lose jobs that won't easily be recovered.
"This industry should not have to suffer because of one company's horrible mistake, " Chiasson said. "This will cause people to lose their jobs. I have no doubt about it."
The president and Interior Secretary Ken Salazar's announcement late last week to halt all deepwater drilling in the Gulf of Mexico "at the first safe stopping point" while the Interior Department figures out what regulatory changes are necessary for offshore oil prospecting seemed designed to reassure the nation that drilling would only proceed in a safe and environmentally sensitive manner.
But to those who work in the offshore industry and in the communities at the epicenter of the spiraling disaster from the April 20 Deepwater Horizon rig explosion and oil leak, it smacked of a lack of understanding of the role that the oil business plays in the Louisiana economy.
In the 2008 presidential election, no coastal parishes except for Orleans supported Obama; last week's offshore drilling announcement only seemed to make his administration even less popular in the oil-affected parishes.
"The president now needs to come down and talk to the offshore industry and reassure us that we're not going to be thrown to the wolves. I think they owe us that, " said Ken Wells, president of the Offshore Marine Service Association. "Our economy around here cannot sustain a collapse of this industry."
Sixteen companies have operations that will be affected by the six-month shutdown, including Shell, Chevron, BP, Marathon, Eni, Petrobras, Hess and LLOG Exploration, a Metairie-based division of Hess.
The Interior Department won't release the names of the wells or locations, saying the information is proprietary.
On Friday, people across the offshore industry were trying to get clarification on exactly what the requirements of the shutdown would be and whether it's really for six months.
On Sunday, the Minerals Management Service issued some additional guidance. That bulletin does not say that the drilling hiatus will be limited to six months; it only says that new permits won't be issued for six months.
The notice also raises the possibility that the shutdowns could affect wells that are in production.
"To obtain approval to conduct an activity in support of existing deepwater production, you must submit your request..." the notice reads. Applications must include a detailed, site-specific risk analysis with discussion about how to handle a loss of well control.
Shell Exploration and Production said it wouldn't have anything to say about how its operations would be affected until this week. Chevron said that it is drilling one well now in the Gulf of Mexico and had planned to drill three others this year. The California company, which has offices in Covington, said Friday it is working with the Interior Department and awaiting specific notice on what it is required to do.
Louisiana Economic Development Secretary Stephen Moret has had a team working to assess the moving target of the economic impact of the rig explosion since late April.
So far, it looks like 22 of the 33 rigs that are affected are off the coast of Louisiana, Moret said, and it's possible that some of the remaining 11 could be rigs that were scheduled to start operations in Louisiana waters in the next few months.
Depending on how the rules shake out, Moret has three scenarios for how bad the moratorium could be for Louisiana's economy.
Within a very short time, Moret believes the state will lose 3,000 to 6,000 direct and indirect jobs.
If the suspensions are maintained, it could rise to 10,000 jobs. And if the moratorium persists while oil prices rise, the state could lose 20,000 jobs over the next 12 to 18 months in the form of lost direct and indirect jobs, and missed job creation opportunities because rising petroleum prices stimulate more energy development.
Since it's unclear what's involved with the shut-downs, it's unclear whether companies will keep their rigs afloat in the Gulf with a skeleton crew or move them to Brazil, which is considered one of the world's biggest deepwater drilling opportunities.
The cost of keeping the rigs idle is significant. BP, for example, was renting the Deepwater Horizon semi-submersible rig from Transocean Ltd. for $500,000 a day before it exploded and sank.
"There's definitely a real risk that some of these rigs could be moved outside of the Gulf of Mexico because of the cost of keeping them idle, the regulatory uncertainty and opportunities in other parts of the world, " Moret said.
Others are convinced that rigs will be floated to foreign waters, and if they're moved, it will take two to three years for the equipment to finish up its new contracts elsewhere and come back.
"The drilling equipment and the rigs, if they know that they can't work for the next six months, they'll re-deploy to the rest of the world. It will be a lot longer than the next six months, " said Otto Candies III, secretary/treasurer of the Des Allemands marine transport company Otto Candies LLC, who called the president's announcement "a knee-jerk reaction."
Candies said his company employs 500 and has a supplier list of 100 companies, so the impact at his company would be wide.
Shane Guidry, chairman and chief executive of Harvey Gulf International Marine LLC in New Orleans, said that his company services all of the deepwater drilling operations in the Gulf. But his company also operates around the world, so it will be affected in several ways.
Harvey Gulf won a three-year contract in February to support Shell Oil's exploration and production work in Alaska, but Guidry said that deal will be scuttled by the moratoriums.
Guidry is convinced that companies will tow their rigs to foreign waters.
Because his company does work in places like Mexico, Trinidad and Brazil, and is interested in expanding to Africa, he'll be able to follow the rigs and retain work, but he said it's Louisiana that loses.
If he sends his boats to Brazil or Africa, he'll need to hire local workers there and re-flag his vessels, which means it won't be easy to bring them back to the Gulf of Mexico in a few years if activity cranks up.
"He has no idea what he's done, " Guidry said of the president. "We'll follow them out of the country. We'll re-deploy boats to other regions. It's really sad."
Those servicing the offshore industry say that deepwater drilling is a lot more fragile than one might think.
After oil prices crashed in 1999, deepwater drilling activity in the Gulf of Mexico didn't really get going again until 2004.
Then, with the recession and oil prices crashing in late 2008 and companies' concerns about their ability to raise capital, many drilling plans got put on hold.
With the nation emerging from recession and prices beginning to creep up, companies have only recently begun to initiate new exploration projects. Because drilling in deep water is so expensive, it's very price-sensitive.
Meanwhile, deepwater drilling is the best opportunity in the Gulf of Mexico.
With shallow finds largely tapped out, some 70 percent of the oil in the Gulf of Mexico comes from deepwater or ultra-deep water, meaning depths of 5,000 to 10,000 feet. But planning a new well takes about a year, and with the western Gulf of Mexico lease sale in August being canceled, the moratoriums could deter new operations for years to come.
Actions the Interior Department is taking on offshore drilling
-- Companies must cease drilling all new deepwater wells. Although the term "deepwater" generally means more than 5,000 feet, the directive applies to activities in more than 500 feet of water.
-- Companies that have been approved for an application for a permit to drill, but which have not yet started drilling the well, are prohibited from doing so.
-- MMS will not consider drilling permits for deepwater wells and related activities for six months.
-- Companies must secure the well being drilled "at the next safe opportunity, " and must submit plans to stop operations by Tuesday at 5 p.m. eastern time.
-- The August lease sale for the Gulf of Mexico is canceled. A proposed lease sale off the coast of Virginia is canceled, and proposed exploratory drilling in the Arctic is suspended.
-- Existing deepwater production wells may also be affected. Companies that want to continue existing deepwater production must submit a request to MMS that includes information about the well, safety systems and a "structured risk analysis" about the requested drilling activity. The risk analysis must include discussion about the risks of losing well control specific to that site.
Nigeria's agony dwarfs the Gulf oil spill. The US and Europe ignore it
The Deepwater Horizon disaster caused headlines around the world, yet the people who live in the Niger delta have had to live with environmental catastrophes for decades
A ruptured pipeline burns in a Lagos suburb after an explosion in 2008 which killed at least 100 people. Photograph: George Esiri/Reuters
http://www.guardian.co.uk/world/2010/may/30/oil-spills-nigeria-niger-delta-shell
We reached the edge of the oil spill near the Nigerian village of Otuegwe after a long hike through cassava plantations. Ahead of us lay swamp. We waded into the warm tropical water and began swimming, cameras and notebooks held above our heads. We could smell the oil long before we saw it – the stench of garage forecourts and rotting vegetation hanging thickly in the air.
The farther we travelled, the more nauseous it became. Soon we were swimming in pools of light Nigerian crude, the best-quality oil in the world. One of the many hundreds of 40-year-old pipelines that crisscross the Niger delta had corroded and spewed oil for several months.
Forest and farmland were now covered in a sheen of greasy oil. Drinking wells were polluted and people were distraught. No one knew how much oil had leaked. "We lost our nets, huts and fishing pots," said Chief Promise, village leader of Otuegwe and our guide. "This is where we fished and farmed. We have lost our forest. We told Shell of the spill within days, but they did nothing for six months."
