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The Chinese are far more intelligent than western cultures give them credit for. They have the USA over a barrel and they know it. Thay have enlargened their gold reserves 10 fold and that's only what we are being told. I don't doubt that number is lowballed. Now add in Japan with a whole new regime taking over. One that is not so friendly towards American debt. The US dollar is in the toaster just waiting to pop up as toast. Funny how so many are aware yet the people that are supposed to be aware and have the power and authority to do something about it are ignorant. Either ignorant or getting all they can while they can. Who will be the beneficiaries? Those smart enough to hold their gold and silver. Historically those holding the precious metals have ALWAYS come out ahead as the curriencies of the realms have faltered and gone bust.
.......al
The fraudsters on wall street must be shaking in their boots now:
http://www.reuters.com/article/rbssBanks/idUSSP47327420090831
* State-owned firms may default on commodity hedges - report
* Bankers dismayed, confused by report; seek more details
* Lawyers question legality of the move
* Traders suspect lurking losses may have prompted warning (Adds analysts comments)
By Eadie Chen and Chen Aizhu
BEIJING, Aug 31 (Reuters) - A report that Chinese state-owned companies will be allowed to walk away from loss-making commodity derivative trades provoked anger and dismay among investment bankers on Monday as they feared it may set a damaging precedent.
The State-owned Assets Supervision and Administration Commission, the regulator and nominal shareholder for state-owned enterprises (SOEs), told six foreign banks that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying in an article published on Saturday.
While the details of the report could not be confirmed, it was Monday's hot topic in financial circles from Shanghai to Singapore as commodity marketers feared that companies holding underwater price hedges could simply renege on the deals, costing banks millions of dollars in profit.
The warning from SASAC follows a series of measures from Beijing this year to crack down on the sale of derivative products by foreign banks to Chinese enterprises, principally big consumers, who bought protection against higher prices last year only to watch the market collapse -- leaving them with losses.
While many companies including top airlines have come clean on the losses, some analysts fear another wave may follow.
"I wouldn't be surprised if more state firms emerge with big derivatives trading losses, otherwise SASAC wouldn't come out with such a radical move," said a Hong Kong-based derivatives analyst, who like most other industry officials and bankers declined to be named due to the high sensitivity of the issue.
A SASAC media official said on Monday that he was waiting for the "relevant department's" official comment before he can clarify to media. A government official said that the Bureau of Financial Supervision and Evaluation under SASAC was handling the issue. The official declined to be named and did not elaborate.
Spokespersons at Goldman Sachs (GS.N) and UBS (UBSN.VX) declined comment, and media officials at Morgan Stanley (MS.N) and JPMorgan (JPM.N) were not immediately available for comment. All are major global providers of commodity risk management.
No bank were named in the Caijing report. The SASAC media officer also declined to identify any specific banks.
"It's a handful of companies who are being encouraged by regulators to re-negotiate," said a second banking source. "It's outrageous, but it's China, so everyone is treading very carefully."
For banks that are hoping to sell more derivatives hedges in China, the world's fastest-expanding major economy and top commodities consumer, the danger goes beyond the immediate risk to existing contracts to the longer-term precedent that suggests Chinese companies can simply renege on deals when they like.
The report follows an order from SASAC in July that required all central government-controlled state companies engaged in trading derivatives to make quarterly reports about their investments, including details of holdings and performance.
But the reported letter opened several important questions that could not immediately be answered.
"If we were among the banks receiving that letter, we would be very angry. But now the key is to find out more details on the letter: In whose name the letter was issued, the government or the corporate's? And under what was the reason for defaulting?" said a Singapore-based marketing executive with a foreign bank.
The source, whose bank did not receive a letter, said that Air China, China Eastern and shipping giant COSCO -- among the Chinese companies that have reported huge derivatives losses since last year -- had issued almost identical notices to banks.
"If it's in the name of the government, the impact will be very negative," said the source, who declined to be named.
Beijing-based derivatives lawyers said the so-called "legal letter" has no legal standing -- SASAC as a shareholder has no business relationship with international banks.
"It's like the father suddenly told the creditors of his debt-ridden son that his son won't pay any of his debt," said a lawyer from the derivatives risks committee of the Beijing Lawyers Association.
It's also unclear why Chinese state firms, which have complained that their foreign banks sometimes did not disclose full information of potential risks when selling them complicated products, did not seek redress through the courts.
"If that is the case, these firms should seek through legal measures to safeguard their rights, instead of turning to the authorities for political interference," said a different lawyer.
SASAC took over the job of overseeing SOEs' derivatives trading from the securities regulator in February after several Chinese firms reported huge losses from derivatives.
Could be the beginning of the end for our wall street cons:
http://www.reuters.com/article/rbssBanks/idUSSP47327420090831
* State-owned firms may default on commodity hedges - report
* Bankers dismayed, confused by report; seek more details
* Lawyers question legality of the move
* Traders suspect lurking losses may have prompted warning (Adds analysts comments)
By Eadie Chen and Chen Aizhu
BEIJING, Aug 31 (Reuters) - A report that Chinese state-owned companies will be allowed to walk away from loss-making commodity derivative trades provoked anger and dismay among investment bankers on Monday as they feared it may set a damaging precedent.
