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CHAR....those Russian mobsters that "took under" NLG.to can now work on a "take-under" of CHAR.
They will most likely rob you if they can rob the NLG.to shareholder like they are apparently doing and getting away with.
What is the "6 month average" price of CHAR???
That's how the came up with "fair value"(sic) for Nelson Resources....
watch out!
Rogue
Frighteningly true story and a good example of the "agenda" to take away every single freedom and liberty afforded to us in the Bill of Rights....Will we see the rise of the totalitarian "Police State" soon?? Or as some would say.....a "New World Order"??
Train Wreck of the Week - October 1 2005
Jose Padilla and the consequences for us all... Invesment experts wrong about the dollar... no shame in the White House... John Roberts loves reading Richard Haass... British journalist Robert Fisk banned from entering the US... the push to cutt US farm subsidies...
We are forced to speak again of the situation of Jose Padilla and the dire consequences it holds for all Americans. Padilla was taken into custody by federal agents on May 8, 2002, as part of the war on terrorism and held as a material witness. It is important to point out here that being held as a material witness is a ruse to incarcerate. We do not know if Mr. Padilla is innocent or guilty of anything and neither does the US government. If they had a case they’d indict and charge him. For most of his time in confinement he’s been held in a naval brig in South Carolina. He is being held indefinitely because our appeal court says our President can do this in a time of war. Mr. Padilla is an American citizen. Even though convicted of nothing he is considered an illegal combatant and so he does not have the rights and guarantees that the constitution requires the government to accord criminal defendants. That means the Pentagon can hold him forever.
Under the Magna Carta and via common law and our Bill of Rights, there are procedural rights and guarantees and these protections have been lost in the indefinite jailing of Padilla. That means our government, under the guise of terrorism, can pick up and jail anyone anywhere in the world for any reason at any time. No habeas corpus as to why someone should be detained. No legal counsel, no due process and charges. There is a right to trial by jury. There is the right to confront witnesses and there is a presumption of innocence, which entitles the accused to remain silent and requires the government to prove guilt beyond a reasonable doubt. These guarantees apply to Americans and foreigners who are accused of a federal crime.
The case of Padilla is an attempt by our government to destroy America’s federal criminal-justice system and replace it as was done in Germany under Nazism in the 1930s. Ninety-eight percent of Americans know nothing of the Padilla case and its threat to our rights and guarantees by any despot. Our government wants the authority to kidnap and punish without any federal court interference whatsoever. The concept is anyone government accuses of terrorism becomes a prisoner of war, not a criminal defendant, and this prisoner of war is not entitled to the protections of the Geneva Convention, which governs prisoners of war. These are illegal combatants because terrorism is not a lawful way to wage war and because these uncharged and un-convicted combatants are not wearing military uniforms. All this illegal activity by our government is sanctioned by and signed off by our President.
At the Supreme Court level if these powers are upheld then no one is safe from the tyranny of a corrupt, despotic government. We can guarantee you there will be thousands of cases of prosecutorial abuse in our future and they will include anyone who speaks out about our elitist government. No one will be safe and this is no exaggeration. History is replete with examples of governments that used the criminal justice system to round up, punish and execute innocent people. With today’s corporatist fascist government in America no less can be expected. If the Padilla case is not reversed by the Supreme Court anyone criticizing government will be classified as those supporting terrorists. The bang on the door will come at 3:00 a.m. Your home will be surrounded by heavily armed government employees; you’ll be picked up, tortured, abused, raped and thrown in jail indefinitely. You can do nothing to defend yourself. There is no check on the military to take anyone into custody at any time. If the Supreme Court agrees with the appeals court then that’s when they’ll start collecting people like us who speak out.
Our President is masterminding this entire program with the assistance of the neocons and our congress. This is an attempt to impose military rule over America and we believe you should contact your representatives and express your dismay at their lack of interest in this most important issue.
Suspects arrested of detained by federal authorities could be forced to provide samples of their DNA that would be recorded at a central database under a provision of a Senate bill to expand government collection of personal data. The measure was approved by the Senate Judiciary Committee last week and is supported by the White House, but has not gone to the floor for a vote. This goes beyond the current law, which allows federal authorities to collect and record samples of DNA from those convicted of crimes.
This is absolutely outrageous. This is like fingerprinting. How can government demand such information from innocent people? Next we’ll have profiling based on genetic characteristics. Get after your elected representatives now and stop this unconstitutional invasion of our privacy.
Most experts thought that investors and central banks would be dollar sellers in 2005. The figures now tell us central banks were big buyers, not sellers. There was some diversification but by and large the plan by the major central banks was to have a dollar rally and take pressure off the euro. If you remember last we reported the IMF figures and they said that during 2004 the Fed and foreign investors absorbed $409.7 billion or about 113% of total Treasury issuance of $362.5 billion. This may work for now but its long-term bearish on the dollar and it’s very pro-inflationary. Gold is the only neutral non-fiat currency and it’s now rising against all currencies and as long as foreign central banks continue to buy dollars of decreasing value versus gold they’ll all continue downward. Gold will go up indefinitely as long as they continue to do what they are doing.
There is no shame and there is no embarrassment neither in congress or the White House. There are but a few statesmen and lots of pragmatic, purchased, politicians. They almost all enrich themselves as we head toward financial oblivion. We have two natural disasters three weeks apart that will cost $300 to $500 billion and we have a president who won’t increase taxes and a congress that refuses to cut pork. The Republican leader Tom DeLay says there is no fat left to cut in the federal budget. Does he really believe we are that stupid? If we were not optimists we’d be very pessimistic and depressed. As optimists we know we’ll win. The only question is what will be the price we have to pay? We have colossal debt and it keeps getting bigger. We have another quagmire called a war costing us $6 billion a day. When Roosevelt was faced with such a dilemma he cut non-war spending 20% and Truman cut 28%. Vietnam and Johnson spent with abandon. In 1982 there were 10 pork projects approved by Congress. In our recently passed Transportation Equity Act there were 6,371 totaling almost $400 billion. There is no morality left in Washington. It has truly become a den of vipers. All our elected representatives worry about is reelection, by buying votes and campaign contributions, a process that is totally corrupt as is the use of lobbyists, which should be banned. This is beyond cynical. America needs a wake up call. God tried to give us that with Katrina and Rita, but we are not listening. Hedonists never listen.
We are told California’s house appreciation will only be 10% in 2006, probably versus 14% in 2005. That could be the case if the 10-year Treasury stays at 4.25% because foreign governments continue to buy them without incentive for profit. That means a 5.75% 30-year fixed rate mortgage. The exotic mortgages will continue and the day of reckoning will have been suspended for another year. In the process though gold will go to $850 an ounce as official inflation climbs to 6-7%. Thus, the $523,150 house will increase in value to $575,500 as projected unit sales fall 2% to 630,610.
At the same time the California Association of Realtors tells us this glowing story they also tell us the 30-year fixed mortgage rate will rise to 6.4% and one-year ARMS will hit 5.1%. A 10% gain in value would mean only 15% of Californians could afford the average home. We disagree with the esteemed association. A 1/2% higher lending rate will leave a flat market and downward pressure on housing prices. That would also mean those with interest only and adjustable rate mortgages may not be able to make payments and go into foreclosure. That would also put pressure on housing prices. We’ll see, but 2006 is not going to be as good a year as 2005.
We are told that our Supreme Court Justice nominee expressed great enthusiasm for a new book by Richard Haass, a friend who runs the Council on foreign relations. The book, entitled “The Opportunity” presents the idea of how to integrate the world under a single political and economic order through a war of attrition. That would be accomplished by an end run around national sovereignty, eroding it piece by piece. “Our policies must recognize that globalization is a reality, not a choice,” says Haass in the tome that has so enchanted John Roberts. We told you in a previous issue that Roberts wouldn’t have been chosen if he wasn’t part of the elitists program. This of course proves it, so what else did you expect? Roberts agrees with Haass, “Sovereignty is conditional, even contractual, rather than absolute,” subject to revocation by the international community in the case of nations that defy its will. “The world 35 years from now will be semi-sovereign. It will reflect the need to adapt legal and political principles to the most serious challenges.” Roberts has been chosen by the Illuminati to adapt the legal system to the New World Order described in the manifesto written by his dear friend who is a top Illuminist at the Council on Foreign relations. Did you really think you were going to get someone who would look out for the interests of the American people?
Louisiana’s congressional delegation has requested $40 billion for Army Corps of Engineers projects in the wake of Hurricane Katrina, about 10 times the annual corps budget for the entire nation, or 16 times the amount the corps has said it would need to protect New Orleans from a Category 5 hurricane. As you know, the funds were diverted for the war in Iraq and used by Fatherland Security to pursue phantom terrorists. That is in addition to the $32 billion request by the Governor of Louisiana. In eying the requests they are found to be loaded with pork. These requests are in addition to the $62.3 billion already approved. That is about $134.3 billion. That cost of $200 billion when all is said and done is stretching toward $400 billion. The requests boggle the mind. Brazen doesn’t begin to describe it. The Louisiana delegation is using Katrina as an excuse to resurrect a laundry list of pork projects. All the work done on requests for the Congressional delegation was done by lobbyists who are also on a working group. We should expect these kinds of requests the way endemic corruption is today in Washington.
Robert Fisk, the great British journalist who has been covering war zones for decades, has been banned from entering the US. This is of course for reporting the truth and repeatedly exposing the US and British governments’ disinformation campaigns. Fisk has been told his papers were not in order. This, of course, comes under the venue of the Patriot Act and Fatherland Security. Fisk is probably suspected of aiding and abetting terrorism. We are surprised he wasn’t thrown in jail. Fed chairman, Sir Alan Greenspan, told France’s Finance Minister Thierry Breton that the US has, “lost control of its budget deficit.” Breton said, “The US has lost control of their budget at a time when racking up deficits has been authorized without any control from congress. The situation that is creating tension today on the currency market is clearly the American deficit. One has the feeling that interest rates will probably continue to rise slightly until his departure.” Greenspan is due to retire in January 2006.
As the Chinese yuan trading band widened from 1.5% to 3% as US Treasury paper came under pressure as traders surmised that the Bank of China would be buying less Treasury debt as part of its dollar intervention operations. There is no further need to buy dollars and Treasuries because the yuan is no longer based on the dollar. It is based on a basket of currencies. Program Trading accounts for 70.8% of NYSE volume. That is 1322.7 million shares daily. This has nothing to do with investment. The concept has turned the exchanges into gambling casinos. Its little wonder the average investor is out of the market. Brokerage firms executed an additional 839.4 million shares daily of program trading away from the NYSE, with 0.5% of the overall total on foreign markets.
The IMF says, “There is rising concern among the world’s economic leaders that financial market participants may be under-estimating economic risks and that implies that central banks will keep lifting interest rates for some time.” They should mention that to real estate investors.
The office of the Comptroller of the currency reports a net easing of retail underwriting standards and it warns that banks are overly concerned about fee generation and under concerned about loan quality. They just want to generate commissions without regard to profit and loss. Banks are concerned about renting money and not the repayment of principal. Alan Greenspan has fostered that mentality with his relentless credit creation and the perceived Greenspan put.
One of these days the denizens of the foreign exchange market are going to discover that the dollar and the American economy will not always be the logical repository of capital at the margin. The alternative, the euro, is facing a European recession, EU political problems, and political problems in Italy as well as Germany. That is all understandable, but the dollar’s problems are far greater.
August existing home sales rose 2%. Sales were up 7.8% from August 2004 and were the second highest on record. The median home sales price rose 15.8% to $220,000 year-on-year. Inventories of homes for sale rose 3.5% in August to a 4.7% month supply, the most plentiful month’s supply since November 2003.
On Monday, in spite of the Fed adding $10 billion in repurchase agreements and putting the repo pool at $94.830, the market struggled all day. Gold was hit in Europe and then in the US, but gold rebounded strongly for the day.
The World Bank’s policy-making committee has agreed to a global debt-relief proposal sought by the Group of 8. That will wipe out $55 billion in debt for 37 nations. Our experience having lived in a number of third world nations is that they‘ll run their debts up again. An unspoken part of the agreement is the privatization of utilities in all countries by US or European elitist companies.
The US is under growing pressure to cut farm subsidies as their latest meeting with three other trade powers ended in deadlock. There are only three months left to agree on a framework global trade treaty. There is a good chance the US will not bend. They think their tariffs of 12% are acceptable. In addition, there are other simmering issues between rich and poor countries. Brazil is seeking WTO sanctions against the US after the elitist US neocons failed to comply with a ruling ordering it to reform cotton subsidies. The EU has also angered Brazil, Thailand and Australia by announcing plans to dump its two million metric ton sugar surplus on world markets just before a ban on its sugar subsidies enters into force.