That was the Niger delta a few years ago, where, according to Nigerian academics, writers and environment groups, oil companies have acted with such impunity and recklessness that much of the region has been devastated by leaks.
In fact, more oil is spilled from the delta's network of terminals, pipes, pumping stations and oil platforms every year than has been lost in the Gulf of Mexico, the site of a major ecological catastrophe caused by oil that has poured from a leak triggered by the explosion that wrecked BP's Deepwater Horizon rig last month.
That disaster, which claimed the lives of 11 rig workers, has made headlines round the world. By contrast, little information has emerged about the damage inflicted on the Niger delta. Yet the destruction there provides us with a far more accurate picture of the price we have to pay for drilling oil today.
On 1 May this year a ruptured ExxonMobil pipeline in the state of Akwa Ibom spilled more than a million gallons into the delta over seven days before the leak was stopped. Local people demonstrated against the company but say they were attacked by security guards. Community leaders are now demanding $1bn in compensation for the illness and loss of livelihood they suffered. Few expect they will succeed. In the meantime, thick balls of tar are being washed up along the coast.
Within days of the Ibeno spill, thousands of barrels of oil were spilled when the nearby Shell Trans Niger pipeline was attacked by rebels. A few days after that, a large oil slick was found floating on Lake Adibawa in Bayelsa state and another in Ogoniland. "We are faced with incessant oil spills from rusty pipes, some of which are 40 years old," said Bonny Otavie, a Bayelsa MP.
This point was backed by Williams Mkpa, a community leader in Ibeno: "Oil companies do not value our life; they want us to all die. In the past two years, we have experienced 10 oil spills and fishermen can no longer sustain their families. It is not tolerable."
With 606 oilfields, the Niger delta supplies 40% of all the crude the United States imports and is the world capital of oil pollution. Life expectancy in its rural communities, half of which have no access to clean water, has fallen to little more than 40 years over the past two generations. Locals blame the oil that pollutes their land and can scarcely believe the contrast with the steps taken by BP and the US government to try to stop the Gulf oil leak and to protect the Louisiana shoreline from pollution.
"If this Gulf accident had happened in Nigeria, neither the government nor the company would have paid much attention," said the writer Ben Ikari, a member of the Ogoni people. "This kind of spill happens all the time in the delta."
"The oil companies just ignore it. The lawmakers do not care and people must live with pollution daily. The situation is now worse than it was 30 years ago. Nothing is changing. When I see the efforts that are being made in the US I feel a great sense of sadness at the double standards. What they do in the US or in Europe is very different."
"We see frantic efforts being made to stop the spill in the US," said Nnimo Bassey, Nigerian head of Friends of the Earth International. "But in Nigeria, oil companies largely ignore their spills, cover them up and destroy people's livelihood and environments. The Gulf spill can be seen as a metaphor for what is happening daily in the oilfields of Nigeria and other parts of Africa.
"This has gone on for 50 years in Nigeria. People depend completely on the environment for their drinking water and farming and fishing. They are amazed that the president of the US can be making speeches daily, because in Nigeria people there would not hear a whimper," he said.
It is impossible to know how much oil is spilled in the Niger delta each year because the companies and the government keep that secret. However, two major independent investigations over the past four years suggest that as much is spilled at sea, in the swamps and on land every year as has been lost in the Gulf of Mexico so far.
One report, compiled by WWF UK, the World Conservation Union and representatives from the Nigerian federal government and the Nigerian Conservation Foundation, calculated in 2006 that up to 1.5m tons of oil – 50 times the pollution unleashed in the Exxon Valdez tanker disaster in Alaska – has been spilled in the delta over the past half century. Last year Amnesty calculated that the equivalent of at least 9m barrels of oil was spilled and accused the oil companies of a human rights outrage.
According to Nigerian federal government figures, there were more than 7,000 spills between 1970 and 2000, and there are 2,000 official major spillages sites, many going back decades, with thousands of smaller ones still waiting to be cleared up. More than 1,000 spill cases have been filed against Shell alone.
Last month Shell admitted to spilling 14,000 tonnes of oil in 2009. The majority, said the company, was lost through two incidents – one in which the company claims that thieves damaged a wellhead at its Odidi field and another where militants bombed the Trans Escravos pipeline.
Shell, which works in partnership with the Nigerian government in the delta, says that 98% of all its oil spills are caused by vandalism, theft or sabotage by militants and only a minimal amount by deteriorating infrastructure. "We had 132 spills last year, as against 175 on average. Safety valves were vandalised; one pipe had 300 illegal taps. We found five explosive devices on one. Sometimes communities do not give us access to clean up the pollution because they can make more money from compensation," said a spokesman.
"We have a full-time oil spill response team. Last year we replaced 197 miles of pipeline and are using every known way to clean up pollution, including microbes. We are committed to cleaning up any spill as fast as possible as soon as and for whatever reason they occur."
These claims are hotly disputed by communities and environmental watchdog groups. They mostly blame the companies' vast network of rusting pipes and storage tanks, corroding pipelines, semi-derelict pumping stations and old wellheads, as well as tankers and vessels cleaning out tanks.
The scale of the pollution is mind-boggling. The government's national oil spill detection and response agency (Nosdra) says that between 1976 and 1996 alone, more than 2.4m barrels contaminated the environment. "Oil spills and the dumping of oil into waterways has been extensive, often poisoning drinking water and destroying vegetation. These incidents have become common due to the lack of laws and enforcement measures within the existing political regime," said a spokesman for Nosdra.
The sense of outrage is widespread. "There are more than 300 spills, major and minor, a year," said Bassey. "It happens all the year round. The whole environment is devastated. The latest revelations highlight the massive difference in the response to oil spills. In Nigeria, both companies and government have come to treat an extraordinary level of oil spills as the norm."
A spokesman for the Stakeholder Democracy Network in Lagos, which works to empower those in communities affected by the oil companies' activities, said: "The response to the spill in the United States should serve as a stiff reminder as to how far spill management in Nigeria has drifted from standards across the world."
Other voices of protest point out that the world has overlooked the scale of the environmental impact. Activist Ben Amunwa, of the London-based oil watch group Platform, said: "Deepwater Horizon may have exceed Exxon Valdez, but within a few years in Nigeria offshore spills from four locations dwarfed the scale of the Exxon Valdez disaster many times over. Estimates put spill volumes in the Niger delta among the worst on the planet, but they do not include the crude oil from waste water and gas flares. Companies such as Shell continue to avoid independent monitoring and keep key data secret."
Worse may be to come. One industry insider, who asked not to be named, said: "Major spills are likely to increase in the coming years as the industry strives to extract oil from increasingly remote and difficult terrains. Future supplies will be offshore, deeper and harder to work. When things go wrong, it will be harder to respond."
Judith Kimerling, a professor of law and policy at the City University of New York and author of Amazon Crude, a book about oil development in Ecuador, said: "Spills, leaks and deliberate discharges are happening in oilfields all over the world and very few people seem to care."
There is an overwhelming sense that the big oil companies act as if they are beyond the law. Bassey said: "What we conclude from the Gulf of Mexico pollution incident is that the oil companies are out of control.
"It is clear that BP has been blocking progressive legislation, both in the US and here. In Nigeria, they have been living above the law. They are now clearly a danger to the planet. The dangers of this happening again and again are high. They must be taken to the international court of justice."
What Have we Bought for $1 Trillion?
Rep. Jan Schakowsky
Congresswoman from Illinois
Posted: May 28, 2010 05:37 PM
As of 10:06 on Sunday, May 30th, we will have spent $1 trillion in Iraq and Afghanistan.
A trillion dollars is a baffling amount of money. If you write it out, use twelve zeros. Even after serving in Congress for over a decade, I, like most Americans, still have a hard time wrapping my head around sums like this.
This month, we mark the seventh anniversary of President Bush's declaration of "mission accomplished" in Iraq, yet five American soldiers have been killed there in May alone. Iraqis went to the polls nearly three months ago, but the political system remains so fractured that no party has been able to piece together a coalition. There are some indications that sectarian violence is again on the rise.