The State-owned Assets Supervision and Administration Commission, the regulator and nominal shareholder for state-owned enterprises (SOEs), told six foreign banks that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying in an article published on Saturday.
While the details of the report could not be confirmed, it was Monday's hot topic in financial circles from Shanghai to Singapore as commodity marketers feared that companies holding underwater price hedges could simply renege on the deals, costing banks millions of dollars in profit.
The warning from SASAC follows a series of measures from Beijing this year to crack down on the sale of derivative products by foreign banks to Chinese enterprises, principally big consumers, who bought protection against higher prices last year only to watch the market collapse -- leaving them with losses.
While many companies including top airlines have come clean on the losses, some analysts fear another wave may follow.
"I wouldn't be surprised if more state firms emerge with big derivatives trading losses, otherwise SASAC wouldn't come out with such a radical move," said a Hong Kong-based derivatives analyst, who like most other industry officials and bankers declined to be named due to the high sensitivity of the issue.
A SASAC media official said on Monday that he was waiting for the "relevant department's" official comment before he can clarify to media. A government official said that the Bureau of Financial Supervision and Evaluation under SASAC was handling the issue. The official declined to be named and did not elaborate.
Spokespersons at Goldman Sachs (GS.N) and UBS (UBSN.VX) declined comment, and media officials at Morgan Stanley (MS.N) and JPMorgan (JPM.N) were not immediately available for comment. All are major global providers of commodity risk management.
No bank were named in the Caijing report. The SASAC media officer also declined to identify any specific banks.
"It's a handful of companies who are being encouraged by regulators to re-negotiate," said a second banking source. "It's outrageous, but it's China, so everyone is treading very carefully."
For banks that are hoping to sell more derivatives hedges in China, the world's fastest-expanding major economy and top commodities consumer, the danger goes beyond the immediate risk to existing contracts to the longer-term precedent that suggests Chinese companies can simply renege on deals when they like.
The report follows an order from SASAC in July that required all central government-controlled state companies engaged in trading derivatives to make quarterly reports about their investments, including details of holdings and performance.
But the reported letter opened several important questions that could not immediately be answered.
"If we were among the banks receiving that letter, we would be very angry. But now the key is to find out more details on the letter: In whose name the letter was issued, the government or the corporate's? And under what was the reason for defaulting?" said a Singapore-based marketing executive with a foreign bank.
The source, whose bank did not receive a letter, said that Air China, China Eastern and shipping giant COSCO -- among the Chinese companies that have reported huge derivatives losses since last year -- had issued almost identical notices to banks.
"If it's in the name of the government, the impact will be very negative," said the source, who declined to be named.
Beijing-based derivatives lawyers said the so-called "legal letter" has no legal standing -- SASAC as a shareholder has no business relationship with international banks.
"It's like the father suddenly told the creditors of his debt-ridden son that his son won't pay any of his debt," said a lawyer from the derivatives risks committee of the Beijing Lawyers Association.
It's also unclear why Chinese state firms, which have complained that their foreign banks sometimes did not disclose full information of potential risks when selling them complicated products, did not seek redress through the courts.
"If that is the case, these firms should seek through legal measures to safeguard their rights, instead of turning to the authorities for political interference," said a different lawyer.
SASAC took over the job of overseeing SOEs' derivatives trading from the securities regulator in February after several Chinese firms reported huge losses from derivatives.
This is bigger than people realize:
http://www.reuters.com/article/rbssBanks/idUSSP47327420090831
* State-owned firms may default on commodity hedges - report
* Bankers dismayed, confused by report; seek more details
* Lawyers question legality of the move
* Traders suspect lurking losses may have prompted warning (Adds analysts comments)
By Eadie Chen and Chen Aizhu
BEIJING, Aug 31 (Reuters) - A report that Chinese state-owned companies will be allowed to walk away from loss-making commodity derivative trades provoked anger and dismay among investment bankers on Monday as they feared it may set a damaging precedent.
The State-owned Assets Supervision and Administration Commission, the regulator and nominal shareholder for state-owned enterprises (SOEs), told six foreign banks that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying in an article published on Saturday.
While the details of the report could not be confirmed, it was Monday's hot topic in financial circles from Shanghai to Singapore as commodity marketers feared that companies holding underwater price hedges could simply renege on the deals, costing banks millions of dollars in profit.
The warning from SASAC follows a series of measures from Beijing this year to crack down on the sale of derivative products by foreign banks to Chinese enterprises, principally big consumers, who bought protection against higher prices last year only to watch the market collapse -- leaving them with losses.
While many companies including top airlines have come clean on the losses, some analysts fear another wave may follow.