Shortages of building materials along the Gulf Coast will increase construction costs and support housing price gains if interest rates stay in their current mode. We believe they are headed higher. The experts expect the national median price for housing of all types to rise 10.8% this year. Over the past five years homes have risen in value by 53%.
Citizens for Responsibility and Ethics in Washington have listed the 13 most corrupt politicians in Washington. Leading the pack is Senate Majority Leader Bill Frist (R-TN) and House Majority whip Roy Blunt (R-MO). Then there are Representatives Richard Pombo (R-CA), Maxine Waters (D-CA) and Randy “Duke” Cunningham (R-CA). Then there are Senator Conrad Burns (R-MT) and Representatives Bob Ney (R-OH) and Tom Feeney (R-FL). William J. Jefferson and Cunningham are under federal investigation. The other three are Senator Rick Santorum (R-PA), Representatives Charles H. Taylor (R-NC) and Marilyn N. Musgrave (R-CO) and Rep. Rick Renzi (R-AZ). We are sure there are some subjective feelings being vented.
Do you want to read more by Bob Chapman? There are 87 previous issues for you to read.
Rogue
Frighteningly true story and a good example of the "agenda" to take away every single freedom and liberty afforded to us in the Bill of Rights....Will we see the rise of the totalitarian "Police State" soon??
Train Wreck of the Week - October 1 2005
Jose Padilla and the consequences for us all... Invesment experts wrong about the dollar... no shame in the White House... John Roberts loves reading Richard Haass... British journalist Robert Fisk banned from entering the US... the push to cutt US farm subsidies...
We are forced to speak again of the situation of Jose Padilla and the dire consequences it holds for all Americans. Padilla was taken into custody by federal agents on May 8, 2002, as part of the war on terrorism and held as a material witness. It is important to point out here that being held as a material witness is a ruse to incarcerate. We do not know if Mr. Padilla is innocent or guilty of anything and neither does the US government. If they had a case they’d indict and charge him. For most of his time in confinement he’s been held in a naval brig in South Carolina. He is being held indefinitely because our appeal court says our President can do this in a time of war. Mr. Padilla is an American citizen. Even though convicted of nothing he is considered an illegal combatant and so he does not have the rights and guarantees that the constitution requires the government to accord criminal defendants. That means the Pentagon can hold him forever.
Under the Magna Carta and via common law and our Bill of Rights, there are procedural rights and guarantees and these protections have been lost in the indefinite jailing of Padilla. That means our government, under the guise of terrorism, can pick up and jail anyone anywhere in the world for any reason at any time. No habeas corpus as to why someone should be detained. No legal counsel, no due process and charges. There is a right to trial by jury. There is the right to confront witnesses and there is a presumption of innocence, which entitles the accused to remain silent and requires the government to prove guilt beyond a reasonable doubt. These guarantees apply to Americans and foreigners who are accused of a federal crime.
The case of Padilla is an attempt by our government to destroy America’s federal criminal-justice system and replace it as was done in Germany under Nazism in the 1930s. Ninety-eight percent of Americans know nothing of the Padilla case and its threat to our rights and guarantees by any despot. Our government wants the authority to kidnap and punish without any federal court interference whatsoever. The concept is anyone government accuses of terrorism becomes a prisoner of war, not a criminal defendant, and this prisoner of war is not entitled to the protections of the Geneva Convention, which governs prisoners of war. These are illegal combatants because terrorism is not a lawful way to wage war and because these uncharged and un-convicted combatants are not wearing military uniforms. All this illegal activity by our government is sanctioned by and signed off by our President.
At the Supreme Court level if these powers are upheld then no one is safe from the tyranny of a corrupt, despotic government. We can guarantee you there will be thousands of cases of prosecutorial abuse in our future and they will include anyone who speaks out about our elitist government. No one will be safe and this is no exaggeration. History is replete with examples of governments that used the criminal justice system to round up, punish and execute innocent people. With today’s corporatist fascist government in America no less can be expected. If the Padilla case is not reversed by the Supreme Court anyone criticizing government will be classified as those supporting terrorists. The bang on the door will come at 3:00 a.m. Your home will be surrounded by heavily armed government employees; you’ll be picked up, tortured, abused, raped and thrown in jail indefinitely. You can do nothing to defend yourself. There is no check on the military to take anyone into custody at any time. If the Supreme Court agrees with the appeals court then that’s when they’ll start collecting people like us who speak out.
Our President is masterminding this entire program with the assistance of the neocons and our congress. This is an attempt to impose military rule over America and we believe you should contact your representatives and express your dismay at their lack of interest in this most important issue.
Suspects arrested of detained by federal authorities could be forced to provide samples of their DNA that would be recorded at a central database under a provision of a Senate bill to expand government collection of personal data. The measure was approved by the Senate Judiciary Committee last week and is supported by the White House, but has not gone to the floor for a vote. This goes beyond the current law, which allows federal authorities to collect and record samples of DNA from those convicted of crimes.
This is absolutely outrageous. This is like fingerprinting. How can government demand such information from innocent people? Next we’ll have profiling based on genetic characteristics. Get after your elected representatives now and stop this unconstitutional invasion of our privacy.
Most experts thought that investors and central banks would be dollar sellers in 2005. The figures now tell us central banks were big buyers, not sellers. There was some diversification but by and large the plan by the major central banks was to have a dollar rally and take pressure off the euro. If you remember last we reported the IMF figures and they said that during 2004 the Fed and foreign investors absorbed $409.7 billion or about 113% of total Treasury issuance of $362.5 billion. This may work for now but its long-term bearish on the dollar and it’s very pro-inflationary. Gold is the only neutral non-fiat currency and it’s now rising against all currencies and as long as foreign central banks continue to buy dollars of decreasing value versus gold they’ll all continue downward. Gold will go up indefinitely as long as they continue to do what they are doing.
There is no shame and there is no embarrassment neither in congress or the White House. There are but a few statesmen and lots of pragmatic, purchased, politicians. They almost all enrich themselves as we head toward financial oblivion. We have two natural disasters three weeks apart that will cost $300 to $500 billion and we have a president who won’t increase taxes and a congress that refuses to cut pork. The Republican leader Tom DeLay says there is no fat left to cut in the federal budget. Does he really believe we are that stupid? If we were not optimists we’d be very pessimistic and depressed. As optimists we know we’ll win. The only question is what will be the price we have to pay? We have colossal debt and it keeps getting bigger. We have another quagmire called a war costing us $6 billion a day. When Roosevelt was faced with such a dilemma he cut non-war spending 20% and Truman cut 28%. Vietnam and Johnson spent with abandon. In 1982 there were 10 pork projects approved by Congress. In our recently passed Transportation Equity Act there were 6,371 totaling almost $400 billion. There is no morality left in Washington. It has truly become a den of vipers. All our elected representatives worry about is reelection, by buying votes and campaign contributions, a process that is totally corrupt as is the use of lobbyists, which should be banned. This is beyond cynical. America needs a wake up call. God tried to give us that with Katrina and Rita, but we are not listening. Hedonists never listen.
We are told California’s house appreciation will only be 10% in 2006, probably versus 14% in 2005. That could be the case if the 10-year Treasury stays at 4.25% because foreign governments continue to buy them without incentive for profit. That means a 5.75% 30-year fixed rate mortgage. The exotic mortgages will continue and the day of reckoning will have been suspended for another year. In the process though gold will go to $850 an ounce as official inflation climbs to 6-7%. Thus, the $523,150 house will increase in value to $575,500 as projected unit sales fall 2% to 630,610.
At the same time the California Association of Realtors tells us this glowing story they also tell us the 30-year fixed mortgage rate will rise to 6.4% and one-year ARMS will hit 5.1%. A 10% gain in value would mean only 15% of Californians could afford the average home. We disagree with the esteemed association. A 1/2% higher lending rate will leave a flat market and downward pressure on housing prices. That would also mean those with interest only and adjustable rate mortgages may not be able to make payments and go into foreclosure. That would also put pressure on housing prices. We’ll see, but 2006 is not going to be as good a year as 2005.
We are told that our Supreme Court Justice nominee expressed great enthusiasm for a new book by Richard Haass, a friend who runs the Council on foreign relations. The book, entitled “The Opportunity” presents the idea of how to integrate the world under a single political and economic order through a war of attrition. That would be accomplished by an end run around national sovereignty, eroding it piece by piece. “Our policies must recognize that globalization is a reality, not a choice,” says Haass in the tome that has so enchanted John Roberts. We told you in a previous issue that Roberts wouldn’t have been chosen if he wasn’t part of the elitists program. This of course proves it, so what else did you expect? Roberts agrees with Haass, “Sovereignty is conditional, even contractual, rather than absolute,” subject to revocation by the international community in the case of nations that defy its will. “The world 35 years from now will be semi-sovereign. It will reflect the need to adapt legal and political principles to the most serious challenges.” Roberts has been chosen by the Illuminati to adapt the legal system to the New World Order described in the manifesto written by his dear friend who is a top Illuminist at the Council on Foreign relations. Did you really think you were going to get someone who would look out for the interests of the American people?
Louisiana’s congressional delegation has requested $40 billion for Army Corps of Engineers projects in the wake of Hurricane Katrina, about 10 times the annual corps budget for the entire nation, or 16 times the amount the corps has said it would need to protect New Orleans from a Category 5 hurricane. As you know, the funds were diverted for the war in Iraq and used by Fatherland Security to pursue phantom terrorists. That is in addition to the $32 billion request by the Governor of Louisiana. In eying the requests they are found to be loaded with pork. These requests are in addition to the $62.3 billion already approved. That is about $134.3 billion. That cost of $200 billion when all is said and done is stretching toward $400 billion. The requests boggle the mind. Brazen doesn’t begin to describe it. The Louisiana delegation is using Katrina as an excuse to resurrect a laundry list of pork projects. All the work done on requests for the Congressional delegation was done by lobbyists who are also on a working group. We should expect these kinds of requests the way endemic corruption is today in Washington.
Robert Fisk, the great British journalist who has been covering war zones for decades, has been banned from entering the US. This is of course for reporting the truth and repeatedly exposing the US and British governments’ disinformation campaigns. Fisk has been told his papers were not in order. This, of course, comes under the venue of the Patriot Act and Fatherland Security. Fisk is probably suspected of aiding and abetting terrorism. We are surprised he wasn’t thrown in jail. Fed chairman, Sir Alan Greenspan, told France’s Finance Minister Thierry Breton that the US has, “lost control of its budget deficit.” Breton said, “The US has lost control of their budget at a time when racking up deficits has been authorized without any control from congress. The situation that is creating tension today on the currency market is clearly the American deficit. One has the feeling that interest rates will probably continue to rise slightly until his departure.” Greenspan is due to retire in January 2006.
As the Chinese yuan trading band widened from 1.5% to 3% as US Treasury paper came under pressure as traders surmised that the Bank of China would be buying less Treasury debt as part of its dollar intervention operations. There is no further need to buy dollars and Treasuries because the yuan is no longer based on the dollar. It is based on a basket of currencies. Program Trading accounts for 70.8% of NYSE volume. That is 1322.7 million shares daily. This has nothing to do with investment. The concept has turned the exchanges into gambling casinos. Its little wonder the average investor is out of the market. Brokerage firms executed an additional 839.4 million shares daily of program trading away from the NYSE, with 0.5% of the overall total on foreign markets.
The IMF says, “There is rising concern among the world’s economic leaders that financial market participants may be under-estimating economic risks and that implies that central banks will keep lifting interest rates for some time.” They should mention that to real estate investors.
The office of the Comptroller of the currency reports a net easing of retail underwriting standards and it warns that banks are overly concerned about fee generation and under concerned about loan quality. They just want to generate commissions without regard to profit and loss. Banks are concerned about renting money and not the repayment of principal. Alan Greenspan has fostered that mentality with his relentless credit creation and the perceived Greenspan put.
One of these days the denizens of the foreign exchange market are going to discover that the dollar and the American economy will not always be the logical repository of capital at the margin. The alternative, the euro, is facing a European recession, EU political problems, and political problems in Italy as well as Germany. That is all understandable, but the dollar’s problems are far greater.
August existing home sales rose 2%. Sales were up 7.8% from August 2004 and were the second highest on record. The median home sales price rose 15.8% to $220,000 year-on-year. Inventories of homes for sale rose 3.5% in August to a 4.7% month supply, the most plentiful month’s supply since November 2003.
On Monday, in spite of the Fed adding $10 billion in repurchase agreements and putting the repo pool at $94.830, the market struggled all day. Gold was hit in Europe and then in the US, but gold rebounded strongly for the day.
The World Bank’s policy-making committee has agreed to a global debt-relief proposal sought by the Group of 8. That will wipe out $55 billion in debt for 37 nations. Our experience having lived in a number of third world nations is that they‘ll run their debts up again. An unspoken part of the agreement is the privatization of utilities in all countries by US or European elitist companies.