The only clear winner of the Iraq war is Iran. Their mortal enemy, Saddam Hussein, was taken out and fellow Shiites are in charge. Iran has been emboldened to the point of threatening the stability of the region and the world with its growing nuclear capability.
And then there's Afghanistan, which, after nearly a decade of war, represents the longest continuous U.S. military engagement ever. Even the non-partisan Congressional Research Service recently declared the situation in Afghanistan as a "deteriorating security situation and no comprehensive political outcome yet in sight." And the U.S. military just suffered its 1,000th casualty in Afghanistan on Friday.
So the real question is: What have we bought for $1 trillion? Are we safer? As our troops and treasure are still locked down in Iraq and Afghanistan, terrorists are training, recruiting and organizing in Somalia, Yemen and dozens of other places around the globe. While it appears that we have made significant progress in weakening Al Qaeda's network, we have increasing concerns about homegrown terrorists.
Isn't it time to invest in a different strategy? I have been doing a lot of thinking about the nexus between the low status of women and the presence of instability, violence and terrorism. It is simply a fact that the countries in which women are least empowered are the most violent. Could it be that policy-makers and defense experts have overlooked a tool that is staring us right in the face? It's in the eyes of women -- sometimes masked by a burqa, sometimes scarred with acid, sometimes tear stained from the grief of losing a husband or child to war. It's these women who are often fiercely determined to stop the killing and provide a secure environment for their families. Does it even make sense for half of the human race to play only a minor role in countries now plagued by war and violence?
The data indisputably prove the case that when investments are made in women, communities are more stable, healthier, and less violent. The principle tools, which just happen to be far less expensive than the weapons and manpower of war, are the education of girls and economic empowerment of women.
We already have some positive experience that we can build upon. Where the U.S. military and our NATO allies have made a conscious effort to reach out to local women in a culturally sensitive way, they have seen the benefits of utilizing the unique abilities of these women. A Canadian-led Provincial Reconstruction Team in Kandahar met regularly with local women leaders who notified NATO of local corruption and security threats and also conveyed their priorities for improving life in their communities. The U.S. marines have found that using Female Engagement Teams to establish dialogue and collaboration with Afghan women has helped to build rapport between Americans and Afghans, as well as providing critical intelligence that might otherwise have been missed.
On Sunday we hit the $1 trillion mark, but on Memorial Day we will honor all those men and women who gave their lives to fight for this country. This includes the over 5,000 men and women who have died in Iraq and Afghanistan since 2001. Even in difficult economic times, this is by far the most devastating cost of all: the lives we have lost in these two conflicts.
This weekend, I hope all Americans will take the opportunity to consider the cost of ongoing war. We simply cannot afford to continue pouring American blood and treasure into conflicts that will never be solved by a total dependence on military force. We should look to the women to provide the cost-effective, powerful force for peace.
http://www.huffingtonpost.com/rep-jan-schakowsky/what-have-we-bought-for-1_b_594031.html
Brothers in Arms
by Mark Knopfler
These mist covered mountains
Are a home now for me
But my home is the lowlands
And always will be
Some day you'll return to
Your valleys and your farms
And you'll no longer burn
To be brothers in arms
Through these fields of destruction
Baptisms of fire
I've witnessed your suffering
As the battles raged higher
And though they hurt me so bad
In the fear and alarm
You did not desert me
My brothers in arms
Report: "Junk shot" fails to plug leak in Gulf
http://www.boingboing.net/2010/05/28/report-junk-shot-fai.html
Videos and stills posted by Pas au-Delà appear to show spectacular events going on in the operation to cut off the flow of oily gunge in the gulf -- possibly a 'junk shot,' where rubber and other materials are forced into the failed blowout preventer in an attempt to plug it.
As you can see, the junk appears not to have remained in place. More from the New York Times. BP's CEO says they'll give the strategy another 48 hours: the next plan is to cut the pipe and cap it with another pipe; and failing that, to place a second blowout preventer atop the failed one.
Millions of Tons of Methane Bubbling Up from Melting Arctic Seabed
by David Sassoon - Sep 24th, 2008
http://solveclimate.com/blog/20080924/millions-tons-methane-bubbling-melting-arctic-seabed
The Independent (UK) reported in an exclusive story today that scientists have discovered "chimneys" of methane -- a greenhouse gas 20 times more potent than carbon dioxide -- rising from the melting Arctic seabed.
Scientists believe sudden release of stores of methane have in the past been responsible for rapid increases in global temperatures, dramatic changes to the climate, and mass extinctions.
Orjan Gustafsson of Stockholm University in Sweden, one of the leaders of the expedition, described the scale of the methane emissions in an email exchange sent from the Russian research ship Jacob Smirnitskyi.
"We had a hectic finishing of the sampling programme yesterday and this past night," said Dr Gustafsson. "An extensive area of intense methane release was found. At earlier sites we had found elevated levels of dissolved methane. Yesterday, for the first time, we documented a field where the release was so intense that the methane did not have time to dissolve into the seawater but was rising as methane bubbles to the sea surface. These 'methane chimneys' were documented on echo sounder and with seismic [instruments]."
Dr. Gustafsson told the paper that at some locations, methane concentrations reached 100 times background levels, covering several tens of thousands of square kilometres, amounting to millions of tons of methane.
The study is being prepared for peer review publication by the American Geophysical Union, and is being overseen by Igor Semiletov of the Russian Academy of Sciences, who since 1994 has led about 10 expeditions to the region.
The amount of methane stored beneath the Arctic is calculated to be greater than the total amount of carbon locked up in global coal reserves so there is intense interest in the stability of these deposits as the region warms at a faster rate than other places on earth.
Scientists fear that its release could unleash a giant reaction that feeds on itself: more atmospheric methane causes higher temperatures, leading to further permafrost melting and the release of yet more methane.
Pop quiz: what's more dangerous, the meltdown of the Arctic, or the meltdown of Wall Street and global credit markets?
Earth to Washington: Read My Bubbles.
Actinia Oil Rig Blowout 1993
the ocean boiling with methane escaping
Safety Suffers During Drilling Boom
http://solveclimate.com/blog/20100524/investigator-warned-mms-2009-about-deepwater-gas-blowouts-gulf-mexico
In 2000, during the heart of the unprecedented deepwater drilling boom, which began in the early 1990s, MMS published a review of gas hydrate research activities, which included this testimony from Dr. Roger Sassen of Texas A&M University — which the investigator's report highlighted — that warns unequivocally about the dangers of a deepwater blowout:
What most concerns me real-time is that the energy industry is moving into deep water of the Gulf of Mexico where gas hydrates form instantaneously in sea-floor experiments...Surprisingly little is known about the geology (water depth distribution, geologic controls, maximum preservation depth in sediments) and geochemistry (compositions and stability realms) of natural gas hydrates in the context of energy industry activities...We simply cannot afford a major accident in the deep waters of the Gulf, and thus have a clear common objective with the MMS.
In giving presentations on natural gas hydrates to the energy industry, I found that knowledge of potential gas hydrate hazards is limited. There is the tendency within the energy industry to decrease time between discovery and production, and to use new and innovative technology, in an effort to decrease costs. At the same time, internal energy company research has been scaled back. These circumstances could potentially increase risk in a relatively unknown environment. Gas hydrate related problems have occurred in deepwater environments elsewhere, but they have
not always been widely publicized.
Investigator Warned MMS in 2009 About Deepwater Gas Blowouts in Gulf of Mexico
http://solveclimate.com/blog/20100524/investigator-warned-mms-2009-about-deepwater-gas-blowouts-gulf-mexico
excerpted
A sixty-page memorandum addressed to Renee Orr, the chief of the leasing division of the Minerals Management Service (MMS), was sent in September 2009 by an environmental investigator, warning of potential disaster in offshore drilling operations and the particular dangers posed by gas hydrates.
It was written as a public comment to the federal government's proposed rule for oil and gas leasing between 2010 and 2015 on the outer continental shelf, and offers a wide-ranging compilation and analysis, based on meticulously documented scientific, industry and government sources, of many accidents little known to the general public.
It warns of the potential for catastrophic environmental disaster in an offshore accident, highlighting many of the potential dangers that the Deepwater Horizon explosion has now put on display. It also raises concern about the ongoing and unrecognized release of vast quantities of methane into the atmosphere, a gas 20 times more powerful as a warming agent than CO2.