"I wouldn't be surprised if more state firms emerge with big derivatives trading losses, otherwise SASAC wouldn't come out with such a radical move," said a Hong Kong-based derivatives analyst, who like most other industry officials and bankers declined to be named due to the high sensitivity of the issue.
A SASAC media official said on Monday that he was waiting for the "relevant department's" official comment before he can clarify to media. A government official said that the Bureau of Financial Supervision and Evaluation under SASAC was handling the issue. The official declined to be named and did not elaborate.
Spokespersons at Goldman Sachs (GS.N) and UBS (UBSN.VX) declined comment, and media officials at Morgan Stanley (MS.N) and JPMorgan (JPM.N) were not immediately available for comment. All are major global providers of commodity risk management.
No bank were named in the Caijing report. The SASAC media officer also declined to identify any specific banks.
"It's a handful of companies who are being encouraged by regulators to re-negotiate," said a second banking source. "It's outrageous, but it's China, so everyone is treading very carefully."
For banks that are hoping to sell more derivatives hedges in China, the world's fastest-expanding major economy and top commodities consumer, the danger goes beyond the immediate risk to existing contracts to the longer-term precedent that suggests Chinese companies can simply renege on deals when they like.
The report follows an order from SASAC in July that required all central government-controlled state companies engaged in trading derivatives to make quarterly reports about their investments, including details of holdings and performance.
But the reported letter opened several important questions that could not immediately be answered.
"If we were among the banks receiving that letter, we would be very angry. But now the key is to find out more details on the letter: In whose name the letter was issued, the government or the corporate's? And under what was the reason for defaulting?" said a Singapore-based marketing executive with a foreign bank.
The source, whose bank did not receive a letter, said that Air China, China Eastern and shipping giant COSCO -- among the Chinese companies that have reported huge derivatives losses since last year -- had issued almost identical notices to banks.
"If it's in the name of the government, the impact will be very negative," said the source, who declined to be named.
Beijing-based derivatives lawyers said the so-called "legal letter" has no legal standing -- SASAC as a shareholder has no business relationship with international banks.
"It's like the father suddenly told the creditors of his debt-ridden son that his son won't pay any of his debt," said a lawyer from the derivatives risks committee of the Beijing Lawyers Association.
It's also unclear why Chinese state firms, which have complained that their foreign banks sometimes did not disclose full information of potential risks when selling them complicated products, did not seek redress through the courts.
"If that is the case, these firms should seek through legal measures to safeguard their rights, instead of turning to the authorities for political interference," said a different lawyer.
SASAC took over the job of overseeing SOEs' derivatives trading from the securities regulator in February after several Chinese firms reported huge losses from derivatives.
another blurb from California:
http://www.nbclosangeles.com/news/local-beat/Rest-in-Peace-and-Dodger-Blue-55408247.html
Rest in Peace and Dodger Blue
By JONATHAN LLOYD
Updated 11:30 AM PDT, Thu, Aug 27, 2009
A "fan" is defined as "an enthusiastic devotee (as of a sport or a performing art) usually as a spectator," according to Merriam-Webster.
But a line of caskets licensed by Major League Baseball takes that definition further... all the way into the afterlife.
For $4,499, fans can buy a casket -- outfitted with Dodgers and Angels logos. An urn costs $799.
That's a bargain compared to a resting place in the vault above Marilyn Monroe.
The urns are die-cast aluminum with a clear coat finish. The base is shaped like a home plate. The top has space for a collectible baseball.
The caskets are decorated with wood panels reminiscent of a baseball bat. The interior, including the pillow, also has team logos and colors.
The Christy Vault Company distributes the caskets. The company has already sold 20 to dedicated Boston Red Sox fans... or perhaps Yankees fans who lost bets on that 2004 American League series.
Eternal Image, the company that holds the licensing agreement with MLB, also has something for Star Trek fans who have lived long, prospered and now want something for the final frontier. The company has a new line of Star Trek licensed urns, caskets, monuments and vaults.
It's going great with the video. Hope this is the start of more positive developments.
........al
Been awhile since we had a write up. It is good to see one again. I like the way this was presented.
........al
Popravsky said Enternal Image has sold 2,000 baseball-themed urns in the past two years and "a couple of hundred" caskets this year. The New York Yankees, Boston Red Sox and Chicago Cubs are the top sellers, but the Dodgers are up there.
hey profiteer, you beat me by 10 minutes, LOL. Here's the article:
Rose Hills offers baseball caskets
By Kevin Modesti, Staff Writer
Posted: 08/26/2009 06:16:40 PM PDT
Christy Vault Company sales manager Hal Wilkes shows the Dodgers' casket and urn at Rose Hills Memorial Park's Sky Rose Chapel in Whittier Aug. 26, 2009. The Christy Vault Co. is now offering Major League Baseball caskets and urns with each team's logo including the Dodgers. (SGVN/Staff photo by Leo Jarzomb)
WHITTIER - This is for Dodgers fans who pledge lifelong loyalty to the ballclub and wish they could offer a little more.
A company that manufactures burial caskets and urns is selling a product line decorated with the colors and logos of the Dodgers, as well as the Angels and 18 other teams, under a licensing agreement with Major League Baseball.