The US is under growing pressure to cut farm subsidies as their latest meeting with three other trade powers ended in deadlock. There are only three months left to agree on a framework global trade treaty. There is a good chance the US will not bend. They think their tariffs of 12% are acceptable. In addition, there are other simmering issues between rich and poor countries. Brazil is seeking WTO sanctions against the US after the elitist US neocons failed to comply with a ruling ordering it to reform cotton subsidies. The EU has also angered Brazil, Thailand and Australia by announcing plans to dump its two million metric ton sugar surplus on world markets just before a ban on its sugar subsidies enters into force.
Shortages of building materials along the Gulf Coast will increase construction costs and support housing price gains if interest rates stay in their current mode. We believe they are headed higher. The experts expect the national median price for housing of all types to rise 10.8% this year. Over the past five years homes have risen in value by 53%.
Citizens for Responsibility and Ethics in Washington have listed the 13 most corrupt politicians in Washington. Leading the pack is Senate Majority Leader Bill Frist (R-TN) and House Majority whip Roy Blunt (R-MO). Then there are Representatives Richard Pombo (R-CA), Maxine Waters (D-CA) and Randy “Duke” Cunningham (R-CA). Then there are Senator Conrad Burns (R-MT) and Representatives Bob Ney (R-OH) and Tom Feeney (R-FL). William J. Jefferson and Cunningham are under federal investigation. The other three are Senator Rick Santorum (R-PA), Representatives Charles H. Taylor (R-NC) and Marilyn N. Musgrave (R-CO) and Rep. Rick Renzi (R-AZ). We are sure there are some subjective feelings being vented.
Do you want to read more by Bob Chapman? There are 87 previous issues for you to read.
Rogue
Some very,very interesting "tidbits" in this weekly wrapup....
Week in Review
10/1/2005
For the week 9/26-9/30
[Posted 7:00 AM ET]
Racism and Turkey
No, this isn’t out of order. One of the best programs on
television is HBO’s “Real Sports with Bryant Gumbel” and the
other night he did a segment on racism in European football
(soccer). I’ve watched countless contests in many a pub across
Europe but to be honest had never picked up on the extent of
racism that is on display at matches in the likes of Spain and
Italy. It’s ugly and worrisome for the future of the continent.
But for years now I’ve written on this topic in general, talking of
the rise of the far-right in nations like Austria and the
Netherlands, let alone the more obvious examples you see on a
fairly regular basis in Germany. Fascism itself is alive and well.
In the case of European football, though, it’s primarily the black
players who are targeted, while those from the Middle East get
their fair share of abuse as well. It’s so despicable I don’t even
want to describe the actions of the so-called fans. Football has
now become a sort of recruiting tool for many of the far-right
groups and they take over entire sections of a stadium. I can’t
imagine being a parent and even contemplating taking a child to
such an event.
I have a ton of European readers and I know that as soon as I
bring up a sensitive topic like this I probably lose more than a
few. Such is the life of a pundit and analyst of the world scene.
But where I’m heading with all this is the subject of Turkey and
its European Union membership talks that have been slated to
start this Monday, Oct. 3, since last December when the E.U.
agreed to keep Turkey’s hopes alive.
Suddenly this week, however, Austria demanded that Turkey be
granted a “privileged partnership” rather than full membership.
While the other 24 E.U. members maintain the talks should
go on, Austria can veto them. This is all taking place at the last
minute and picture that as many of you read this, Turkey’s
officials don’t even know whether they should show up Monday.
It’s humiliating and dangerous. You all know the arguments by
now. Many in Europe are scared that with the admission of
Turkey there will be a further surge in immigration. But you also
know that the only way Europe can survive, and pay out its
gigantic future pension and medical benefits, is to grow its
economy. But the populations in most of these same countries
are actually declining so they desperately need the immigrants
or Europe faces a social disaster of monumental proportions.
For Turkey not to be admitted to the final talks is a total
“betrayal,” as British Foreign Secretary Jack Straw has put it.
“Turkey would lose from a no decision, but Europe and its
people would lose even more” he added, concluding:
“Anchor Turkey in the West and we gain a beacon of democracy
and modernity, a country with a Muslim majority, which will be
a shining example across the whole of its neighboring region.”
Finally, I get a kick out of Europeans when they blast America.
Often we deserve it. I rail myself on the issue of how little our
people know about history and the pitiful education many of
America’s schoolchildren receive in this regard.
But at the same time, as I travel the world I keep coming back to
the fact America remains the best place on earth when it comes
to tolerance. We are far from perfect, but overall our attitudes on
race are superior to those elsewhere. It’s a lesson Europe should
take to heart……before it’s too late.
Wall Street
Oh yes we need a little Christmas…right this very minute…
candles in the window….
Bah humbug. You’d have to be an idiot not to know already it’s
going to be a lousy holiday season and there’s nothing we can do
about it. Forget the possibility that a foreign policy bummer
could dampen spirits, these days it’s about sliding consumer
confidence, increasing signs we are already reining in spending,
and, most importantly, energy. And forget all these projections
on this winter’s heating bill. They’re way off. Try doubling
them (unless you had the foresight to lock in lower prices). With
receipt of the first big bill in late-November / early-December, I
imagine there are going to be quite a few family conversations
like this one.
“Bobby, Jenny…your mother and I have some bad news.
Christmas is going to be a little less merry this year.”
“But (quiet sob) why, Daddy?”
“Because of this little piece of paper in my hand,” he says, teeth
clenched, blood pressure boiling.
I mean after all, do you realize natural gas averaged between
$4.50 and $5.00 for the period 2000-2004 and is now sitting at
$14?! Forget the cost of gasoline at the pump. At least you see
those numbers rise as you drive around all day, even if you aren’t
actually filling up. The shock is thus minimized. But not when
you receive that first heating bill this year. Expect a large
increase in cardiac incidents.
And knowing this, for the life of me I can’t understand why the
equity market is so sanguine. There is absolutely nothing good
to speak of on the foreign policy front (though hopefully we
catch a break in Iraq in two weeks), real estate, the piggybank of
choice, has peaked, and this little spurt in capital spending
will be short-lived.
And then there is the increasing chance the world financial
system suffers, shall we say, a little accident; like in the
International Swaps and Derivatives Association announcement
that the “notional” value of credit derivatives has soared 128% in
one year to $12.4 trillion. [Financial Times] As in while
notional value is a bit abstract and not necessarily representative
of true risk, we nonetheless need to be concerned that ‘trillion’
has a lot of zeroes in it and one should find this more than a bit
disconcerting. You think these guys and gals throwing this stuff
around the swaps desks all know what they’re doing? Of course
not.
Toss in the fact that a leading user of such instruments, Fannie
Mae, is still jerking regulators around when it comes to figuring
out their actual exposure and, heck, you’ll have to forgive me if I
seem particularly dour these days.
Street Bytes
--Well thank god there are irrational folks who actually play
Wall Street, because if it was up to me these days I’d obviously
sit on my hands, a large amount of cash in a coffee can by my
side, and watch the river flow or something. Alas, the major
averages had a solid week with the Dow Jones advancing 1.4%
to 10568, the S&P 500 tacking on 1.1% to 1228 and Nasdaq
climbing 1.7% to 2151. There was some talk that future earnings
will be just fine, though I would argue that the challenge of rising
energy and raw material prices can not be ignored. Let’s face it,
if I see strong earnings coming out of certain sectors over the
next few weeks I’m just not going to buy it. If you remember an
80s tune by the group The Go-Gos, “Our Lips Are Sealed,” just
re-title it “Our Books Are Sealed.”
--U.S. Treasury Yields
6-mo. 3.92% 2-yr. 4.17% 10-yr. 4.33% 30-yr. 4.57%
Suddenly, the yield curve is flattening again and to some market
participants that’s not good. A few inflation indicators have been
flashing warning signs (aside from energy) and the feeling for
the week was that the Fed has more than enough ammunition to
keep hiking rates, especially following a far stronger than
expected Chicago report on manufacturing. The fact that they’ll
then tank the economy appears not to concern them.
--Dr. Michael Economides of the University of Houston has been
bang on with his energy forecasts, a la Boone Pickens, and this
week he called for $20 natural gas this winter. Were that to
occur, Katy bar the door.
--When will the business press and Wall Street experts ever learn
that when it comes to hurricanes in the Gulf, my adage of waiting
24 hours rings truer than ever. Immediately everyone tries to
calculate the damage and then invariably gets it wrong. As Rita
was churning at CAT 5 status, I was watching the Weather
Channel when they reported one buoy had recorded a 31-foot
wave. I sent a note to Trader George, who’s in the energy
business, and we both immediately knew what that meant.
That’s at least one rig that got beat up.
As it turns out, Rita was the worst ever in terms of damage to
offshore rigs and now one side note is going to be the fact
insurance rates for any such exposure are heading up some
400%. Between Katrina and Rita, 11 refineries also remained
closed, though some of those will hopefully be restarting
operations soon.
--Europe is forecast to have a colder than normal winter and
there are already concerns of fuel shortages here, which means it
wouldn’t be able to send over any reserves to the U.S.
[However, as a junior meteorologist, normally we both don’t
have severe cold at the same time. Just the way the weather
patterns work, you understand. Then again, it often depends
what our friends in Canada feel like doing; which is also why the
U.S. needs to settle the lumber dispute between the two,
posthaste.]
--Fed Chairman Alan Greenspan warned again on “froth” in the
real estate market and he had words of caution on exotic
mortgages. But this is the same man who created the
environment in the first place so many of us have lost a bit of
respect for him as he fades into the sunset, bubble bath waiting.
--The economists at UCLA, who have become experts on the
California housing market (albeit too cautious, too early a la your
editor), now say the market here is 40-45% overvalued.
--As for the actual data on housing, nationwide, existing home
sales registered a surprising pop, up 2% for August, but new
home sales were down 9.9% and inventories continue to rise.
Bottom line, I still see ‘stagnation’ more than an actual popping
of the bubble, but just as in the case of Lawrence Welk at some
point the bubble machine will stop, at which time we’ll all look
around at our neighbors and go ……………..Sell!
--After his big victory in Japan’s parliamentary elections, Prime
Minister Koizumi gave a speech to the body that was all of 14
minutes and offered few details on his economic reform agenda
or key foreign policy issues such as China. It was kind of
strange. Otherwise, for every so-so indicator on the economy
these days, there seem to be two or three positive ones.
--Italy’s Prime Minister Berlusconi was unsuccessful in his
attempt to force the central bank chief, Antonio Fazio, to resign.
[Berlusconi can’t legally remove him.] It turns out Fazio has
been under investigation since August for favoring Italian
domestic banks over Dutch and Spanish ones in takeover bids,
but the prime minister is forced for the time being to move on.
--The trial of Italian dairy king Parmalat’s founder and 15 other
executives began this week and was then adjourned just a few
hours later to December. This is being closely watched on the
continent for it was Europe’s biggest corporate fraud, some $17
billion, and 11 executives have already been sentenced. Many
U.S. investment banks are also implicated for providing their
“expertise.”
--The world’s #1 natural gas producer, Gazprom, acquired
Russia’s #5 oil producer, Sibneft, for $13 billion as the Kremlin
continues to mold its energy business into a second OPEC,
thereby giving it the ability to wield the oil card at a moment’s
notice should it be in an ornery mood…as Poland has
undoubtedly taken note of.
--As a sign of Russia’s oil boom (60% of the market value of its
leading equity index is comprised of energy issues), in the first
half of 2005, 140 Bentleys were sold with an average sales price
of $264,000.
--Continuing with our periodic update on the two major oil
indices, the OSX and XOI….[The former for the service / driller
sector, the latter representing the major integrateds such as
Exxon Mobil.]
OSX…123 (12/31/04)….176 (9/30/05)
XOI….721 (12/31/04)…1076 (9/30/05)
--The Washington Post had a super editorial on federal spending,
post-Katrina, that requires quoting in some depth.
Referring to Louisiana’s demands:
“The state’s representatives have come up with a request for
$250 billion in federal reconstruction funds for Louisiana alone –
more than $50,000 per person in the state. This money would
come on top of payouts from businesses, national charities and
insurers. And it would come on top of the $62.3 billion that
Congress has already appropriated for emergency relief.
“Like looters who seize six televisions when their homes have
room for only two, the Louisiana legislators are out to grab more
federal cash than they could possibly spend usefully. For
example, their bill demands $7 billion for rebuilding evacuation
and energy supply routes, but it also demands a separate $5
billion for road building and makes no mention of the $3.1
billion already awarded to the state in the recent transportation
legislation. The bill demands $50 billion in community
development block grants, partly to get small businesses going,
but it also demands $150 million for a small-business loan fund
plus generous business tax breaks. The bill even asks for $35
million for seafood marketing and $25 million for a sugar-cane
research laboratory. This is the equivalent of New York
responding to the attacks on the World Trade Center by insisting
upon a federally financed stadium in Brooklyn.