......
Independent Investigator
The 60-page report which opens the window on these revelations was authored by Dan Zimmerman, an independent environmental investigator of the Northcoast Ocean and River Protection Association (NORPA). He has worked with numerous groups since 1975, especially on pesticide, forestry and salmon habitat issues. The executive director of Californians for Alternatives to Toxics, Patty Clary, told SolveClimate she has worked with Zimmerman for 14 years and called him "a brilliant researcher."
Zimmerman said that he sent his report last September to hundreds of environmental organizations and individuals, but got no response.
"It's become a popular topic now," he said, with attorneys and environmental groups now examining his report.
Yet Zimmerman was more interested in discussing the Gulf oil spill than his report, expressing concern about the condition of the blowout preventer on the sea floor and the pipe in the bore hole. If the pipe in the bore hole has been perforated, he said, a "top kill" being planned by BP may not stop the leak.
"My concern is that cratering has now occurred and a flow path has been established outside the well bore. If this has occurred we are in serious trouble, more than we currently think."
"If there are plumes of gas and oil rising from the sea floor around the pipeline," Zimmerman said, "that would be an indication. They have submersibles. They should be examining the area around the blowout."
His concerns seem well-founded. One of the most complete and factual chronologies of the events leading up to the BP Gulf of Mexico blowout recounts this situation five minutes before gas shot out of the drill column on the surface of the ocean.
Standpipe pressure increased and decreased twice between 21:30 and 21:42 (standpipe pressure generally reflects bottom hole pressure). This, along with a steady increase in mud pit volume, suggests that surges of gas were entering the drilling fluid from a gas column below the wellhead, and outside of the 7-inch production casing. Gas had probably channeled past the inadequate cement job near the bottom of the well and, by now, had reached the seals and pack-offs separating it from the riser at the sea floor.
Failure of a "top kill" — if it doesn't make matters worse — would leave well control experts with only one final known option for stopping the leak in the Gulf: drilling a relief well. The idea is to reach the oil reservoir with a well drilled on a tangent to the original, and seal it closed. But an industry publication published in 2009 indicates that drilling a relief well to 18,000 feet below the sea bed is beyond the edge of the technical capability of well control experts.
The detection tools used to locate the blowout wells have been successfully used for many years. However, there have been very few relief wells drilled deeper than 16,000 ft. A very deep intercept greater than 20,000 ft will be a challenge to any relief well team. If the deep intercept cannot be made, a shallower depth will need to be chosen. This complicates the kill operation as it will not be made close to the reservoir.
Yet even without a fail-safe option for well control in case of an accident, industry has proceeded to ever greater depths in search of oil. Deepwater boosters proudly speak of the deepest well ever drilled, which reaches more than 30,000 feet down into Earth's crust. It sits off the coast of Texas in US waters in the Gulf of Mexico.
Allen may have spoke too soon
"Top kill" slowing oil, but leak not stopped yet
COVINGTON, La. (AP) - The Coast Guard says BP is having some
success slowing the Gulf of Mexico oil leak by injecting mud but
the fix isn't done yet.
Coast Guard Lt. Commander Tony Russell said Thursday reports
that Admiral Thad Allen, who is overseeing the operation, had
called the procedure a success were incorrect. He said Allen said
that the flow of mud was stopping some of the oil and gas but had a
ways to go before it proved successful.
BP spokesman Tom Mueller said the effort that started Wednesday
to plug the blown-out with mud, called a top kill, was continuing.
Mueller said BP PLC doesn't anticipate being able to say
anything definitive on its success until later Thursday.
(Copyright 2010 by The Associated Press. All Rights Reserved.)
Billy Nungesser says he'll go to jail if it means better protection
The Plaquemines Parish council today may vote to defy federal regulators and fund the money for construction of an unapproved sand berm to protect the coast from the Gulf oil slick. Parish President Billy Nungesser says he's ready to go to jail, if he has to.
When the council meets in Belle Chasse today, Nungesser will ask them to approve $1 million so the parish can hire a dredge to start building a six-foot high, miles long sand berm. He says he's tired of federal officials delaying the permits.
"Let'em put us in jail. I'm not going to sit around and watch while our marsh is destroyed," Nungesser told WWL's Garland Robinette.
Plaquemines Parish President Billy Nungesser:
Nungesser said he'd rather go ahead and spend up front, and fight it out for reimbursement later. He also said some of the critics of his plan don't know what they're talking about.
"Somebody said, 'well, you're just trying to get BP to pay for your barrier islands.' If that were the case, I'd have asked them to pump it 18 feet high and a thousand feet wide, because that's what we want to do," Nungesser said. "This ain't a home run. We could see a storm top it. But this will give us a fair shot."
Allen: Oil leak stopped... at least for now
Dave Cohen Reporting
There is currently no oil leaking into the Gulf of Mexico from the well that had been spewing crude into the sea for more than a month.
"They've stopped the hydrocarbons from coming up," National Incident Commander Thad Allen told WWL First News. "They've been able to stabilize the well head, they are pumping mud down it."
Listen to Allen:
http://www.wwl.com/Allen---Oil-leak-stopped----at-least-for-now/7337556
Allen says now they have to make sure the heavy drilling fluids, or mud, will hold back the oil and natural gas in the well long enough for them to be able to cap the well.
"The goal is to put enough mud down the well bore to the point where there is no pressure exerted back by the hydrocarbons and then allow a cement plug to be put in place."
The Coast Guard admiral says when they feel things are stable enough, engineers will try to inject the cement into the equipment on top of the well and seal it off.
Oil-tax increase to fund cleanups
By Stephen Ohlemacher
Associated Press
WASHINGTON - Responding to the massive BP oil spill, Congress is getting ready to quadruple - to 32 cents a barrel - a tax on oil used to help finance cleanups. The increase would raise nearly $11 billion over the next decade.
The revenue goes to a fund managed by the Coast Guard to help pay for cleanups.
The tax increase is part of a larger bill that has grown into a nearly $200 billion grab bag of unfinished business that lawmakers hope to complete before Memorial Day. The key provisions are a one-year extension of about 50 popular tax breaks that expired at the end of last year, and expanded unemployment benefits, including subsidies for health insurance, through the end of the year.
The House could vote on the bill as early as Tuesday. Senate leaders hope to complete work on it before Congress goes on a weeklong break next week.
President Obama and congressional leaders have said they expect BP to foot the bill for the cleanup.
"Taxpayers will not pick up the tab," Senate Majority Leader Harry Reid (D., Nev.) said Monday.
BP executives told Congress last week they would pay "all legitimate claims" for damages. But the government needs up-front money to respond to spills, as well as money to pay for cleanups when the responsible party is unable to pay, or is unknown. Money spent from the fund can later be recovered from the company responsible for the spill.
The Oil Spill Liability Trust Fund has about $1.5 billion available. Under current law, $1 billion can be spent from the fund on a single incident. The bill would increase the spending limit to $5 billion.
The U.S. Chamber of Commerce said the tax increase was hastily put together, without adequate study, to help pay for an unrelated bill. The tax increase was unveiled Thursday, without any congressional hearings to study its impact.
Even with the tax increases, the bill is projected to add $134 billion to the federal budget deficit.
The financial crisis of 2008 made it inevitable that unemployment would rise sharply through 2009.
It also caused the budget deficit to skyrocket:
http://www.tnr.com/blog/jonathan-chait/75128/the-stigmatization-bush-blaming
Most voters, of course, don't follow these issues closely enough to gain a detailed understanding of cause and effect. They just tend to notice that unemployment and the budget deficit have risen while President Obama has held office.
Republicans have worked assiduously to blame these conditions on Obama's policies even though they were obviously caused by conditions he inherited. At the same time, they have worked relentlessly to create a social stigma around his efforts to push back. The result of this campaign can be seen in things like Politico's weekend article chastising Obama for blaming his predecessor:
President Barack Obama is trying to ride the wave of anti-incumbency by taking on an unpopular politician steeped in the partisan ways of Washington.
It doesn’t matter that George W. Bush left office 16 months ago.
The White House’s mid-term election strategy is becoming clear – pit the Democrats of 2010 against the Republicans circa 2006, 2008 and 2009, including Bush.