Finally - pardon the expression - a chance to demonstrate your devotion to the Dodgers for all eternity.
"If Dad was a huge Dodgers fan throughout his life, what better way to remember it than with a Dodgers casket?" said Nick Popravsky, vice president of sales for Eternal Image Inc. of Michigan.
"This is just one more way for loved ones to carry on a decedent's passion," said Ann-Marie Harris, office manager for Christy Vault Company Inc., a San Francisco Bay Area company that serves as Eternal Image's West Coast distributor.
Although the baseball caskets and urns have been available for months, the Dodgers line was put on display in Southern California for the first time Wednesday, amid soft piano music and whispering conversation in the SkyRose Chapel at Rose Hills Memorial Park.
The casket is gleaming white 18-gauge steel with baseball-bat grained wood trim and Dodger-blue handles and tassles. Dodgers and MLB logos abound, even on the white velvet lining inside. Suggested price: $4,500.
The urn is blue and white aluminum, with a display dome on top to hold a baseball,
Advertisement
and a home-plate-shaped base. Suggested price: $800.
For comment, we phoned Tommy Lasorda, the Hall of Fame former Dodgers manager who sets the standard for Dodger Blue devotion.
"I think it's great if somebody wants to be buried in a coffin with their team's name on it," Lasorda said.
Lasorda has often said he wants his tombstone to read, "Dodger Stadium was his address, but every ballpark was his home," and to keep promoting the team from the grave by having a Dodgers schedule attached to the marker.
Would Tommy consider being buried in one of these Dodgers caskets?
"Absolutely," Lasorda said. "Maybe I can buy one now and get a deal."
It's all the brainchild of Eternal Image President and CEO Clint Mytych, a 28-year-old former restaurant and luxury car rental business owner who said being new to the funeral industry freed him to think of new approaches.
"We weren't forced into the box that the industry has been in," Mytych said, the pun apparently not intended.
Not that this inspires morbid plays on words, but it does give new meaning to "riding the pine."
Mytych negotiated an agreement with Major League Baseball and followed with contracts to sell caskets and urns with a Star Trek theme as well as items for dog and cat lovers.
Harris said Sue Burns, a San Francisco Giants part-owner who died in July, was buried in a Giants-logoed casket.
Popravsky said Enternal Image has sold 2,000 baseball-themed urns in the past two years and "a couple of hundred" caskets this year. The New York Yankees, Boston Red Sox and Chicago Cubs are the top sellers, but the Dodgers are up there.
Hal Wilkes, director of sales and marketing for Christy Vault Company, said the idea of baseball-themed burials reflects the trend away from "traditional" religious funerals toward personalized tributes.
It seemed to be mere coincidence that all this talk about the Dodgers and burial plans mirrored the teams' recent trajectory in the division-championship race.
kevin.modesti@dailynews.com
(818) 713-3616
Honestly guys, I don't think this will move any more until we get a PR that builds on the last one. Looks like trading range will be in the 2+¢ range for a while. Interest has died down until something else percs. Still a good play.
.........al
Looks like NITE is playing this for all it's worth.eom
Hi Basser- excellent solution. I think we would all be happy with it.
........al
Hope you are right. I'm with you. eom
Mark and list- keep your eyes on Detroit. If social unrest is going to start in full swing, that will be the boiling point. I surely hope we don't see it, but semper fi all.
.........al
Hi LC. We are usually somewhat differing in our opinions here, but in this case I am in total agreement. The TA needs to be ungagged or if their policy is to never divulge, they need to get a new TA. Too many secrets and lack of verifyable info is never good for any company. We need an ungag the TA rally demonstration at company HQ. I think Clint would get the point, LOL.
Gators #1 this year?
...........al
FWIW, I didn't like the way it traded at the close. I may be wrong, it wouldn't be the first time, LOL. I don't see a gap tomorrow. I am seeing a retracement. Tomorrow will tell. Would be a buying op.
..........al
3:50 pm will tell the tale for tomorrow.eom
and 4¢ doesn't seem too heavy at this moment.eom
4¢ + highly possible by close.eom
.036 X .038 now.eom
bid nite .0035
ask auto and vfin .0036
sorry, mine won't copy and paste
.......al
It's not a new technology, but it seems they have given it a new twist. Results are the key.
.....al
I think people are just beginning to notice this one. Great potential for a multibagger even from this level.
.......al
200,000 and 130,000 within 1 minute both buys.eom
Just saw some very large buys go thru.eom
pwrm bids are stacking, slight wall at .033 eom
This is still under the radars of most traders. Daytraders haven't been interested. IMHO still a good buy at these prices. This could take off big with a little more interest. Looking forward to a nice followup PR on the last one.
........al
Got in this AM. Next piece of news will send this flying. Lots of buying going on now. Checked protein research this weekend. Found lots of interesting data. This can be huge. GL2 all.
..........al
It looks like this one is just warming up. Next week should get interesting. Have a great weekend all.