“The Louisiana delegation has apparently devoted little thought
to the root causes of the Hurricane Katrina disaster. New
Orleans was flooded not because the Army Corps of Engineers
had insufficient money to build flood protections, but because its
money was allocated by a system of political patronage. The
smart response would be to insist that, in the future, no Corps
money be wasted on unworthy projects, but the Louisiana bill
instead creates a mechanism by which cost-benefit analysis can
be avoided. Equally, Katrina was devastating because ill-
conceived projects have drained coastal wetlands and caused
their erosion, destroying a natural buffer between hurricanes and
human settlements….Rather than grappling with the lessons of
Katrina, Louisiana’s representatives are demanding an
astonishing $40 billion worth of Corps of Engineers projects in
their state. That is 16 times more than the Corps says it would
need to protect New Orleans from a Category 5 hurricane.
“The Louisiana bill is so preposterous that its authors can’t
possibly expect it to pass; it’s just the first round in a process of
negotiation. But the risk is that the administration and
congressional leaders will accept the $250 billion as a starting
point, then declare a victory for fiscal sanity when they bring the
number down to, say, $150 billion.”
--According to the Washington Post, FEMA negotiated a deal for
three Carnival Cruise Lines ships for six months and $236
million, or twice the going rate if at full capacity. But to
compound things, Carnival, which is based in Miami but
incorporated in Panama, paid a mere $3 million in taxes on $1.95
billion in pretax income in 2004.
--The founder and CFO of hedge fund Bayou Group both
pleaded guilty to fraud. It turns out the fund never made money,
though clients received statements to the contrary. At least $100
million of $300 million may have been recovered so investors
could receive some recompense, assuming the attorneys don’t
take it all.
--The World Health Organization is estimating anywhere from 5
to 150 million around the world will die in the next pandemic,
likely as a result of bird flu once it mutates so that it can be
passed from one human to another; rather than the current
situation where those who have died appear to have had direct
contact with sick birds only. Regardless, take the low number.
That would still tank the global economy as travel and trade
froze up.
[For new readers, I have written countless pieces on this topic
going back years ago before the mainstream media picked up on
it. Now, however, as with any story of this kind it eventually
begins to write itself.]
--Scientists have concluded that SARS started with bats, which
doesn’t help bats’ image any. At first it was thought civet cats,
those nasty creatures, were responsible but noooo….turns out it
was the horseshoe bat, “a creature that is both eaten and used for
traditional medicine in China.” [Wall Street Journal] In other
words, the horseshoe bat is not necessarily good luck.
--Heart device maker Guidant faces a criminal investigation over
repeated failures with some of its products. What did the
company know and when did it know it?
--The Chinese government is establishing new restrictions in
posting news on the Net, including stories it says jeopardize state
security.
--Boeing settled with its machinists union…a good thing.
--Supposedly, Senate Majority Leader Bill Frist began discussing
his holdings in HCA stock with the Senate Ethics Committee
back in April, which if true buttresses his position that he was not
trading on inside information when he sold the position in June;
two weeks before the company issued an earnings warning.
Nonetheless, Frist and others who sold around the same time are
the targets of a formal SEC investigation and there is a damning
2003 interview with CNBC’s Allan Murray that in hindsight
makes Frist look like he’s full of it when it comes to the handling
of his blind trust.
--A few weeks ago I listed the World Bank’s top ten ‘easiest
countries to do business in’; #1 New Zealand, #2 Singapore, #3
U.S. ...
This week we have the World Economic Forum’s ‘most
competitive’ survey.
1. Finland
2. U.S.
3. Sweden
4. Denmark
5. Taiwan
6. Singapore
7. Iceland
8. Switzerland
9. Norway
10. Australia
Hmmm….detect a pattern?
I stumbled on this because I’ve been reading a fair amount on
Chile recently and they come in first for Latin America, #23
overall. [Though this week the U.S. ambassador there slammed
Chile for its lax intellectual property rights standards.]
--DaimlerChrysler is laying off 8,500 employees from its
Mercedes Car Group in Germany.
--Apple Computer admitted it had big problems with the screens
on its new iPod Nano. It seems they break rather easily.
--Eastman Kodak’s CEO said his company is “at the worst
possible place” in moving from traditional to digital photography
but, fear not, he added that by 2008 all will be well. That was
2008. In other words, this sad story continues and he’s lost
investors forever.
--So I’m perusing the Journal and saw some new kitchen
gadgets. I mean to tell you, looks like my brother may be getting
me the Egg & Muffin Toaster for Christmas. [Sorry to make it
public, bro, but it’s only $50.] Yes, this baby “toasts an English
muffin or bagel, cooks an egg and heats a sausage patty or other
breakfast meat in four minutes!” And it really, really works.
I also saw that Salton has updated the George Foreman grill; the
new “G5” with removable cooking plates that can be placed in
the dishwasher. Between these two contraptions, why would you
ever eat out again?
--Sports Illustrated is developing content for the mobile phone
market such as swimsuit video, including behind the scenes
footage. Ergo, if you thought drivers on their phone got
distracted before…
--The FTC has levied only four fines against telemarketers
despite the Do Not Call Registry. Personally, I’d like to see the
dirtballs who send unwanted faxes receive the, err, um, you
know….
--My portfolio: A funny thing happened on the way to the end of
the quarter. My carbon fiber play awoke with quite a start on
Thursday, and so despite giving some back on Friday I am
treating myself to premium beer this coming week. I’m also
suddenly about 30% equities, 70% cash; though I’d be the first
one to admit I probably have too much in this one stock.
[After the close on Friday the company announced it was
doubling production. Yes, I’ve been telling you about the
demand for this stuff. It’s real.]
Foreign Affairs
Iraq: We are just two weeks from a potentially titanic moment as
on Oct. 15, Iraqis vote to approve or reject the new constitution.
The two leading Shia clerics, al-Sistani and al-Hakim, have
endorsed it, while we all wait to see if the Sunnis can muster the
2/3s required in 3 of the 18 provinces to defeat the document.
What we do know is that despite al Qaeda’s #2 going down this
week, the violence continued in waves with not just 200+ Iraqi
citizens being killed, but also 13 U.S. soldiers in one four-day
stretch. By the Pentagon’s own statistics, for the period Jan. –
Aug. ’05, some 8,000 Iraqis died in 412 suicide attacks, 8 Xs
higher than a year ago, and this week a leading general on the
scene told Congress that only one Iraqi battalion (about 600 men)
is capable of operating on its own.
But for now it’s all about 10/15. Success or failure for the entire
mission may quickly come into focus on that date.
Iran: The good news is the 35-member board of the International
Atomic Energy Agency voted to approve a resolution putting the
onus on Iran to shape up or risk being reported to the Security
Council. Now before you laugh, this was one moment where
diplomacy carried the day for the U.S. India was slated to
abstain, alongside Russia and China, but opted to side with the
Americans. The final vote was 22 ‘for,’ 12 abstentions, and one
‘no,’ Venezuela.
But, of course, the reality is Russia and China would exercise
their veto in the Security Council should the issue of Iran’s non-
compliance with the Nuclear Non-Proliferation Treaty ever come
to a head. So where are we after all these years? Nowhere. The
IAEA’s Mohamad ElBaradei, who acts like Mr. Magoo as reader
Scott P. so aptly puts it, is of no help and I remain convinced Iran
is much further along in building the bomb than the so-called
experts say it is.
North Korea: As President Bush has been distracted by Katrina
and Rita, it’s become increasingly clear the administration
simply caved in to China as Beijing took charge of the six-party
talks on Pyongyang’s nuclear weapons program. Further
discussions on the agreement in principle are slated for
November, but pre-Katrina the U.S. would never have given in to
the North’s demand for a light-water reactor before it dismantled
its weapons. With China and South Korea opting for this path,
however, it’s as if the White House, suffering from a severe case
of battle fatigue, has merely shrugged its shoulders and said
“whatever.”
In the end, though, there is no way Kim Jong-il gets the reactor
without first giving up his stash, at least one would hope so, but
you never know these days where the Bush administration’s head
is at. Inconsistency has become its hallmark, and that’s
dangerous for the entire free world.
Israel: In a critical Likud Party vote, Prime Minister Sharon beat
back challenger Benjamin Netanyahu, 52-48, in Netanyahu’s
attempt to force early party elections this fall instead of the
scheduled April date. So Sharon at least won a few more months
while Netanyahu keeps up his challenge on Sharon’s withdrawal
from Gaza, which Bibi says is now a “Hamas state.” But there is
a chance Sharon bolts Likud, anyway, to form a new party,
seeing as it’s pretty poor he has to deal with such grief from his
own so-called supporters.
Meanwhile, Israel retaliated against Hamas for the latter’s recent
rocket attacks, 100s of militants were rounded up, and Hamas
announced a ceasefire. Most importantly, as I wrote would
happen a few weeks ago, the international community this time
was quiet when Israel used force because Sharon’s courageous
move to exit Gaza won him plaudits around the world. The onus
is now on the Palestinians. Put up or shut up.
Syria: Arab leaders have been rallying to lend their support to
President Bashar Assad, however, in the face of the UN probe
into the assassination of former Lebanese Prime Minister Rafik
Hariri. Assad’s regime is in big trouble and the UN’s findings
are slated to be released on Oct. 25, at which point we learn just
how high up it believes the plot went.
But Defense News offered some food for thought. There is no
clear alternative to Assad, not even anyone in exile. So if Assad
is forced out is that necessarily good? The situation on the Syria
/ Iraq border could easily get worse, for example, and terrorists
could suddenly decide they have free rein in the area of the
Golan Heights, which heretofore has been quiet.
China: For the first time since Tiananmen in 1989, the
communists have allowed pro-democracy politicians from Hong
Kong onto the mainland; including Martin Lee, a man once
branded a “traitor” by Beijing.
But over on Taiwan, President Chen Shui-bian mused he was
confident the U.S. would prevent China from annexing Taiwan.
Don’t count on it. Aside from the fact the White House is
distracted, this is where I’m increasingly convinced China will
wield the currency card. We always wonder what China will do
with its huge dollar reserves in the event of a crisis. I believe
China could simply threaten to invade Taiwan, telling the U.S.
‘If you interfere we’ll send your dollar and bond markets into a
tailspin.’ Under that scenario (one I first spelled out years ago)
China would be more than willing to accept some short-term
pain in its own economy for long-term gain; plus, any domestic
unrest on the mainland should be outweighed by the nationalistic
fervor that would sweep the country as a result of regaining
Formosa. I assume our leaders in Washington have thought
about this as well.
Poland: The Center Right coalition was successful in capturing
parliament, though the two parties differ on tax policy; one wants
a flat tax, the other doesn’t. One also wants to speed up the
process of privatization, the other doesn’t. So there are some
rather major issues for the two to break bread on. The other big
items of discussion in Poland these days concern Russia’s
domination of the energy supply, neighbor Belarus and 18%
unemployment. A presidential election is being held Oct. 9.
Venezuela: President Hugo Chavez told Newsweek’s /
Washington Post’s Lally Weymouth the U.S. “used chemical
weapons in Iraq.” The Post’s Jackson Diehl noted in an op-ed
that what is so worrisome these days is the fact Latin America’s
moderates are afraid to stand up to Chavez, as the president of
the Castro fan club buys support with oil. Yet despite
Venezuela’s vast energy wealth, extreme poverty in the nation
(defined as living on $2 a day) has risen from 43% to 53% since
Chavez has been in power.
Russia: Back when former Yukos chairman Mikhail
Khodorkovsky first filed his appeal on his trumped up conviction
for tax evasion, President Bush said he would monitor the
process. Well, as we saw following the super-quick denial of the
appeal, Bush then said nothing. You could say Khodorkovsky
was yet another victim of Katrina.
This week, one of Mr. K’s lawyers, a Canadian / U.S. citizen by
the name of Robert Amsterdam, was given 24 hours to leave the
country after five goons came to his hotel room in the middle of
the night. [He was treated well, at least.] Then prosecutors said
three other Russian lawyers representing Khodorkovsky should
be disbarred.
Separately, President Vladimir Putin told a call-in show audience
that he would not seek a 3rd term which would require a change
to the constitution. I still maintain he will, citing national
security.
Algeria: The nation voted in a referendum on a peace plan of
national reconciliation, one that pardons those Islamists not
involved in rape and mass killings resulting from the civil war
that claimed 150,000 lives since an election debacle in 1992.
The government, though, announced 97% approved of the deal
with a 82% turnout; far greater figures in both instances than
commonly believed beforehand. It’s seemingly impossible to
have such a result in a nation where many are unwilling to just
bury the past.