It’s a lot to ask an angry, finicky electorate to sort out. And even if Obama can rightfully make the case that the economy took a turn for the worse under Bush's watch, he's already made it - in 2008 and repeatedly in 2009.
It’s not clear that voters still want to hear it.
The story quotes ten sources commenting on Obama's occassional habit of faulting the Bush administration. Of the ten, eight criticize Obama.
Now, I think it's fine for a story to eschew "balance"when one side is making an unsupportable or hypocritical case. But Obama's case isn't wrong -- it really is true that the economic and budgetary problems we're facing were inherited from the previous administration. What's false is the Republican effort to imply that Obama caused the problems -- an argument that collapses upon the slightest empirical pressure. But somehow the standard here is not what's correct but what's polite, and it's impolite for Obama to blame Bush.
BP Slick Burn at The Source.mov
BP told feds it could handle oil spill 60 times larger than Deepwater Horizon
http://blog.al.com/live/2010/05/bp_told_feds_it_could_handle_o.html
In its 2009 exploration plan for the Deepwater Horizon well, BP PLC states that the company could handle a spill involving as much as 12.6 million gallons of oil per day, a number 60 times higher than its current estimate of the ongoing Gulf disaster.
In associated documents filed with the U.S. Minerals Management Service, the company says that it would be able to skim 17.6 million gallons of oil a day from the Gulf in the event of a spill.
As of Tuesday, BP reported recovering 6 million gallons of oily water since the ongoing spill began four weeks ago. BP spokesman Tom Mueller said that only about 10 percent of the skimmed liquid was oil, which would amount to about 600,000 gallons of oil collected thus far.
Mueller also said via e-mail Tuesday that "the spill has stayed about the same size or even shrunk on the water as a result of our response efforts."
Skytruth.org, a website that monitors environmental problems using satellite imagery, reported Monday that the spill had grown to 10,170 square miles, based on NASA images. John Amos, head of Skytruth, told the Press-Register then that the spill had approximately doubled in size since Friday.
BP did not respond to questions about the NASA images.
BP's Deepwater Horizon Initial Exploration Plan suggests that the well's unchecked flow would be 6.8 million gallons a day.
An emergency would activate the company's Oil Spill Response Plan, a 582-page document submitted to federal regulators in 2008 and designed to cover all BP operations in the Gulf of Mexico.
According to the document, the response plan is triggered "in the event the spill cannot be controlled." It also calls for the company to "assemble a team of technical experts to respond to the situation."
The document provides no detailed discussions of how a runaway well would be stopped, nor does it reflect any plan for devices such as an insertion tube, which is now recovering an estimated 84,000 gallons of oil daily, or the failed containment dome.
The plan includes detailed descriptions of the merits and limitations of three primary mitigation methods used at the surface: dispersants, skimming, and burning.
The response plan is exhaustive when it comes to staging a mitigation effort. It provides lists of suppliers, contractors, and phone numbers for federal and state officials who should be notified in the event of a worst-case spill.
Extensive flowcharts describe who should be called, and when. Organizational charts provide titles and positions for dozens of people to be involved in managing the crisis.
The plan dictates staging areas for responders and their equipment. It gives phone numbers for local media, results of marine toxicology tests on various dispersants, and maps showing how long it will take to get supplies to various locations.
There is a list of equipment required to set up a Joint Information Center, including a podium, four to six telephones, an answering machine, photocopier, computer and printer, a wall clock, and various other office supplies.
In the document, BP states that the company "has the capability to respond, to the maximum extent practicable, to a worst-case discharge," which it defines as 300,000 barrels, or about 12.6 million gallons, of oil per day.
It goes on to detail dozens of skimming vessels available around the Gulf that could collectively recover 17.6 million gallons a day.
It says dispersants will be able to sink 6,080 to 7,600 barrels per day into the Gulf.
A safety data sheet about the principal dispersant that the company has reported using during the ongoing spill says "no toxicity studies have been conducted on this product," and labels "the potential human hazard: High."
The equipment section of the response plan's worst-case scenario chapter does not offer any source for fire boom. Burning, which requires such boom, is considered a primary response option for large spills in the Gulf, and its use was pre-approved by the government in 1994. The Press-Register has reported that in the days after the spill, federal officials had to purchase a boom from a company in Illinois to conduct the first test burn.
The BP plan contains two websites detailing locations where response supplies are stored on the Gulf Coast. One of the addresses directs the user to what appears to be a Japanese social networking site. Using the same address with the ".org" suffix rather than the listed ".com" leads to a spill response company.
© 2010 al.com. All rights reserved.
Most Indians and Pakistanis can’t agree where Kashmir is on a map. But ask them who started the conflict, and they will have an answer.
Two filmmakers, one Hindu and the other Muslim, sneak their cameras into one of the most beautiful, yet dangerous, places on Earth. In a region where religious alliances have spawned more than half a century of war, can these two filmmakers learn what makes Kashmiris choose their homeland over their own lives, even as their friendship is put to the test?
http://www.pbs.org/independentlens/project-kashmir/film.html
For more than half a century, India and Pakistan have fought over Kashmir, a lush mountain region nestled in the Himalayas. Dodging artillery fire and escaping rape or torture remains the daily reality of those living in Kashmir, but much of the rest of the world remains uninformed about this bloody conflict that could potentially escalate into a full-scale nuclear war.
In 1947, the British partitioned its colonial property into the separate nations of Pakistan and India. At the time, Kashmir was the only state with a majority Muslim population, but Hindu leadership chose for the region to belong to India — a decision declared invalid by Pakistan. The United Nations called for the Kashmiri people to decide their own future, but years of violence and a relentless diplomatic tug of war have made this impossible. Divisions have gone deep, and wrought deadly results: Since the conflict began, it has claimed more than 40,000 lives by India’s estimate; 80,000 by Pakistan’s.
Though more alike than they are different, Kashmiri Muslims and Kashmiri Hindus remain divided by religious allegiances in the global diaspora. Little information exists to support dialogue between the two groups, and many members of the community have given up hope for peace. The hatred has already begun to trickle down into the minds of the next generation. PROJECT KASHMIR was created out of a desire for dialogue between these two divided communities. Filmmakers Senain Kheshgi, a Pakistani American, and Geeta V. Patel, an Indian American, investigate the war in Kashmir and find their friendship tested over deeply rooted political, cultural, and religious biases they never had to face in the U.S.
Guided by an anonymous telephone informer and three brave Kashmiris, the filmmakers navigate the treacherous maze of occupation, insurgency, unrest, censorship, and religious animosity, slowly finding themselves pulled apart by their own identification with opposing factions. Beautifully shot by Academy Award-winner Ross Kauffman, the film captures the stunning beauty of Kashmir, while expertly interweaving deeply moving personal stories of Kashmiris with those of the two American women who strive to reconcile their ethnic and religious heritage with the violence that haunts their homeland.
PROJECT KASHMIR explores war between countries and war within oneself, while juxtaposing moving personal stories of Kashmiris who have never known a world without war. For some questions, the film reveals, there is never just one truth.
The Wounded Platoon
http://www.pbs.org/wgbh/pages/frontline/woundedplatoon/etc/synopsis.html
In The Wounded Platoon, FRONTLINE investigates a single Fort Carson platoon of infantrymen -- the 3rd Platoon, Charlie Company, 1st Battalion, 506th Infantry -- and finds, after a long journey, a group of young men changed by war and battling a range of psychiatric disorders that many blame for their violent and self-destructive behavior. Since returning from Iraq, three members of the 3rd Platoon have been convicted on murder or attempted murder charges; one has been jailed for drunk driving and another for assaulting his wife; and one has attempted suicide.
The FRONTLINE investigation also uncovers extraordinary footage from police interrogation tapes alleging that members of the platoon murdered unarmed Iraqis. "There's a whole bunch of people in the unit that killed people they weren't supposed to," according to Bruce Bastien, who, along with Louis Bressler and Kenny Eastridge, is now serving time for the murder of Kevin Shields. In a stunning confession recorded by police interviewers and shown for the first time on television, Bastien admits to his role in the murder of two U.S. soldiers and the stabbing of a young woman during a robbery in Colorado Springs -- and he makes claims about more murders committed in Iraq during the surge. "It's easy to get away with that kind of s*** over there. You can just do it and be like, 'Oh, he had a gun,' and nobody really looks into it. 'F*** it, it's just another dead Haji.'"