........al
Sent some feelers out to several people that may know something on this one. All but one came back as nothing going on. One heard a rumor 2nd hand that a merger might be in the works. There is no confirmation on this!!! It is only a rumor and I have taken it with a grain of salt. Watching but taking no position as yet. Good luck to all.
...........al
Caught the news on this today. Been watching it as it was a great PR. Thought it would send the share price up for a nice gain. Still watching.
...........al
OS count updated in Ibox. 4 months and no dilution. Must be a record for this company. I don't know what they are doing but they are not selling shares.
.......al
A good site to bookmark. The author, Karl Denninger, really keeps abreast of what is happenning to us.
.....al
http://market-ticker.org/
From another board, thanks to poster Ace Hanlon.
Winners And Losers In The American Warfare State
By Sherwood Ross
August 17, 2009 "Information Clearing House" -- “On my last day in Iraq,” veteran McClatchy News correspondent Leila Fadel wrote August 9th, “as on my first day in Iraq, I couldn’t see what the United States and its allies had accomplished. …I couldn’t understand what thousands of American soldiers had died for and why hundreds of thousands of Iraqis had been killed.”
Quite a few oil company CEO’s and “defense” industry executives, however, do have a pretty good idea of why that war is being fought. As Michael Cherkasky, president of Kroll Inc., said a year after the Iraq invasion boosted his security firm’s profits 231 percent: “It’s the Gold Rush.” What follows is a brief look at some of the outfits that cashed in, and at the multitudes that got took.
“Defense Earnings Continue to Soar,” Renae Merle wrote in The Washington Post on July 30, 2007. “Several of Washington’s largest defense contractors said last week that they continue to benefit from a boom in spending on the wars in Iraq and Afghanistan…” Merle added, “Profit reports from Northrop Grumman, General Dynamics and Lockheed Martin showed particularly strong results in operations in the region.” More recently, Boeing’s second-quarter earnings this year rose 17 percent, Associated Press reported, in part because of what AP called “robust defense sales.”
But war, it turns out, is not only unhealthy for human beings, it is not uniformly good for the economy. Many sectors suffer, including non-defense employment, as a war can destroy more jobs than it creates. While the makers of warplanes may be flying high, these are “Tough Times For Commercial Aerospace,” Business Week reported July 13th. “The sector is contending with the deepening global recession, declining air traffic, capacity cuts by airlines, and reduced availability of financing for aircraft purchases.”
The general public suffers, too. “As President Bush tried to fight the war without increasing taxes, the Iraq war has displaced private investment and/or government expenditures, including investments in infrastructure, R&D and education: they are less than they would otherwise have been,” write Joseph Stiglitz and Linda Bilmes in “The Three Trillion Dollar War”(Norton). Stiglitz holds a Nobel Prize in economics and Bilmes is former assistant secretary of the U.S. Department of Commerce. They say government money spent in Iraq does not stimulate the economy in the way that the same amounts spent at home would.
The war has also starved countless firms for expansion bucks. “Higher borrowing costs for business since the beginning of the Iraq war are bleeding manufacturing investment,” Greg Palast wrote in “Armed Madhouse”(Plume). And when entrepreneurs---who hire so many---lack growth capital, job creation takes a real hit.
We might recall too, the millions abroad who filled the streets to protest President Bush’s impending attack on Iraq and who have quit buying U.S. products, further reducing sales and employment. “American firms, especially those that have become icons, like McDonald’s and Coca-Cola, may also suffer, not so much from explicit boycotts as from a broader sense of dislike of all things American,” Stiglitz and Bilmes write. “America’s standing in the world has never been lower,” they say, noting that in 2007, U.S. “favorable” ratings plunged to 29 percent in Indonesia and nine percent in Turkey. “Large numbers of wealthy people in the Middle East---where the oil money and inequality put individual wealth in the billions---have shifted banking from America to elsewhere,” they say.
Because the Iraq war crippled that country’s oil industry, output fell, supplies tightened, and, according to Palast, “World prices leaped to reflect the shortfall…” What’s more, he points out, after the Iraq invasion the Saudis withheld more than a million barrels of oil a day from the market. “The one-year 121% post-invasion jump in the price of crude, from under $30 a barrel to over $60, sucked that $120 billion windfall to the Saudis from SUV drivers and factory owners in the West.” Count the Saudis among the big winners.
The oil spike subtracted 1.2% from the gross domestic product, “costing the USA just over one million jobs,” Palast reckoned. Stiglitz and Bilmes said the oil price spike means “American families have had to spend about 5 percent more of their income on gasoline and heating than before.” Last year, the Iraq and Afghan wars cost each American household $138 per month in taxes, they estimated. Count the Joneses among the big losers.
Palast writes, “It has been a very good war for Big Oil---courtesy of OPEC price hikes. The five oil giants saw profits rise from $34 billion in 2002 to $81 billion in 2004…But this tsunami of black ink was nothing compared to the wave of $120 billion in profits to come in 2006: $15.6 billion for Conoco, $17.1 billion for Chevron and the Mother of All Earnings, Exxon’s $39.5 billion in 2006 on sales of $378 billion.