Northern Ireland: The IRA, working through the
decommissioning process, destroyed its weapons, including
grenades, flame throwers and surface-to-air missiles. That’s
right, SAMs. Well, you can imagine the Rev. Ian Paisley railed
against the apparent lack of details as it’s not as if there was film
of the act and the two members of the clergy who observed the
scene were handpicked by the IRA. [A Canadian general also
oversaw the whole effort.] And no doubt many smaller arms
were kept to carry out assassinations and revenge killings.
But nevertheless it’s a positive step and British Prime Minister
Tony Blair hailed the decommissioning and called for the
restoration of the local assembly for the province that has been
suspended since 2002.
Britain: Speaking of Blair, he told a Labour Party conference he
would serve out his term, and for the sake of like-thinking
Americans I hope he does. It was also interesting that Blair
singled out the UK’s lax focus on dealing with petty crime. It’s
the James Q. Wilson broken glass theory, put into practice so
effectively by Rudy Giuliani and William Bratton in New York.
Australia: Prime Minister John Howard approved the adoption of
sweeping new anti-terror laws that allows officials to hold
suspects without charge for 14 days. Another great ally.
Random Musings
--President Bush received some good news this week in the form
of a new USA Today / CNN / Gallup poll that shows he regained
5% in his approval rating, from 40 to 45% following Hurricane
Rita. 71% thought he handled this one well. I have to admit I’m
surprised, though it’s not realistic for the White House to think it
can get back above 50% anytime soon, the country being divided
as it is. [Iraq’s referendum will be critical in this respect.]
The nomination of Judge John Roberts, a real positive, came
after the polling, though the next selection for the High Court
will obviously be far tougher with both sides spoiling for a fight
to re-solidify their bases.
As for Tom DeLay, indicted, and Bill Frist, under investigation, I
said the following in this space over the past few years.
4/23/05: “Republicans need to ask themselves one simple
question when it comes to Tom DeLay. ‘Is this the face of the
party we want going into 2006 and the critical mid-term
elections?’ Not for me.”
12/13/03: “I can’t believe how many pundits seem to think
Republican Senate Majority Leader Bill Frist is presidential
timbre in 2008. You’ve got to be kidding me. He’s been
worthless.”
So despite a tick up in the polls, President Bush is still
struggling. Washington Post columnist Jim Hoagland summed it
up thusly.
“Bush’s floundering since he was caught off base and off guard
by Hurricane Katrina strips the veil from a broad pattern of
recurrent inattention to the duties of governance, of misplaced
loyalty to incompetent subordinates, and a crippling refusal to
look back at and learn from mistakes.
“I take no pleasure from that harsh assessment. I have never
shared the unreasoning conviction of many of his more partisan
opponents that Bush as a national leader is illegitimate, moronic
or both. He isn’t.
“Add this sobering reality: We have three years and change left
on Bush’s second mandate. He has undertaken a vital effort to
establish a new and badly needed foundation for U.S. policy and
the U.S. presence in the Middle East. Hurrying him into lame-
duck, dead-end status ahead of his time will undermine that
effort and harm the nation in other ways.
“But in the American system, only Bush can prevent that from
happening once confidence has been shaken in presidential
leadership as severely as it has been over the past five months. It
is up to Bush to prevent the breaking of his presidency.”
--The Times-Picayune newspaper of New Orleans is leading the
drive to have a reappraisal of the press coverage in the days
following Katrina, citing gross exaggerations of the facts.
Hey, guys, the facts are people did die at both the Superdome
and Convention Center, women were raped, and gangs armed to
the hilt roved the streets. Neither Fox, NBC nor CNN (the three
I watched) exaggerated, as far as I could tell, while obviously, in
hindsight, now former Police Superintendent Eddie Compass and
Mayor Ray Nagin did.
May I suggest that the Times-Picayune has a rather vested
interest in white-washing New Orleans. Let’s say only half the
inhabitants opted to come back. Do you think the Times-
Picayune’s ad revenues would plummet? Do you think jobs
would be lost?
New Orleans was a cesspool of crime and corruption before
Katrina, and as we saw vividly displayed on our television
screens in the days following the storm, nothing transpired to
make me believe otherwise. My hats off to the major networks
for their generally superb coverage.
But I will return to the Big Easy one day….as in a day trip to the
D-Day Museum; then I’m out of there. Don’t want mold
growing on my laptop.
--The oil and petroleum spills from Katrina rival those of the
1989 Exxon Valdez disaster. Rita only added to the problem.
The Bayou is an environmental nightmare of staggering
proportions and we won’t know the full extent of the damage for
years to come.
--The Justice Department announced that since 1993, violent
crime in America is down 57%.
--Pfc Lynndie England was convicted and sentenced to three
years in prison for her role in the Abu Ghraib prisoner abuse
case.
--Once again, as victims of Katrina and Rita line up for their
benefits, I’m reminded of how the good folks of Oklahoma City
were ignored, with victims’ families receiving virtually nothing.
It’s a disgrace and a blot on our nation’s history.
--New Jersey Senator Jon Corzine, now candidate for governor,
has donated or lent black churches in New Jersey a staggering
$2.7 million over the past year, according to the Star-Ledger. Do
you think he’s going to win their endorsement?
--Leo Sternbach died. He was the inventor of Valium and other
medications during a six-decade career with Roche. Yes, Valium
…. “Mother’s Little Helper” as the Rolling Stones’ song went.
--Researchers have caught gorillas for the first time on film using
tools. Heretofore, only chimps and orangutans did. Personally,
I’m thinking the gorillas decided “What do we do next to obtain
better digs for our friends in the zoos?” “How about faking the
use of tools? It worked for the chimps.” “Bingo.”
--You know, in a world bereft of good news, the story of the
Japanese scientists who captured the giant squid, architeuthis,
also on film for the first time ever, and in 3,000 feet of water, is
really spectacular and, as my brother and I agreed, way cool. But
if you think I’m ever going to take another step in the ocean,
you’re wrong.
---
Pray for the men and women of our armed forces.
God bless America.
---
Gold closed at $471…another 17-year high this week
Oil, $66.24…10th week in a row closing above $60
Returns for the week 9/26-9/30
Dow Jones +1.4% [10568]…Q3…+2.9%
S&P 500 +1.1% [1228]…Q3…+3.2%
S&P MidCap +2.2%
Russell 2000 +1.9%
Nasdaq +1.7% [2151]…Q3…+4.6%
Returns for the period 1/1/05-9/30/05
Dow Jones -2.0%
S&P 500 +1.4%
S&P MidCap +8.0%
Russell 2000 +2.5%
Nasdaq -1.1%
*One quarter to go….my forecast for 2005 was for the major
averages to be down 5% and for the 10-year Treasury to finish
with a yield of 4.30%. I wish I could declare victory right now
and go home.
Bulls 53.2
Bears 26.6 [Source: Chartcraft / Investors Intelligence]
Have a great week. I appreciate your support.
Brian Trumbore
Rogue
The Peak Oil Crisis: Congressman Bartlett's Conference
By Tom Whipple
September 29 - October 5, 2005 VOL. XV
Of the 535 members of Congress, it seems that only one, Roscoe Bartlett of western Maryland , fully appreciates the nature and seriousness of the impending peak oil crisis. Bartlett has given a series of speeches on the House floor outlining the problems ahead and scheduled a meeting to discuss peak oil face-to-face with President Bush. On Monday, he participated in an energy conference in Frederick , MD organized by his office.
As the only peak oil Congressman— the rest presumably remember what happened to Jimmy Carter— Bartlett was able to attract an all-star panel consisting of: Kenneth Deffeyes, the geologist who reworked the original Hubbert calculations to determine that peak oil will occur on Thanksgiving Day 2005; Matthew Simmons, the Houston banker who recently published a book concluding that Saudi oil production has, or is about to peak: and Richard Heinberg, who has written extensively on life after oil depletion starts. Another set of panelists talked about actions we can take to soften the impending crash. A transcript of the proceedings will be available on the Congressman's web site.
For those familiar with the tenets of peak oil, the message was familiar: It will start soon; it is already too late to mitigate the effects; and a global economic depression will only be one of the many hardships the world will face.
On a humorous note, Deffeyes revealed that calculations that oil production would peak on Thanksgiving Day 2005 really had some wriggle room so that the appointed day could come as much as three weeks before or after Thanksgiving. On a more somber note, Deffeyes said there is bound to be some sort of oil rationing
Simmons characterized the present situation as the culmination of 50 years of energy planning mistakes. Only a few years ago, energy planners believed demand would peak, supply would grow, and oil would be cheap. But instead, demand grew, production costs doubled, there were few new discoveries, and reserves turned out to have been overstated.
All this led to a situation where by August 2005 spare capacity had dropped to the point that the world was effectively at 100 percent of production capacity. Then came the Hurricanes taking away more production capacity than was left to offset the damage. We do not yet know the full implications of this situation.
Simmons calls for the nation to go immediately onto an "energy war" footing, where productive capacity and the ingenuity of the country is mobilized to deal with the crisis.
Heinberg now believes peak oil may look more like a bumpy plateau with much volatility in prices and production with events such a hurricanes, wars, demand destruction, and political moves alternately cutting and stimulating additional production. As do the other panelists, he foresees major problems in the global economy, transportation, food production, and resource wars. He emphasized the impact on localities, as people struggle to get to work, feed themselves and heat their homes.
The next panel discussed ways to save energy in transportation, buildings and industry. The dominant theme was that our current machinery and practices are highly wasteful and that we have the existing technology to live on only a small fraction of our current consumption, such as 100-mpg cars and buildings that get by nicely on 20 percent of current energy consumption.
The key point made during the panel discussions was that the nation's goal has got to be movement towards 100 percent renewable energy: water, solar, wind, waves, biomass etc. As the US currently gets only seven percent of its energy from these sources, the idea of nearly all energy coming from renewables is often derided as an impossible dream. The point the panel made is that within a few decades, we will have no other choice.
One interesting note came during the questioning, when a member of the audience asked Congressman Bartlett about his meeting on peak oil with President Bush. Did the President understand?
Bartlett responded "Yes, the President understands" but it is the age-old problem of the urgent vs. the important. Apparently, the President believed that as of this summer he had more pressing issues to deal with than the possibility the world's oil supply would one day start to decline.
On Monday, however, the President issued a call for Americans to conserve gas by driving less and directed all federal agencies to cut gasoline consumption. This is a major change in the administration's position for many years has emphasizing production of additional oil over conservation and alternative energy.
It is beginning to sound as if the President knows the hurricane damage to offshore production is far more serious than has been generally reported, and that it may be a while before all the Gulf refineries are back in production. If this is indeed the case, higher prices and gas lines (rationing by inconvenience) are not far ahead.
Rogue
America's nightmare: Becoming Britain
By Jim Lobe
Global Economy
Oct 1, 2005
WASHINGTON - A combination of huge tax cuts, an insatiable appetite for foreign imports, especially oil, and record government spending is steadily eroding US independence and freedom of action, according to a "special report" released Thursday by the influential Council on Foreign Relations (CFR).
The report by Prof Menzie Chinn, a former senior economist for international financial issues on the White House's Council of Economic Advisers under both Presidents Bill Clinton and George W Bush, argues that the federal budget and current account deficits, which have deepened considerably over the last several
years, increasingly threaten US sovereignty and influence. "Failure to take the initiative to reduce the twin deficits will cede to foreign governments increasing influence over the nation's fate," according to Chinn's report. "Perhaps equally alarming, it will lead to slower growth, escalating trade friction, and reduced American influence in political and economic spheres."
The report, entitled "Getting Serious About the Twin Deficits" calls for urgent measures to tackle serious challenges faced by the US economy, including reducing the government deficit by, among other steps, increasing taxes; reducing oil imports through the imposition of energy taxes or strict fuel efficiency standards; and managing a coordinated depreciation of the dollar vis-a-vis East Asian currencies.
It called the recent Chinese decision to let the yuan fluctuate in line with a basket of currencies was a "step in the right direction", but still insufficient to overcome current imbalances. "The worrying alternative to a modest and coordinated dollar depreciation now," according to Chinn, "is investor panic and a major dollar collapse down the road."
The report, the first in a new CFR series on "The Future of American Competitiveness", is implicitly highly critical of the tax-cutting and free-spending policies pursued by the Bush administration that have, along with increased post-September 11 military spending, wiped out the budget surpluses built up during the Clinton era, creating record deficits in their place.
Chinn's critique is not particularly new. The International Monetary Fund (IMF) voiced similar concerns at its annual meeting just last weekend, and fiscal conservatives within the Republican Party have displayed growing anxiety about the dollar's fate, particularly in the aftermath of Katrina. The CFR stressed that the new study represented Chinn's personal views only and not those of the organization. But the fact that the New York-based think tank, which has been seen since its creation shortly after World War II as the foreign policy bastion of US-based multinational corporate interests, commissioned and released the report is likely to be taken as a signal of Wall Street's growing unhappiness with Republican rule.