While the Army has concluded that there is no evidence to back up Bastien's allegations of soldiers killing innocent Iraqis, FRONTLINE also speaks with platoon member Jose Barco, who makes a similar claim. "We were pretty trigger-happy," he says of the soldiers' time in Iraq. "We'd open up on anything. We usually rolled three or four trucks, and if one of them got hit and there was any males around, we'd open up, and we'd shoot at them. ... They even didn't have to be armed."
Barco is now serving a 52-year prison sentence for attempted murder following an incident at a party in Colorado Springs. Once hailed as a hero for saving two soldiers during a suicide-bomb attack that left him with a traumatic brain injury, or TBI, he was also diagnosed with post-traumatic stress disorder and says he was prescribed nine different medications. FRONTLINE interviews retired military psychiatrist Stephen Xenakis, who says that there may be a link between Barco's crimes and his injuries. "We have someone who's been emotionally traumatized, and they've got PTSD. They're anxious, and they're depressed, and they've got TBI, which means that they've got problems in decision making. They can't think as clearly. They are really vulnerable to just overreacting."
In The Wounded Platoon, FRONTLINE reveals a military mental health system overwhelmed with soldiers suffering psychological injuries from the surge -- at Fort Carson the rate of PTSD diagnosis has risen 4,000 percent since 2002 -- and the widespread use of prescription psychiatric drugs both at home and in combat. "Everybody was on Ambien, everybody. It was hard to find somebody that wasn't taking Ambien," says the 3rd Platoon's medic, Ryan "Doc" Krebbs. "It helps you sleep, and it also f***s you up. It gets you pretty high." After returning home, Krebbs was also prescribed the antipsychotic medication Seroquel, on which he would purposefully overdose in a suicide attempt. "I thought that my time in this place was over, and I'd already done what I was supposed to do, and I didn't want to live anymore."
Before the Iraq war, American soldiers in combat zones did not take psychiatric medications, but by the time of the surge more than 20,000 U.S. troops in Afghanistan and Iraq were taking antidepressants and sleeping pills. These drugs enable the Army to keep soldiers with post-traumatic stress disorder on the battlefield. "What I use medications for is to treat very specific side effects," Army psychiatrist Col. George Brandt tells FRONTLINE. "I don't want somebody in a helplessness mode in a combat environment. I want to make sure I don't have someone with suicidal thoughts where everyone is armed."
Kenny Eastridge, who is now serving time for the murder of Kevin Shields and other crimes, tells FRONTLINE that he sought help for mental health problems from a combat stress center on Forward Operating Base Falcon. "I was having a total mental breakdown. Every day we were getting in battles and never having a break. It seemed like, it was just crazy," he says. "They put me on all kinds of meds, and I was still going out on missions. They had me on Ambien, Remeron, Lexapro, Celexa, all kind of different stuff."
Despite the warnings that patients on these medications should be closely monitored for side effects, Eastridge was sent to a remote combat outpost for weeks at a time with no medical supervision or mental health provision. He says he ran out of medication and was also smoking marijuana and taking Valium. In dramatic footage filmed by other members of the 3rd Platoon, FRONTLINE shows Eastridge behaving erratically, wandering into Iraqi homes, lying in their beds, and trying to hug local women and men.
Fort Carson's hospital remains understaffed with almost a quarter of its psychiatry positions unfilled. The 3rd's battalion, which has been reflagged as the 2-12 Infantry, is about to return home from a year of intense combat in Afghanistan. "We're all wondering what's going to happen," says Colorado Springs psychotherapist Robert Alvarez. "It's a scary thought, you know, what's going to happen in this community. Are we going to have more murders? Are we going to have more suicides, or are we going to have more crime? I think the answer to that is probably yes."
Coast Guard: Tar balls found off Key West
Tuesday, 18 May 2010 7:20AM
Associated Press Reporting
The U.S. Coast Guard says 20 tar balls have been found off Key West, Florida, but the agency stopped short of saying whether they came from a massive oil spill in the Gulf of Mexico.
Some 5 million gallons of crude has spewed into the Gulf and tar balls have been washing ashore in several states along the coast.
Scientists are worried that oil is getting caught in a major ocean current that could carry it through the Florida Keys and up the East Coast.
The Coast Guard says the Florida Park Service found the tar balls on Monday during a shoreline survey. The balls were 3-to-8 inches in diameter.
Coast Guard Lt. Anna K. Dixon said no one at the station in Key West was qualified to determine where the tar balls originated. They have been sent to a lab for analysis.
Jindal calls on corps to approve protection plan
WWL.com / Associated Press Reporting
Gov. Bobby Jindal and leaders from several coastal parishes are pushing a $350 million barrier island repair plan as a way to protect Louisiana's coast from the Gulf of Mexico oil spill and reduce the ultimate cleanup and its costs.
Sand dredged from the gulf's floor would be built up in 86 miles of the gaps between islands, returning land eaten away by decades of storms and slower erosion.
"We presented this plan almost two weeks ago because we expected to need greater defenses than boom on the top of the water. We are very concerned about reports of oil submerged under the water. This 'sand booming' plan we are asking the Corps to approve will strengthen our barrier islands and help protect our coast and critical wildlife areas," the governor said.
Jindal said Monday that the project could start within days after the Army Corps of Engineers approves it. He is asking for quick approval, and says he has been told that a decision could come in days.
Jindal says the price tag is much less than it would cost to try to remove oil from marshlands.
Here is the news release from the governor's office:
Today, Governor Bobby Jindal and coastal parish leaders met with the U.S. Army Corps of Engineers to stress the importance of approving the dredging plan to restore Louisiana 's historic barrier islands and mitigate the impact of the oil spill on the coast. For the meeting and the press conference, Governor Jindal was joined by Plaquemines Parish President Billy Nungesser, St. Bernard Parish President Craig Taffaro, Terrebonne Parish President Michel Claudet, Grand Isle Mayor David Carmardelle, Jean Lafitte Mayor Tim Kerner, Jefferson Parish Councilmen Chris Roberts and Tom Capella and other local officials.
Before the press conference, Governor Jindal joined BP COO Doug Suttles for a flyover of the oil spill and the leak site. At the press conference, the Governor noted that BP's announcement about the tube insertion yesterday is a positive development, but said there's still much work to be done until this crisis is over for the state.
Governor Jindal said, "I want to start off touching on BP's announcement yesterday that they were able to insert a tube into the leak. This is a positive development, but I want to stress that we are nowhere close to the finish line. Oil continues to pour into the Gulf and has hit our shores. I want to be clear on this point: This disaster will not be over for Louisiana until our water and our shores are completely clean and our wildlife, our communities, and our coastal industries are one hundred percent restored.
"NOAA briefed us that Louisiana now has 29 miles of oiled shoreline - since the beginning of this incident. We had shoreline impact of oil specifically at Trinity Island , Whiskey Island , South Pass, Chandeleur Islands , Fourchon Beach , Raccoon Island and Grand Isle. Oil sheen was reported in Pass a Loutre. There are also new, unconfirmed reports of oil on Marsh Island - which is in Iberia Parish."
The Governor also said he remains concerned about reports regarding the possibility of a large volume of oil below the surface of the water and that he will continue to push aggressively for alternatives to boom that will protect the state's coast.
Governor Jindal said, "We continue to be very concerned that there may be a large volume of oil below the surface. That is why it is so important that we continue to lean forward and pursue aggressive solutions to protect our coasts.
"Booming is one option - but we know we cannot only count on boom to protect our coast, especially as the supply of boom continues to fall short of what is needed to protect many areas. We continue to push the Coast Guard and BP to get more boom to sensitive areas, but we are also aggressively pursuing alternatives to boom that would help protect the coast."
DREDGING PLAN
The Governor said the state continues to move forward on a dredge plan to build "sand booms" along the alignment of Louisiana's historic barrier islands in the Chandeleurs, Barataria Bay and Timbalier Bay .