Palast notes the oil firms have their own reserves whose value is tied to OPEC’s price targets, and “The rise in the price of oil after the first three years of the war boosted the value of the reserves of ExxonMobil oil alone by just over $666 billion…Chevron Oil, where Condoleezza Rice had served as a director, gained a quarter trillion dollars in value…I calculate that the top five oil operators saw their reserves rise in value by over $2.363 trillion.” Who’s surprised when Forbes reports of the ten most profitable corporations in the world five are now oil and gas companies---Exxon-Mobil, Royal Dutch Shell, BP, Chevron, and Petro-China.
“Since the Iraq War began,” Matthew Rothschild, editor of The Progressive wrote, “aerospace and defense industry stocks have more than doubled. General Dynamics did even better than that. Its stock has tripled.” An Associated Press account published July 23rd observed: “With the military fighting two wars and Pentagon budgets on a steady upward rise, defense companies regularly posted huge gains in profits and rosier earnings forecasts during recent quarters. Even as the rest of the economy tumbled last fall, military contractors, with the federal government as their primary customer, were a relative safe haven.”
Among the big winners are top Pentagon contractors, as ranked by WashingtonTechnology.com as of 2008. Halliburton spun off KBR in 2007 and their operations are covered later. Data was selected for typical years 2007-09.
1.Lockheed Martin
2. Boeing
3. KBR
4. Northrop Grumman
5. General Dynamics
6. Raytheon
7. SAIC
8. L-3 Communciations
9. EDS Corporation
10. Fluor Corporation
# Lockheed Martin, of Bethesda, Md., a major warplane builder, in 2007 alone earned profits of $3 billion on sales of nearly $42 billion.
# Boeing, of Chicago, saw its 2007 net profit shoot up 84% to $4 billion, fed by “strong growth in defense earnings,” according to an Agence France-Presse report.
# Northrop Grumman, of Los Angeles, a manufacturer of bombers, warships and military electronics, had 2007 profits of $1.8 billion on sales of $32 billion.
# General Dynamics, of Falls Church, Va., had profits in 2008 of about $2.5 billion on sales of $29 billion. It makes tanks, combat vehicles, and mission-critical information systems.
# Raytheon, of Waltham, Mass, reported about $23 billion in sales for 2008. It is the world’s largest missile maker and Bloomberg News says it is benefiting from “higher domestic defense spending and U.S. arms exports.”
# Scientific International Applications Corp., of La Jolla, Calif., an engineering and technology supplier to the Pentagon, had sales of $10 billion for fiscal year ending Jan. 31, 2009, and net income of $452 million.
# L-3, of New York City, has enjoyed sales growth of about 25% a year recently. Its total 2008 sales of $15 billion brought it profits of nearly $900 million. Its primary customer is the Defense Department, to which it supplies high tech surveillance and reconnaissance systems.
# EDS Corp., of Plano, Tex., purchased by Hewlett-Packard in May, 2008, had 2007 sales of nearly $20 billion. Its priority project is building the $12 billion Navy-Marine Corps Intranet, said to be the largest private network in the world.
# Fluor Corp., of Irvine, Tex., an engineering and construction firm, had net earnings of $720 million in 2008 on sales of $22 billion.
The good times continue to roll for military contractors under President Obama, who has increased the Pentagon’s budget by 4 percent to a total of about $700 billion. One reason military contractors fare so well is that no-bid contracts with built-in profit margins tumble out of the Pentagon cornucopia directly into their laps. The element of “risk,” so basic to capitalism, has been trampled by Pentagon purchasing agents even as its top brass rattle their missiles at socialist governments abroad. If this isn’t enough, in 2004 the Bush administration slipped a special provision into tax legislation to cut the tax on war profits to 7% compared to 21% paid by most U.S. manufacturers.
Former Halliburton subsidiary KBR, according to author Pratap Chatterjee in his “Halliburton’s Army”(Nation Books), raked in “more than $25 billion since the company won a ten-year contract in late 2001 to supply U.S. troops in combat situations around the world.” As all know, President Bush’s Vice President Dick Cheney previously headed Halliburton (1995-2000) and landed in the White House the same year Halliburton got its humungous outsourcing contract. Earlier, as Defense Secretary, (1989-1993) Cheney sparked the revolutionary change to outsourcing military support services to the privateers. Today, Halliburton ranks among the biggest “defense” winners of all.
Halliburton’s army “employs enough people to staff one hundred battalions, a total of more than 50,000 personnel who work for KBR, a contract that is now projected to reach $150 billion,” Chatterjee writes. “Together with the workers who are rebuilding Iraq’s infrastructure and the private security divisions of companies like Blackwater, Halliburton’s Army now outnumber the uniformed soldiers on the ground in Iraq.”