Moreover, the fact that the study is framed by the author's concerns over the future of US sovereignty and its global influence is particularly cutting, since the "bring-it-on" swagger of Bush's foreign policy has been based on the notion that US power should be unconstrained by traditional alliances, multilateral institutions, or even international law. While the report does not explicitly address foreign policy, its argument that Washington's twin deficits are increasing the power of its foreign creditors to influence what the US will and will not be able to do appears designed to suggest to its readers that Bush's pose and global ambitions are becoming ever more hollow.
The dangers of a dollar collapse and an economic recession, according to the study, have become more acute as a result of Hurricane Katrina, the recovery from which may cost the government as much as US$200 billion. Some economists have also predicted that the storm could reduce the rate of economic growth by as much as 0.5% for the year. Coupled with the combination of record oil prices and US dependence on imported oil, the pressure on the dollar grows ever stronger.
But even if a sudden collapse is avoided, the country's descent into ever greater indebtedness threatens an important source of its global influence - the dollar's role as the world's most important currency. "A cautionary note regarding America's current path is provided by Britain's loss of military and political primacy in the 20th century; that development followed a shift from creditor to debtor status," according to Chinn. "Similarly, a prolonged decline in the dollar's value and increasing indebtedness will erode America's dominance in political and security spheres."
The current account deficit has soared from just under 3.8% of gross domestic product (GDP) in 2001 to 5.7% last year. While other countries have historically experienced such large deficits, the huge weight of the US economy - which accounts for more than a quarter of global GDP - is unprecedented, according to the study. What makes matters worse is that the US has accumulated a record amount of foreign debt at the same time, borrowing particularly heavily from Japan and China. In fact, a majority of federal debt is now held by foreign governments and investors, having doubled to $2 trillion over the five-year life of the Bush administration.
These trends, moreover, show no sign of being reversed, according to Chinn. According to the study, the current account deficit is being driven mostly by the fiscal deficits that have been run up by Bush and the Congress since 2001 in tax cuts and spending increases. A second factor is the dependence of the US on foreign oil. Indeed, oil imports account for 40% of the increase in the trade deficit over the past three years.
A third factor, according to Chinn, is the undervaluation of East Asian currencies, which makes Asian exports more attractive to US consumers, further tilting the trade balance against the US. As a result of these deficits, the US faces several worrying outcomes. The most likely result is that foreign governments and private investors, confronted with a seemingly endless vista of US budget deficits, will stop buying US debt. Borrowing costs for the US Treasury would then rise steeply, spurring a corresponding plunge in the dollar, resulting in a dramatic slowdown of the economy.
To address these threats, the report calls for a number of measures that will be very difficult for the administration to stomach. In particular, it calls for Bush to give up on making permanent the tax cuts of 2001 and 2003 and impose taxes on fossil fuels and/or meaningful fuel-efficiency standards to reduce consumption - steps the administration has so far steadfastly resisted. The study also called for eliminating the most costly provisions of the recently approved energy and transportation bills, which, according to critics, are laden with "pork" - that is, pet projects or other benefits that lawmakers take home to their constituencies or financial backers.
(Inter Press Service)
Rogue
ARTX news.....
Arotech Secures $17.5 Million Convertible Debt Financing and Revamps Operations to Focus on Organic Growth and GAAP Profitability
Friday September 30, 8:45 am ET
AUBURN, Alabama--(BUSINESS WIRE)--Sept. 30, 2005--Arotech Corporation
Proceeds to complete FAAC earnout payment; balance for working capital
Company commits to cost-cutting, consolidations, and focus on operations and profits
Arotech Corporation (NasdaqNM: ARTX - News) announced today that it has sold to certain existing institutional investors in a private placement an aggregate of $17.5 million principal amount of senior secured notes, convertible to common stock at $1.00 per share (a 26% premium to the current trading price). Arotech used approximately $5.4 million of the net proceeds of the financing to complete the outstanding earnout payment for the acquisition of Arotech's FAAC subsidiary such that the former FAAC shareholders will not sell more shares of the Arotech stock issued to them as payment for the earnout. As a result, these shares will be withdrawn from Arotech's float and canceled, and the registration statement in respect of such shares filed with the SEC will be withdrawn. The balance of the proceeds after expenses (including a 5% placement fee) will be used to restore cash used during the year, part of which was invested in Arotech's Armour of America, AoA subsidiary, and to increase working capital.
Arotech expects that the proceeds will permit it to continue to grow its businesses organically without a need to raise additional capital. At this time, Arotech does not intend to pursue further acquisitions. Rather, Arotech will focus on achieving sustainable profitable growth through its existing operations.
Arotech also announced that it is vigorously cutting operating costs as part of its strategy to achieve and maintain net profitability. Arotech will consolidate certain of its subsidiaries, shift personnel, and reassign responsibilities in order to reduce operating expenses and maximize available resources. Additionally, Arotech is sharply cutting costs from its corporate budget. It has substantially reduced senior employee salaries, cut directors' fees, and taken a variety of other measures to limit spending. Arotech will continue to assess its internal processes to seek additional cost-structure improvements.
"The organic growth of the Company is now our key focus and we are determined to achieve GAAP profitability through our existing operations," said Robert S. Ehrlich, Chairman and CEO, Arotech Corporation. "We now have a solid base of companies and product lines and are demanding excellence from each and every part of our operations. We will require all of them to contribute to profitability, and we will take whatever steps are necessary to achieve it. Meanwhile, although we had hoped not to have to return to the capital market, the new financing, with a conversion price substantially above market, is an endorsement of our investors' confidence in our ability to meet these goals.
"We have built a portfolio of leading-edge products primarily through acquisitions. Most of those acquisitions have been successful, with growing orders and revenues. Our main disappointment has been AoA, which has not performed as expected and has instead been a significant drag on earnings. The new financing will enable us to restore the cash invested in AoA and focus on enhancing the performance of our existing AoA product lines and realizing the significant opportunities that they present. We have installed new management and will work to turn around this subsidiary.
"Our mobile simulation training subsidiary, FAAC, on the other hand, has been performing exceptionally well. In connection with our acquisition of FAAC, we had agreed to pay the former owners a significant earnout if the company performed as well as it has. With the new financing, we will now pay the earnout with cash, instead of through additional sales of our stock. We are hopeful that this will reduce the pressure that we believe these stock sales have exerted on our share price.
"With the working capital from the financing and the streamlining and cost-cutting measures we are putting in place, we believe that we can grow our existing product portfolio, increase market share, and achieve profitability."
About the Secured Convertible Notes
The notes issued in the private placement are convertible at the investors' option at a fixed conversion price of $1.00, a 26% premium to the closing price of the common stock on September 28, 2005. The notes have a final maturity date of March 31, 2008 and bear interest at a rate equal to six month LIBOR plus 6% per annum, subject to a floor of 10% and a cap of 12.5%. The notes are secured by a security interest in the stock and assets of certain of Arotech's subsidiaries. Arotech will repay the principal amount of the notes over the next two and a half years, with the principal amount being amortized in twelve payments payable at Arotech's option in cash and/or stock, provided certain conditions are met. In the event Arotech elects to make such payments in stock, the price used to determine the number of shares to be issued will be calculated using an 8% discount to the average trading price of Arotech's common stock during 17 of the 20 consecutive trading days ending two days before the payment date; Arotech will, as required under Nasdaq rules, solicit the approval of its stockholders to such stock payments at a special meeting of its stockholders to be held before the end of 2005. At the closing, Arotech used $2.6 million of the proceeds to purchase a letter of credit securing Arotech's obligation for future interest payments on the notes. In addition, the investors received one year warrants, which are not exercisable for the six month period following closing, to purchase up to 5,250,000 shares of common stock (30% warrant coverage) at an exercise price of $1.10 per share.
None of the notes, the warrants and the shares of common stock underlying the notes and the warrant has been registered under the Securities Act of 1933, as amended, and they may not be offered or sold in the United States absent registration under the Securities Act and applicable state securities laws or an applicable exemption from those registration requirements. Arotech has agreed to file a registration statement covering the shares of common stock underlying the notes and the warrants within 30 days.
Nasdaq Notification
Arotech also announced that on September 27, 2005, it received notice from The Nasdaq Stock Market, Inc. ("Nasdaq") that the minimum bid price of its common stock had fallen below $1.00 for 30 consecutive business days and that it was therefore not in compliance with Nasdaq Marketplace Rule 4450(a)(5).
In accordance with Section 4450(e)(2) of the Nasdaq Marketplace Rules, Arotech has until March 27, 2006 (180 calendar days from September 27, 2005) to regain compliance. No assurance can be given that Arotech will regain compliance during that period.
Arotech can regain compliance with the minimum bid price rule if the bid price of its common stock closes at $1.00 or higher for a minimum of 10 consecutive business days during the initial 180-day period, although Nasdaq may, in its discretion, require Arotech to maintain a bid price of at least $1.00 per share for a period in excess of ten consecutive business days (but generally no more than 20 consecutive business days) before determining that it has demonstrated the ability to maintain long-term compliance. If compliance is not achieved by March 27, 2006, Arotech will be eligible for another 180-day compliance period (until September 23, 2006) if it meets the Nasdaq SmallCap Market initial listing criteria as set forth in Nasdaq Marketplace Rule 4310(c), other than the minimum bid price requirement. No assurance can be given that Arotech will regain compliance during the initial 180-day compliance period or that it will be eligible for the additional 180-day compliance period or, if applicable, that it will regain compliance during any additional compliance period. If Arotech is not eligible for an additional compliance period, or does not regain compliance during any additional compliance period, Nasdaq will provide written notice to it that its securities will be delisted. At such time, Arotech would be able to appeal the delisting determination to a Nasdaq Listing Qualifications Panel.
About Arotech Corporation
Arotech Corporation is a leading provider of quality defense and security products for the military, law enforcement and homeland security markets, including multimedia interactive simulators/trainers, lightweight armoring and advanced zinc-air and lithium batteries and chargers. Arotech operates through three major business divisions: Armor, Simulation and Security and Batteries and Power Systems.
Arotech is incorporated in Delaware, with corporate offices in Auburn, Alabama and research, development and production subsidiaries in Alabama, Colorado, Michigan, California and Israel.
Except for the historical information herein, the matters discussed in this news release include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, such as our ability to achieve or maintain net profitability. Forward-looking statements reflect management's current knowledge, assumptions, judgment and expectations regarding future performance or events. Although management believes that the expectations reflected in such statements are reasonable, readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties that may cause actual results to vary materially. These risks and uncertainties include, but are not limited to, risks relating to: product and technology development; the uncertainty of the market for Arotech's products; changing economic conditions; delay, cancellation or non-renewal, in whole or in part, of contracts or of purchase orders; Arotech's ability to remain listed on the Nasdaq Stock Market in accordance with the Nasdaq's $1.00 minimum bid price and other continued listing standards; dilution resulting from issuances of Arotech's common stock upon conversion or payment of its outstanding convertible debt, which would be increasingly dilutive if and to the extent that the market price of Arotech's stock decreases; and other risk factors detailed in Arotech's most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2004, as amended, and other filings with the Securities and Exchange Commission. Arotech assumes no obligation to update the information in this release. Reference to the Company's website above does not constitute incorporation of any of the information thereon into this press release.
--------------------------------------------------------------------------------
Contact:
Arotech Corporation
Kim Kelly, 1-866-317-4677
kim@arotech.com
www.arotech.com
Rogue
SOME ENERGY FACTS
Take a gander at these incontrovertible facts about energy demand and supply, and then tell me your brain has NOT shut down into a stupefying coma:
1) The U.S. burns 10 billion gallons of gasoline every 25 days, which accounts for 25% of world oil use.
2) That's 23 million barrels a day more than China, Japan, Russia, Germany and Canada combined.
3) We burn 23 trillion cubic feet of natural gas in the U.S., going to 31 trillion cubic feet per year by 2025, while we are producing 1%-2% LESS each year.
4) The world has 6.3 billion people and the population is growing at a 1.3% rate, BUT the world has 775 million vehicles and every year that number grows by 6%.
5) In the U.S. we have 745 vehicles per 1,000 inhabitants
6) China has THREE vehicles per 1,000 people, and India has one vehicle per 1,000 inhabitants.
7) The world creates 112,190 new vehicles each DAY, and China adds 2.5 million cars per year that burn an average of 5.96 barrels of oil per year.
8) If China gets to the U.S. rate of car ownership, they will have 1.1 billion cars.
9) Oh yeah, the population of India will surpass China by 2030.
10) When China gets to five cars per 1,000 people, they will have to DOUBLE the oil they have to import to 10 million barrels a day.
Rogue
SSKILLZ!.....It's ROGUEDOLPHIN!!!! Not ROUGEDOLPHIN.....
Rogue
Digitech....NLG/CHAR. I support you fully. I have seen the massive insider trading reported at the recent highs....only to see the stock collapse on a "take-under".