Governor Jindal said, "CPRA filed for an emergency permit last week from the Army Corps of Engineers to move forward with this plan and we just met with the Col. Lee of the Army Corps of Engineers along with parish leaders to stress the importance of approving this plan quickly and granting our emergency permit to get the work started. NOAA's report that tar balls washed up on Marsh Island - which is over 200 miles from the Horizon well explosion site - further underscores the need for us to implement the dredge plan - or 'sand booming' strategy.
"We presented this plan almost two weeks ago because we expected to need greater defenses than boom on the top of the water. We are very concerned about reports of oil submerged under the water. This 'sand booming' plan we are asking the Corps to approve will strengthen our barrier islands and help protect our coast and critical wildlife areas.
"Once we get approval for dredging to begin, we could start to see land or 'sand booms' in place in around 10 days. We need to get this plan moving as quickly as possible."
Some other alternatives to boom include: Tiger Dams in Plaquemines Parish, filling in sand in Elmer's Island and sandbag drops in Fourchon. Below is an update on the projects:
Elmer's Island at Grand Isle: National Guard engineers continue to backfill gaps in the vicinity of Elmer's Island where they closed a 785-foot gap last week.
Port Fourchon Sandbag Drop Operations: About 30 engineers from the 928th Engineer Company are filling five total gaps in the vicinity of Thunder Bayou in Port Fourchon. Teams are currently working simultaneously in the vicinity of Thunder Bayou and also on the western side of Elmer's Island . Engineers are working from each end to the center to backfill five cuts on the island. Gap 1 on the east end is 30 percent complete and Gap 5 on the west end is about 15 percent complete. The National Guard already closed a large 150-foot gap there last week.
Tiger Dam Project at Southwest Pass : Around 42 engineers from the 528th Engineer Battalion are working to secure 7.1 miles in Southwest Pass with tiger dams. Engineer crews have obtained 18 additional pumps to accelerate construction efforts when operations resume. Yesterday, National Guardsmen also positioned 92 pallets of Tiger Dam to Grand Isle for future deployment - which is around 7 miles of dam material.
Sand-Fill: CPRA and the National Guard have also leaned forward and identified approximately 40 total locations where gaps in Louisiana 's barrier islands could be filled with sandbags or dump trucks of sand. This strategy would complement a more complete and extensive dredging/sand booming plan.
The National Guard has already dropped 85 sandbags to date on Pelican Island . National Guard engineers are moving ground operations to support this effort from Grand Isle to Buras Middle School today to prepare for full-scale operations tomorrow.
Hesco Baskets: The state also recently got approval to deploy Hesco baskets on the backside of Grand Isle and in Cameron Parish to protect the shorelines there.
Freshwater Diversions: The state is also already running a variety of freshwater diversions to push freshwater out to protect the shore.
CLEAN -UP
Ground teams are being deployed today to clean: Whiskey Island , Trinity Island Fourchon Beach - and also South Pass and the Chandeleur Islands , if weather permits.
‘There’s No Money Left,’ U.K. Minister Learns
May 17 (Bloomberg) -- Arriving for work at the U.K. Treasury last week, the incoming chief secretary, David Laws, found a note from his predecessor, Liam Byrne, offering advice on the job.
“Dear Chief Secretary, I’m afraid to tell you there’s no money left,” Laws cited it as saying.
“Which was honest,” Laws, whose position is the No. 2 in the Treasury after the chancellor of the exchequer, told a press conference in London today. “But slightly less than I was expecting.”
The note underscores the task facing Britain’s Conservative-Liberal Democrat coalition as it seeks to reconcile demand for improved health and education services with promises to reduce the largest budget deficit since World War II.
It was also in the tradition of Reginald Maudling, Conservative chancellor of the exchequer from 1962 to 1964. Leaving his residence after election defeat, he was reported byJames Callaghan, his successor, to have remarked, “Sorry, old cock, to leave it in this shape.”
Byrne didn’t respond to requests for comment. He was quoted by Sky News as saying the note was a joke. “I do hope David Laws’ sense of humour wasn’t another casualty of the coalition deal,” he said, according to Sky News.
According to the Treasury, the letter read as follows: “Dear Chief Secretary, I’m afraid there’s no money. Kind regards -- and good luck! Liam.”
China Stocks Plunge Most Since August on Property Curbs, Europe
May 17 (Bloomberg) -- China’s stocks plunged, driving the benchmark index to the biggest loss since August, on concern government steps to cool the property market and European austerity measures will hurt economic growth.
China Vanke Co. paced declines by developers after Premier Wen Jiabao said the government will “decisively” contain gains in home prices. Jiangxi Copper Co. lost 6.3 percent after commodity prices tumbled and the Ministry of Commerce said the euro’s decline is pressuring exporters. Guangzhou Shipyard International Co., which got more than half of last year’s sales from Europe, slumped 8.4 percent.
“Investors are increasingly fearful of policy miscalculation on China’s part,” said Daphne Roth, Singapore- based head of Asian equity research at ABN Amro Private Banking, which oversees about $21 billion in the region. “With the European crisis, the risk is that China over-tightens and the economy goes into a hard landing.”
The Shanghai Composite Index dropped 136.69, or 5.1 percent, to close at 2,559.93, the lowest since May 4, 2009. Today’s decline is the biggest since Aug. 31, when the gauge fell 6.7 percent on concern a slowdown in lending growth would slow economic growth. The CSI 300 Index retreated 153.31, or 5.4 percent, to 2,714.72.
The Shanghai index has lost 22 percent this year, the world’s fourth-worst performer among the 93 gauges tracked by Bloomberg, on concern the government will keep tightening monetary policy to contain inflation and avert asset bubbles. The measure on May 11 entered a bear market after falling 21 percent from its Nov. 23 high.
Economic Growth
Equity losses have dragged valuations on the Shanghai index to 19.1 times reported earnings, compared with the multiple of 37 times in July 2009, according to weekly data compiled by Bloomberg.
China International Capital Corp. on May 10 cut its estimate for China’s economic growth this year to 9.5 percent from 10.5 percent, citing property tightening measures and overseas “uncertainties.” The economy expanded 11.9 percent in the first quarter from a year earlier.
Vanke, the country’s largest listed developer, slid 5.3 percent to 6.92 yuan. Poly Real Estate Group Co. lost 7.3 percent to 10.10 yuan, capping a 41 percent loss this year. An index tracking 34 property stocks on the Shanghai Composite plunged 6.2 percent, set for its lowest close since March 2009.
Premier Wen said the government will “decisively” contain excessive increases in housing prices in some cities and curb growth of industries with overcapacity, the official Xinhua News Agency reported May 15. China should keep the strength of macroeconomic controls “reasonable” and boost policy coordination, Xinhua said, citing Wen.
Record Gains
Property prices jumped a record 12.8 percent in April from a year earlier and consumer prices rose 2.8 percent, the fastest pace in 18 months, even after the government raised bank reserve requirements three times this year and increased downpayments on homes to curb asset bubbles.
The National Development and Reform Commission is currently drafting “more stringent” rules for the property market, the 163.com website reported, citing unidentified people.
Prices of reinforcing steel bars used in construction fell 4.7 percent last week, the most in at least eight months, according to data compiled by Beijing Antaike Information Development Co.
China’s property market is “healthy” and not in a bubble because sales are driven by cash rather than debt, Andy Rothman, China Macro strategist for CLSA Asia-Pacific Markets, said at a forum in Shanghai today.
Europe Concerns
Jiangxi Copper slumped 6.3 percent to 28.73 yuan, the most since Nov. 27. PetroChina Co., the nation’s largest energy producer, retreated 3.8 percent to 10.73 yuan. Baoshan Iron, the biggest steelmaker, declined 5.8 percent to 6.23 yuan. Angang Steel Co. fell 6.9 percent to 7.92 yuan.
Crude oil fell for a fifth day, losing as much as 2.5 percent to $69.82 a barrel, copper, aluminum and zinc plunged as much as 4.9 percent, while gold increased 0.8 percent to $1,242.45 an ounce.
“Investors are worried that more property tightening is on the way even as Europe throws up more uncertainties about the global economy,” said Michelle Qi, a Shanghai-based portfolio manager at Bank of Communications Schroders Fund Management Co., which oversees about $6.5 billion.