Accompanying Pentagon outsourcing, Chatterjee writes, “is the potential for bribery, corruption, and fraud. Dozens of Halliburton/KBR workers and their subcontractors have already been arrested and charged, and several are already serving jail terms for stealing millions of dollars, notably from Camp Arifjan in Kuwait.”
There’s likely no better example of how Halliburton/KBR literally burned taxpayers’ dollars than its destruction of $85,000 Mercedes and Volvo trucks when they got flat tires and were abandoned. James Warren, a convoy truck driver testified to the Government Affairs Committee in July, 2004, “KBR didn’t seem to care what happened to its trucks…It was common to torch trucks that we abandoned…even though we all carried chains and could have towed them to be repaired.”
Bunnatine Greenhouse, once top contract official at the U.S. Army Corps of Engineers, made headlines by demanding old-fashioned free enterprise competitive bidding. She told a Senate committee in 2005: “I can unequivocally state the abuse related to contracts awarded to KBR represents the most blatant and improper abuse I have witnessed” in 20 years of working on government contracts. Greenhouse was demoted for her adherence to the law, Chatterjee said, but she became a cover girl at “Fraud” magazine and was honored by the Giraffe Society, a tribute to one Federal employee who stuck her neck out.
Tales of Halliburton/KBR’s alleged swindles fill books. Rory Maybee, a former Halliburton/KBR contractor who worked at dining facilities in Camp Anaconda in 2004 told the U.S. Senate Democratic Policy Committee “that the company often provided rotten food to the troops and often charged the army for 20 thousand meals a day when it was serving only ten thousand.” Food swindling, though, is small potatoes. Say Stiglitz and Bilmes: “KBR has also been implicated in a lucrative insurance scam that has gouged U.S. taxpayers for at least $600 million.”
To fatten profit margins, contractors who cheat U.S. taxpayers apparently think nothing of underpaying their help. “While the executives of KBR, Blackwater, and other firms are making profits, many of those performing the menial work, such as cooking, driving, cleaning, and laundry, are poorly paid nationals from India, Pakistan, and other Asian and African countries,” Stiglitz and Bilmes write. “Indian cooks are reported to earn $3-$5 a day. At the same time, KBR bills the American taxpayer $100 per load of laundry.” Blackwater, the security firm repeatedly charged with shoot-first tactics, fraudulently obtained small-business set-aside contracts worth more than $144 million, they assert.
According to “Blackwater”(Nation Books) by Jeremy Scahill, the security firm in 2004 got a five-year contract to protect U.S. officials in Iraq totaling $229 million but as of June, 2006, just two years into the contract, it had been paid $321 million, and by late 2007 it had been paid more than $750 million. Scahill reports an audit charged that Blackwater included profit in its overhead and its total costs. The result was “not only in a duplication of profit but a pyramiding of profit since in effect Blackwater is applying profit to profit.” Scahill writes, “The audit also alleged that the company tried to inflate its profits by representing different Blackwater divisions as wholly separate companies.”
“As of summer, 2007, there were more ‘private contractors’ deployed on the U.S. government payroll in Iraq (180,000) than there were actual soldiers (160,000),” Scahill said. “These contractors worked for some 630 companies and drew personnel from more than 100 countries around the globe. …This meant the U.S. military had actually become the junior partner in the coalition that occupies Iraq.” And each Blackwater operative was costing the American taxpayers $1,222 per day. The Defense Department remains, of course, America’s No. 1 Employer, with 2.3 million workers (roughly twice the size of Wal-Mart, which has 1.2 million staffers) perhaps because America’s biggest export is war.
“Who pays Halliburton and Bechtel?” philosopher Noam Chomsky asks rhetorically in his “Imperial Ambitions” (Metropolitan Books). “The U.S. taxpayer,” he answers. “The same taxpayers fund the military-corporate system of weapons manufacturers and technology companies that bombed Iraq. So first you destroy Iraq, then you rebuild it. It’s a transfer of wealth from the general population to narrow sectors of the population.” It’s also been a body blow to Iraq, killing a million inhabitants, forcing two million into exile and millions more out of their homes. Incredibly, the U.S. proposed to reconstruct the nation it invaded with their oil revenues---and then, after taking perhaps $8 billion left the job undone. (Since the U.S. kept no records of how the dough was dispensed, it is not possible to identify the recipients.)
As Stiglitz and Bilmes remind us, “The money spent on Iraq could have been spent on schools, roads, or research. These investments yield high returns.” In an article in the August 24th Nation, policy analyst Georgia Levenson Keohane cites the Center on Budget and Policy Priorities to the effect that 48 states are reporting deficits totaling nearly $166 billion, projected to reach, cumulatively, $350 billion-$370 billion by 2011. “Although many states have attempted tax increases, these are politically challenging and often insufficient to close the gaps. Consequently, statehouses have been forced to cut vital services at a time when the need for them is ever more desperate,” Keohane writes.