Those insiders took several thousand dollars out of my pocket and many others with there "brilliant" sales of millions of shares at the top. I'm not a happy camper either.
This has SCANDAL written all over it!!!!
Hopefully we'll get over $3 per share before this "take-under" is over.
Otherwise they should join Martha!
Rogue
FPP/Louis Navallier....Too bad he wasn't as smart as the guy from Raging Bull Microcaps Forum that was recommending the stock when it was trading for .63 cents a year or so ago.
Thanks to that "brilliant" analyst (can't remember exactly who...was it RRainman?) I was able to quietly accumalate five thousand shares for less than .70 cents. The last of my shares were sold at $3 and change.
I guess I exited the party way too early? Are we going to go parabolic here??
Rogue
Len...this will make you smile.
A friend's 15 year old daughter has a huge tattoo on her lower back (looks like giant eagle wings or something....very ugly!)that she proudly displays with her low "hip hugger" jeans and short tops. She also has a pierced tongue and a pierced belly button.
Her "idol" is Paris Hilton. Don't you wish that was your daughter????????.....LOL!!!!!
Rogue
Ander/ S&P 100 charts.......Thanks. I bookmarked that page and will try to make a daily habit to scroll through for swingtrade oppurtunities from those charts.
I presume the charts will update automatically every day?
Rogue
NLG...trading at $2.68 Canadien. I believe it's "in play" and may get a better bid.
Looking for a place to buy another chunk of shares here...I think we can get a bid above $3.00 if the Chinese take a look. They took PKZ....Nelson would be a good fit. Better NLG than worthless US dollars!!! LOL!!
Rogue
cliffvb/CHAR....Anyone please tell me if I'm wrong. But if Lukoil does "takeunder" NLG.to (not a done deal yet in my opinion/better bid?).....won't Lukoil already own a majority of CHAR??
They could announce a "takeunder" for any price they want......am I right? Who could argue...they would control the majority of CHAR shares.
Anyone please correct me on that. I think we may see a better bid for NLG. It's trading for more than the announced "take-under" right now at $2.70 Canadien.
NLG has had some really promising young fields according to some and Lukoil is trying to steal the company here. If they do....they'll probably steal CHAR too.
Rogue
Researcher/NLG.to.... I remember well your earlier post about NLR.to being "overvalued".
I still had accumalated NLG thinking "takeover" coming soon on their assets and majority" interest" in CHAR. Well... I was right but barely broke even on this! I think a better bid may be announced....I'm holding NLG.To.
See the bidding action for DCE.to ....Deer Creek Energy. Will we hear from our Chinese friends????? Better bid is possible in my opinion?
Not sure how Lukoil would treat minority CHAR shareholders.....I'm not adding yet to Char. What is the average 365 day price for CHAR??? Would they be so brazen? They DO have majority control if deal goes thru!
Watch out below....they might try to steal CHAR!!!!!
Rogue
Len...Got Gold???
Rogue
PRCS.....sold 4000 shares at .50 cents for a .10 cent or $400 profit today.
Still holding 1000 shares to see how it plays from here.
Rogue
PRCS....took a flyer this morning on old favorite Praecis Pharmacueticals (PRCS) massive selloff. I'm long from .40 cents.
http://stockcharts.com/def/servlet/SC.web?c=PRCS,uu[w,a]daolyyay[pb50!b200!f][vc60][iut!Ub14!Lh14,3]....
Rogue
Reuters says US troops obstruct reporting of Iraq By Barry Moody
Wed Sep 28,11:08 AM
Rogue comment....it takes a "looney tune" like me to show how much you are in deep "denial" Len. Keep "dreaming" Len.....but I sincerely hope you're right and they're not turning this country into a "police state". I guess we'll see soon enough in the future IF we truly have MORE or LESS freedom and libery in this country. The current trend is NOT pretty or "bulish" on freedom or liberty.
http://news.yahoo.com/s/nm/20050928/ts_nm/iraq_reuters_dc
LONDON (Reuters) - The conduct of U.S. troops in Iraq, including increasing detention and accidental shootings of journalists, is preventing full coverage of the war reaching the American public, Reuters said on Wednesday.
In a letter to Virginia Republican Sen. John Warner (news, bio, voting record), head of the Senate Armed Services Committee, Reuters said U.S. forces were limiting the ability of independent journalists to operate.
The letter from Reuters Global Managing Editor David Schlesinger called on Warner to raise widespread media concerns about the conduct of U.S. troops with Defense Secretary Donald Rumsfeld, who is due to testify to the committee on Thursday.
Schlesinger referred to "a long parade of disturbing incidents whereby professional journalists have been killed, wrongfully detained, and/or illegally abused by U.S. forces in Iraq."
He urged Warner to demand that Rumsfeld resolve these issues "in a way that best balances the legitimate security interests of the U.S. forces in Iraq and the equally legitimate rights of journalists in conflict zones under international law."
At least 66 journalists and media workers, most of them Iraqis, have been killed in the Iraq conflict since March 2003.
U.S. forces acknowledge killing three Reuters journalists, most recently soundman Waleed Khaled who was shot by American soldiers on August 28 while on assignment in Baghdad. But the military say the soldiers were justified in opening fire.
Reuters believes a fourth journalist working for the agency, who died in Ramadi last year, was killed by a U.S. sniper.
"The worsening situation for professional journalists in Iraq directly limits journalists' abilities to do their jobs and, more importantly, creates a serious chilling effect on the media overall," Schlesinger wrote.
"By limiting the ability of the media to fully and independently cover the events in Iraq, the U.S. forces are unduly preventing U.S. citizens from receiving information...and undermining the very freedoms the U.S. says it is seeking to foster every day that it commits U.S. lives and U.S. dollars," the letter said.
"SPIRALING OUT OF CONTROL"
Schlesinger said the U.S. military had refused to conduct independent and transparent investigations into the deaths of the Reuters journalists, relying instead on inquiries by officers from the units responsible, who had exonerated their soldiers.
The U.S. military had failed even to implement recommendations by its own inquiry into one of the deaths, that of award-winning Palestinian cameraman Mazen Dana who was shot dead while filming outside Abu Ghraib prison in August 2003.
Schlesinger said Reuters and other reputable international news organizations were concerned by the "sizeable and rapidly increasing number of journalists detained by U.S. forces."
He said most of these detentions had been prompted by legitimate journalistic activity such as possessing photographs and video of insurgents, which U.S. soldiers assumed showed sympathy with the insurgency.
In most cases the journalists were held for long periods at Abu Ghraib or Camp Bucca prisons before being released without charge.
At least four journalists working for international media are currently being held without charge or legal representation in Iraq. They include two cameramen working for Reuters and a freelance reporter who sometimes works for the agency.
A cameraman working for the U.S. network CBS has been detained since April despite an Iraqi court saying his case does not justify prosecution. Iraq's justice minister has criticized the system of military detentions without charge.
Schlesinger's letter said: "It appears as though the U.S. forces in Iraq either completely misunderstand the role of professional journalists or do not know how to deal with journalists in a conflict zone, or both."
Reuters and other media organizations in Iraq had repeatedly tried to hold a dialogue with the Pentagon to establish appropriate guidelines on how to safeguard journalists. These efforts had failed "and the situation is now spiraling out of control," Schlesinger said.
He asked Warner to question Rumsfeld specifically about the rules of engagement toward professional journalists, the failure to hold independent investigations into shooting incidents and to ask what was the guidance to U.S. forces on how to distinguish legitimate journalists from insurgents.
Rogue
bbotcs.....Ayn Rand/Alan Greenspan.
I had heard of her alot as young guy. I highly recommend her book of essays called "The Virtue of Selfishness". She is a real challenging thinker.....I would see why anyone of intellect(Greenspan??LOL!) would be somewhat attracted to her.
http://www.alibris.com/search/search.cfm
Her thoughts are quite challenging to all the "nonsense(propaganda)" out there today....I have a hard time disagreeing with most any of her viewpoints. With all the "BS" out there I would call that book almost a "manual on running a modern society". She really puts the role of Government "to the flame"...so to speak.
I don't think she would like what's going on in America today at all. Neither do I.
Rogue
Martial Law: The Pretext Is Now Set ...Special Report:Katrina/Rita Fallout Part Two
http://www.infowars.com/articles/ps/ps_america_martial_law2.htm
Infowars | September 27, 2005
By Steve Watson
Alex Jones Comment:
Bush and his corporate controllers are attempting a full-scale occupation of America. They are not satisfied with the level of control they already have over the citizens of this country; they want it all. The worst of it is that their efforts are totally transparent. The military encroachment in our lives is occuring right in front of our faces and is being enhanced by the day. We are on the verge of losing everything we hold dear: our lives, our liberty and our property to a growing military dictatorship. Posse Comitatus was enacted to defend citizens from the inate desire of militaries to take control and its being broken down right before our eyes. We have to fight this or we will all suffer grave consequences for our inaction.
In the Aftermath of Hurricanes Katrina and Rita it has become obvious that not only will another terror attack on US soil provide the pretext for a police state crackdown, so will a natural disaster. RELATED:
Click here for part one of this report
I'm not going to once again go over in depth the police state showcase that was New Orleans in the days after Katrina, but let us recap a few key points:
FEMA has been deliberately sabotaging relief efforts in New Orleans, making things worse than need be.
FEMA, its officials and the people it employs have a long history of incompetence, corruption, fraud and criminality.
MARTIAL LAW is HERE!
(Click here to learn more)
The Federal Government has illegally initiated total gun confiscation of law abiding citizens and forcibly removed them from their property in New Orleans. Federal forces have led criminal gangs of police in an America-killing gun grab.
Along with forced gun grabs and evacuation, we have further exposed the intricacies of the operative federalized Police State, with the presence of foreign troops, SWAT teams, privately employed security mercenaries, the treatment of citizens as "insurgents" and evacuees as "internees" and the euthanization and inoculation of survivors.
The bottom line on Katrina is that whether you believe it was all incompetence or part incompetence and part malevolence, the lasting pretext is the same.
When a disaster takes place, you have no rights and the federal government can arrest you if you don’t follow their every order.
FEMA is clearly using this human catastrophe as a means of executing its decade long plans and providing the pretext for future takeover scenarios of all major American cities.
FEMA is not an elected body, it does not involve itself in public disclosures, and it even has a quasi-secret budget in the billions of dollars. It has more power than the President of the United States or the Congress, it has the power to suspend laws, move entire populations, arrest and detain citizens without a warrant and hold them without trial, it can seize property, food supplies, transportation systems, and can suspend the Constitution. Not only is it the most powerful entity in the United States, but it was not even created under Constitutional law by the Congress.
FEMA executive orders have been paving the way for the police State for many years. For a full synopsis of FEMA's executive orders in light of the hurricane, click here.
Here comes the Police State to save the day
Such deliberate federal incompetence and criminality made things desperate in New Orleans after Katrina. The manufactured mainstream response has been that things were so bad in New Orleans that a police state was needed to save the day:
As Washington picks through the lessons learned from hurricane Katrina, there is a growing conviction that the only organization with the skills, expertise, and resources needed to respond quickly to a catastrophe of such magnitude is the American military. "There's a strong historical precedent against doing this," says Michael O'Hanlon, a defense analyst at the Brookings Institution here. "But now we've got a real reason." - Christian Science Monitor
President Bush's push to give the military a bigger role in responding to major disasters like Hurricane Katrina could lead to a loosening of legal limits on the use of federal troops on U.S. soil.... At question, however, is how far to push the military role, which by law may not include actions that can be defined as law enforcement — stopping traffic, searching people, seizing property or making arrests. That prohibition is spelled out in the Posse Comitatus Act of 1878, enacted after the Civil War mainly to prevent federal troops from supervising elections in former Confederate states. - Associated Press
"It is now clear that a challenge on this scale requires greater federal authority and a broader role for the armed forces -- the institution of our government most capable of massive logistical operations on a moment's notice," - President Bush
"I believe the time has come that we reflect on the Posse Comitatus Act," - Sen. John W. Warner, chairman of the Armed Services Committee
MARTIAL LAW is HERE!
(Click here to learn more)
The Following is from White House Press Secretary Scott McClellan's Press Gaggle last week. They are openly discussing suspending Posse Comitatus:
Q What's the next step on this idea of the DOD maybe taking over at certain times if it's a big enough disaster?
MR. McCLELLAN: Well, it's something we'll be discussing with congressional leaders, and talking about... whether it's a natural disaster or a terrorist attack or -- I should say, a natural disaster or a terrorist attack of a certain magnitude and scope, or a disease pandemic, like an avian flu outbreak, and you need to mobilize assets and resources and logistics and communications very quickly to help stabilize or contain the situation.
The Department of Defense is really the one organization that has the ability and capability to be able to do that.
Q -- those two laws that we were talking about earlier, the posse comitatus and the Insurrection?