European finance ministers return to Brussels today a week after agreeing to a $1 trillion financial lifeline for the euro region. Ministers are under pressure to show they can reduce deficits fast enough to satisfy investors and then police budgets effectively once targets are met.
Export Market
China is concerned that the debt crisis facing Europe may delay the global economic recovery, Ministry of Commerce spokesman Yao Jian told a regular briefing in Beijing today. Europe is China’s biggest export destination, making up 20 percent of its total overseas sales.
Among companies with sales in Europe, Guangzhou Shipyard fell 8.4 percent to 20.64 yuan, the most since Aug. 31.
The euro fell to the lowest level in more than four years against the dollar after European Central Bank President Jean- Claude Trichet called for a “quantum leap” in the way euro- area nations set their budgets.
China’s growth is “strong” and a leading economic indicator rose “sharply” in March, The Conference Board said today, publishing the data for the first time.
‘Front Loading’
Bill Adams, a Beijing-based economist for The Conference Board, said that the “front-loading” of real-estate projects ahead of government controls on the sector may have contributed to the gain. The economic expansion is “unlikely to accelerate further through the summer months,” he said.
China’s recent stock market declines shouldn’t be blamed on index futures, China Securities Journal cited Wang Lianzhou, former deputy director of National People’s Congress’ financial and economic committee, as saying.
Investor Mark Mobius said May 14 the start of derivatives trading in China may be adding pressure to the stock market. Futures, or agreements to buy or sell the CSI 300 Index at a preset value, began trading on the China Financial Futures Exchange in Shanghai on April 16, while margin trading and short selling was introduced March 31.
Blowout: The Deepwater Horizon Disaster
May 16, 2010
"60 Minutes" Video http://www.cbsnews.com/video/watch/?id=6490378n&tag=related;photovideo
The gusher unleashed in the Gulf of Mexico continues to spew crude oil. There are no reliable estimates of how much oil is pouring into the gulf. But it comes to many millions of gallons since the catastrophic blowout. Eleven men were killed in the explosions that sank one of the most sophisticated drilling rigs in the world, the "Deepwater Horizon."
This week Congress continues its investigation, but Capitol Hill has not heard from the man "60 Minutes" correspondent Scott Pelley met: Mike Williams, one of the last crewmembers to escape the inferno.
He says the destruction of the Deepwater Horizon had been building for weeks in a series of mishaps. The night of the disaster, he was in his workshop when he heard the rig's engines suddenly run wild. That was the moment that explosive gas was shooting across the decks, being sucked into the engines that powered the rig's generators.
"I hear the engines revving. The lights are glowing. I'm hearing the alarms. I mean, they're at a constant state now. It's just, 'Beep, beep, beep, beep, beep.' It doesn't stop. But even that's starting to get drowned out by the sound of the engine increasing in speed. And my lights get so incredibly bright that they physically explode. I'm pushing my way back from the desk when my computer monitor exploded," Williams told Pelley.
The rig was destroyed on the night of April 20. Ironically, the end was coming only months after the rig's greatest achievement.
Mike Williams was the chief electronics technician in charge of the rig's computers and electrical systems. And seven months before, he had helped the crew drill the deepest oil well in history, 35,000 feet.
"It was special. There's no way around it. Everyone was talking about it. The congratulations that were flowing around, it made you feel proud to work there," he remembered.
Williams worked for the owner, Transocean, the largest offshore drilling company. Like its sister rigs, the Deepwater Horizon cost $350 million, rose 378 feet from bottom to top. Both advanced and safe, none of her 126 crew had been seriously injured in seven years.
The safety record was remarkable, because offshore drilling today pushes technology with challenges matched only by the space program.
Deepwater Horizon was in 5,000 feet of water and would drill another 13,000 feet, a total of three miles. The oil and gas down there are under enormous pressure. And the key to keeping that pressure under control is this fluid that drillers call "mud."
"Mud" is a manmade drilling fluid that's pumped down the well and back up the sides in continuous circulation. The sheer weight of this fluid keeps the oil and gas down and the well under control.
The tension in every drilling operation is between doing things safely and doing them fast; time is money and this job was costing BP a million dollars a day. But Williams says there was trouble from the start - getting to the oil was taking too long.
Williams said they were told it would take 21 days; according to him, it actually took six weeks.
With the schedule slipping, Williams says a BP manager ordered a faster pace.
"And he requested to the driller, 'Hey, let's bump it up. Let's bump it up.' And what he was talking about there is he's bumping up the rate of penetration. How fast the drill bit is going down," Williams said.
Williams says going faster caused the bottom of the well to split open, swallowing tools and that drilling fluid called "mud."
"We actually got stuck. And we got stuck so bad we had to send tools down into the drill pipe and sever the pipe," Williams explained.
That well was abandoned and Deepwater Horizon had to drill a new route to the oil. It cost BP more than two weeks and millions of dollars.
"We were informed of this during one of the safety meetings, that somewhere in the neighborhood of $25 million was lost in bottom hole assembly and 'mud.' And you always kind of knew that in the back of your mind when they start throwing these big numbers around that there was gonna be a push coming, you know? A push to pick up production and pick up the pace," Williams said.
Asked if there was pressure on the crew after this happened, Williams told Pelley, "There's always pressure, but yes, the pressure was increased."
But the trouble was just beginning: when drilling resumed, Williams says there was an accident on the rig that has not been reported before. He says, four weeks before the explosion, the rig's most vital piece of safety equipment was damaged.
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THE DIFFERENCE BETWEEN WALL STREET AND SCHOOL TEACHERS....
http://www.washingtonmonthly.com/archives/individual/2010_05/023820.php
It's been a little under the radar this week, but a key policy dispute is unfolding over federal aid to prevent teacher layoffs.
As states and municipalities continue to struggle with budget shortfalls, schools are being forced to let teachers go. Last year's stimulus bill saved over 400,000 teaching jobs, but it's a new year, and it will take another effort to prevent a massive number of teacher layoffs.
Estimates vary, but my accounts, we're talking about 100,000 to 300,000 job losses in public schools nationwide.
Democratic policymakers hope to do just that. Sen. Tom Harkin (D-Iowa) and Rep. George Miller (D-Calif.) are, with the White House's enthusiastic support, pushing the Keep Our Educators Working Act, which calls for $23 billion in emergency support to preserve these education jobs.
Yesterday, House Minorty Leader John Boehner (R-Ohio) announced his position on the legislation. Care to guess what he thinks? Yep, he's pro-layoff.
"The American people recognize that Washington's out-of-control spending is hurting our economy and stifling job creation, and they're asking their elected leaders to make tough choices on fiscal responsibility. Unfortunately, the Administration's call for another $23 billion to pad the education bureaucracy will only make state governments more dependent on the federal government and more vulnerable when the federal funding explosion disappears. [...]
"Giving states another $23 billion in federal education money simply throws more money into taxpayer-funded bailouts when we should be discussing why we aren't seeing the results we need from the billions in federal dollars that are already being spent."
Whether Boehner actually believes his own press releases is a matter worthy of debate, but either way, his arguments seem oddly detached from reality. Spending is "hurting our economy and stifling job creation"? In Grown-Up Land, spending rescued the economy and generated the strongest job creation in years.
Just as importantly, what does Boehner think the economic impact will be if 300,000 school teachers are forced from their jobs nationwide?
Of course, notice Boehner's emphasis on this being a "bailout" -- a line Fox News is running with. As Republicans see it, emergency aid to prevent teacher layoffs must necessarily be connected in the public's mind with rescuing Wall Street with TARP.
Please.
Doug Thornell, a spokesperson for DCCC Chairman Chris Van Hollen (D-Md.), said in a statement, "Yesterday, job-killing House Republicans blocked a bipartisan plan that would help get more Americans back to work. Today, it appears John Boehner and House Republicans want to stand in the way of important funds that would help save teachers' jobs. It is unbelievable that John Boehner, who begged his Conference to support Bush's bailout of Wall Street banks, has the nerve to use teachers and children as pawns in his cynical game to regain the trust of the right wing of his party."
Well, perhaps "unbelievable" is the wrong word -- it's actually sadly predictable -- but the rest of Thornell's sentiment sounds about right.
—Steve Benen 11:25 AM
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