In the same issue, reporter Marc Cooper notes the poverty rate in Los Angeles county borders on 20 percent; that California’s schools are ranked 47th nationally; that the state college system has suspended admissions for Spring, 2010; that thousands of state workers are being laid off and/or forced to take furlough days; that unemployment has reached 12 percent; that state parks are being closed; that personal bankruptcies peaked last; that one in four “capsized mortgages in the U.S. is in California.” Plus, California’s bond rating is just above the junk level and it faces a $26 billion budget shortfall.
California’s woes need to be examined in the light of the $116 billion the National Priorities Project of Northampton, Mass., says its taxpayers have shelled out for the wars in Afghanistan and Iraq since 2001. Those same dollars roughly would put four million California students through a four-year college. Bear in mind, too, outlays for those wars are but a fraction of all Pentagon spending, so the total military tax bill is far higher than $116 billion to California.
In calling for a reduction in military spending, Rep. Barney Frank (D.-Mass.) said, "The math is compelling: if we do not make reductions approximating 25 percent of the military budget starting fairly soon, it will be impossible to continue to fund an adequate level of domestic activity even with a repeal of Bush's tax cuts for the very wealthy….(American] well-being is far more endangered by a proposal for substantial reductions in Medicare, Social Security or other important domestic areas than it would be by canceling weapons systems that have no justification from any threat we are likely to face." On the other hand, maybe Americans want to keep paying to operate 2,000 domestic and foreign military bases and spend more money on armies and weapons of death than all other nations combined. Maybe they like living in the greatest Warfare State the world has ever known. My hunch, though, is a lot of Americans haven’t connected the country’s looming bankruptcy with the greedy, gang from the military-industrial complex out to control the planet, its people, and its precious resources.
After the long-suffering civilian population of Iraq, whose "crime" was having oil---a country Steiglitz says that has been rendered virtually unlivable---the big losers are the American taxpayers who are bleeding income, jobs, and quality of life, not just sacrificing family members, on behalf of a runaway war machine. California’s plight is being repeated everywhere. A great nation is being looted and millions of its citizens are being pauperized before our eyes.
Silver at $8 X .715 = 5.72 times face value as melt value of US 90% silver coins. I would say back up the trailer and load it up. I would be, and that is a fact not MHO.
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Some fresh posters with objectivity and no agenda. Always a refreshing aspect on the board. Agree with or agree to disagree on the prospects of the company. It makes for good civil discussions which at times are seriously lacking. I believe the main theme now is given the past history of the company, admittedly there have been bad times as well as good, and given the current share price has been drubbed unmercifully ( I won't speculate on how or why ), will the company survive all this and prosper in the weeks, months and years ahead? It does seem to be the root of all discussions. I don't have a crystal ball so I can't say for sure either way. I can read a 10K and 10Q and thankfully the company has come though on uplisting so we have those documents to read and ponder. They will tell the story. No one , not myself, nor Bee, nor Lurker, nor LC, nor 5* or anyone else should influence an individual's investment decisions. Stick with the documents and invest, divest, hold, or wait for better or worse times before making a decision. I'm still holding over 3 million shares (my disclosure) and truthfully after last week if I had $6000 to spare I would have over 4 million shares now. I guess that says my take on the company pretty well. Agree or disagree, that's what these boards are all about- discussion. My best to all here.
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And I've got a bridge to sell in Brooklyn
WASHINGTON -- Treasury Secretary Timothy Geithner said in an interview with the Wall Street Journal that the Obama administration wouldn't allow Wall Street to return to such old habits as taking on excessive risk, and that plans to overhaul financial market regulation were on track.
Geithner pushed back against criticism that Wall Street, which is returning to profitability, is also returning to business as usual.
"I don't think the financial system is reverting to past practice, and we won't let that happen," Geithner told the Journal. "The big banks are running with much less leverage now, much more conservative liquidity cushions, there's been a significant shrinking of their balance sheets, getting rid of bad assets and cleaning up. And the weakest parts of the system don't exist anymore."
Some banks, including those that received government bailout money, are earning record profits, increasing pay and ramping up risk. Goldman Sachs, for instance, recently recorded its most profitable quarter ever and boosted its degree of risk-taking as measured by how much money it could lose in a single day.
Geithner said a functioning and profitable financial system was a "necessary precondition to a stronger economy."
"The consequence of achieving stability is that people can raise money, can raise equity, can borrow more easily at lower rates, that these markets have liquidity again," Geithner said. "The fact that the core parts of the U.S. financial system look like they're profitable is overwhelmingly good."
Still, the administration is concerned about the potential for populist anger, particularly as banks resume paying high salaries and bonuses to executives. Last week, Wells Fargo said it increased base salaries for top executives to get around government rules capping bonuses for firms receiving bailout funds.
Lurker, could be. In many years of trading, I rate ARCA as one of the saviest MMs in the business. Could be they have been buying all these cheapies and are ready for a run. That's all just speculation. Don't want the rumor mill to start, LOL.
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ARCA on the ask at .012 eom
Hello and happy trading all. Just stopped in for lunch and saw a 1.8 mill share trade go thru. Buy or sell? I can't tell. My best to all here.
........al