MR. McCLELLAN: Well, you're talking about one area -- that's law enforcement. The President's talking about considering a situation where you need a clear line of authority in the event of a catastrophic event.
Q Does it take -- would it take an act of Congress to do what the President is thinking about? I think that's what you were saying.
MR. McCLELLAN: Yes, that's why he said, Congress needs to consider this, and that he wants to work with Congress to look at how we move forward on it.
Q So, basically, the bottom line is, is that the Defense Secretary would be the new line of command, and control all the operations?
MR. McCLELLAN: It's something we need to consider for the event of -- for any event of a extraordinary circumstance brought about because of some catastrophic event, whether it's a natural disaster or a terrorist attack -- a large-scale natural disaster or a large-scale terrorist attack type situation, or a large outbreak of disease.
Clearly it matters not if it's a terror attack or a natural disaster, or even some kind of disease outbreak, the precedent has been set for Martial Law.
So It was federalization and the criminal negligence and sabotage on the part of the Feds that caused the mass disruption in New Orleans, yet the call is for MORE federalization? The call is for troops on our streets, stopping traffic, searching people, seizing property and making arrests?
Everything we have warned you about for years IS NOW HAPPENING. After 9/11 we said the next major events would sell the people on the police state, look at the media response to Katrina and Rita, people are begging for laws to be passed to allow the police state to become the norm.
So called "Homeland security experts" are calling for federal troops, that don't need 72 hours for call-up as some National Guard units require, capable of dropping into a disaster zone as the damage is being done, rather than afterward. The media is calling for the TOTAL FEDERALIZATION of America.
They want "Military authorities" to supersede"Civilian authorities". When did we stop being people and become "civilians"? Can it really be a coincidence that the calls for complete federalization and martial law are coming in conjunction with the calls for greater funding for FEMA and Homeland Security? The perceived incompetence of the Feds has been manufactured in order to garner a greater wealth of both personnel, resources and mass support. We are literally sanctioning moves towards the police state, sleep walking into tyranny.
MARTIAL LAW is HERE!
(Click here to learn more)
As the Neocon criminals in charge of the US Government sink their teeth further into our freedoms, the masses are losing consciousness and becoming more passive. They EXPECT the government to demand they give up their liberties and now they are WILLINGLY doing so, in some cases even DEMANDING that the government take them. The more they ask, the more they shall receive.
NORTHCOM Takeover drills
After Katrina and Before Rita Lord Bush canceled a scheduled trip to Texas and instead visited Colorado Springs, Colorado and the U.S. Northern Command Headquarters.
Our sources informed us at that time that far from this being a change of plan, Bush was visiting Northcom to be witness to a martial law takeover drill which was directly connected to Granite Shadow, which the Washington Post reported, "is yet another new Top Secret and compartmented operation related to the military’s extra-legal powers regarding weapons of mass destruction. It allows for emergency military operations in the United States without civilian supervision or control.
A Joint Task Force Rita was been created under the jurisdiction of NorthCom. Operating out of Austin Texas, in liaison with NorthCom in Colorado, under the command of Army Lt. Gen. Robert Clark. A "standing joint force headquarters" was established in Austin, Texas.
Homeland Security Secretary Michael Chertoff subsequently classified Hurricane Rita as an "incident of national significance," which justifies the activation of a so-called "National Response Plan"(NRP).
As Michael Chossudovsky pointed out in his article on this, The National Response Plan (NRP) is effective upon issuance with a phased implementation process during the first year. During the first 120 days of this implementation process, the Initial NRP (INRP), Federal Response Plan (FRP), U.S. Government Domestic Terrorism Concept of Operations Plan (CONPLAN), and Federal Radiological Emergency Response Plan (FRERP) remain in effect. (For further details, consult the complete document at http://www.dhs.gov/interweb/assetlibrary/NRPbaseplan.pdf
So essentially, the period of time during which the NRP would be in operation would extend far beyond the emergency period in the disaster area. In all likelihood, the NRP would modify the functions of civilian government.
The Washington Post reported Aug. 8 that The Northern Command would be the lead agency in domestic terror response. The Pentagon "has devised its first-ever war plans for guarding against and responding to terrorist attacks in the United States, envisioning 15 potential crisis scenarios and anticipating several simultaneous strikes around the country, according to officers who drafted the plans."
Northcom has a history of calling for the end of Posse Comitatus and officials there seem to be hell bent upon a military takeover. Head of Northcom Gen. Ralph E. Eberhart was quoted in the New York Times in 2002 as saying
"My view has been that Posse Comitatus will constantly be under review as we mature this command, as we do our exercises, as we interact with FEMA, F.B.I., and those lead federal agencies out there,"
This is precisely the point, the erosion of Posse Comitatus has been ongoing for a long time. As revealed in part one of this report, military takeover drills and exercises have been in operation for years.
Eberhart has also said that he is anxious to use new technology, including unmanned surveillance blimps cruising at 70,000 feet and Predator drones scanning American coastlines.
The general said it was also possible that the North American Aerospace Defense Command would expand beyond the United States and Canada to include Mexico.
"To defend this nation, we have to defend as far out as possible...Therefore we need the support of Canada and Mexico to be able to defend our interests."
A recent Council On Foreign Relations document corroborates this proposed move. The 59-page CFR document spells out a five-year plan for the "establishment by 2010 of a North American economic and security community" with a common "outer security perimeter."
The document entitled "Building a North American Community," asserts that George W. Bush, Mexican President Vicente Fox, and Canadian Prime Minister Paul Martin "committed their governments" to this goal when they met at Bush’s ranch and at Waco, Texas on March 23, 2005. The three adopted the "Security and Prosperity Partnership of North America" and assigned "working groups" to fill in the details.
MARTIAL LAW is HERE!
(Click here to learn more)
So there we have Orwell's Oceania coming to pass. A unionized Americas under the control of a military dictatorship.
Could it be that Rita was a NORTHCOM beta test to see if they could get people out of the cities should they want to? One was a rich city, the other was a poor one. Was Katrina a beta test for keeping people in the city?
Whatever happens next it's going to be on a grander scale.
What more is it going to take?
We cannot go any further down the line towards a Martial Law Police State in America without actually being in one. How much more has to happen before people realize there is a Constitutional crisis in effect now.
The Neo-con element of the Elite power structure have decided that now is the time to instigate the takeover. The massive power trip they have received after 9/11 has tipped them over the edge. The loonies are in complete control of the asylum now. The wars in Afghanistan and Iraq and wherever else they choose next are side issues to them now. Target number one is the occupation of the USA.
When The United States of America become Oceania their goal is complete. As the masses sleepwalk into this scenario the few that are still awake are becoming more active and waking up more people. We have to move on this now, there is no more time for procrastination. Everyone should be writing reports like this one, everyone should be waking up their families and friends. We are in an Information War.
Are we going to stand by and be the generation who go down in history as the weak, poor saps that allowed themselves to be ruled over by brutish warmongering power hoarding criminals elites?
Or are we going to go down in history as the generation that defeated tyrannical violent warmongers by standing up and being counted? Through peaceful, progressive intelligent outreach and the reclaiming of our freedom.
Rogue
Alan Greenspan and Ayn Rand
By Bill Bradford
http://www.taemag.com/issues/articleid.16149/article_detail.asp
Alan Greenspan’s name first appeared in the New York Times not, as one might expect, in connection with politics or economics, but as the author of a 73-word letter to the editor of the Times Book Review. The future head of the Federal Reserve wrote to protest a hostile review of Ayn Rand’s novel Atlas Shrugged that had appeared a few weeks earlier.
It was the fall of 1957. By this time, Greenspan had abandoned a career as a jazz saxophonist, earned a degree at New York University’s School of Commerce, enrolled in and abandoned the Ph.D. program at Columbia, worked as staff economist with what today would be called a think tank, and become a partner in a Wall Street economic forecasting firm.
Alert readers noticed Greenspan’s name in the Times again seven weeks later, this time in Lewis Nichols’ column “In and Out of Books.” The subject was a group of admirers of Ayn Rand, who gathered on Saturday evenings in Rand’s living room “for discussions of philosophy.” Greenspan is listed among members of the group and identified only as “an economic consultant.”
Nichols described the group as a “class,” though he noted that “uncouth outsiders” were apt to use the language of religion rather than education to describe it. That may have been the last time Rand’s following was described as a class; as her acolytes grew in number and devotion, it gradually came to be treated as a religion and, increasingly, as a cult. At its head stood Nathaniel Branden, a psychotherapist 25 years Rand’s junior. He lectured on Rand’s philosophy of “Objectivism,” co-edited (with Rand) The Objectivist Newsletter (later The Objectivist), and controlled access to Rand. He recently described the beliefs of the cult in these words: “Ayn Rand is the greatest human being who has ever lived. Atlas Shrugged is the greatest human achievement in the history of the world. Ayn Rand, by virtue of her philosophical genius, is the supreme arbiter of any issue pertaining to what is rational, moral, or appropriate to man’s life on earth.”
From its modest origin in the early 1950s, Rand’s following grew rapidly. By the mid-1960s, over 20,000 copies of The Objectivist were selling each month, and people in more than 80 cities were gathering around tape recorders to listen raptly to Nathaniel Branden Institute lectures.
But all was not going well. Unbeknownst to everyone but their spouses, Rand and Branden had been having an affair since the mid-1950s, and by now Branden wanted out. This led to a bizarre chain of events, culminating with Rand calling Branden to her apartment, where she slapped him around and cursed him (“If you have an ounce of morality left in you, an ounce of psychological health, you’ll be impotent for the next 20 years! And if you achieve any potency, you’ll know its a sign of still worse moral degradation.”). In the next issue of The Objectivist, she repudiated Branden “totally, permanently” because of a “disturbing change” in “his intellectual attitude,” to wit, “a tendency toward non-intellectual concerns.” She also charged him with poor management of their jointly owned publishing effort and detailed some of the events that had led to their split. She did not mention he had jilted her.
As I learned in hours of interviews with their associates, Greenspan was a member of Rand’s inner circle during this entire period and beyond. He lectured on economics for the Nathaniel Branden Institute. He wrote for the first issue of The Objectivist Newsletter, and when Rand broke with Branden, he signed a public statement condemning the traitor “irrevocably.” When Gerald Ford appointed him to the Council of Economic Advisors, he invited Rand to his swearing-in ceremony, and attended her funeral in 1982.
Greenspan was introduced to Rand by Joan Mitchell, a young woman he was dating. She was a friend of Barbara Weidman, Nathaniel Branden’s fiancée and already a member of the group of young admirers who met in Rand’s apartment. “I was not really able to interest him in Objectivism,” Joan Mitchell Blumenthal recalls. She and Greenspan married, but quickly discovered they had little in common. It was only after their marriage was annulled that “he started showing up at Ayn’s, a strange turn of events.”
Greenspan and Rand didn’t hit it off. According to Nathaniel Branden, he was philosophically a logical positivist and economically a Keynesian, both doctrines anathema to Rand. “How can you stand talking to him?” Rand asked Branden. “A logical positivist and a Keynesian? I’m not even certain it’s moral to deal with him at all.” (Barbara Branden doesn’t remember it that way, and neither does Greenspan. She and Greenspan deny he was ever a Keynesian.)
Nathaniel Branden engaged Greenspan in some “very long and involved philosophical, metaphysical, epistemological, political, economic, and moral conversations,” according to Barbara, which soon “had a profound effect upon him.” He abandoned his positivism and Keynesianism, and soon, along with other members of the Collective (as the Rand’s young acolytes ironically called themselves), he was reading chapters of Atlas Shrugged as it was being written.
“Alan became much warmer, more open, more available,” recalls Barbara Branden. “I mean Alan will never be Mr. Warmth, that’s just not his personality and nature. But the dourness, the grimness, the solemnity that he had when we first met him practically disappeared, I think, because he accepted us and knew that all of us including Ayn and Frank accepted him. It was like a family, it really was. And he was part of that family.”
Not everyone shared Barbara’s opinion. One member of the Collective recalls, “It’s simply that he is a very cold person. It’s very hard to know what’s on his mind. Through those thick Coke-bottle glasses, you can’t even tell that he’s awake sometimes.”
More than one member of the Collective marveled at his ability to attract beautiful women. “It was incredible how he always had a beautiful woman at his side,” recalls Barbara Branden. “I think it was the attraction of his intellectual power and probably his reserve. You couldn’t knock him over by batting your eyelashes at him. He certainly had a profound effect on women.” Another member speculates: “Maybe he was a good kisser, from all those years as a saxophone player.” His ex-wife Joan Mitchell Blumenthal offers a different explanation. “He is very clever, he knows a lot about a million things, and he has a wonderful sense of humor. Alan is charming and always interesting.”
He remained the odd man out. Rand preferred people who were young and (as one member of the Collective remembers) “malleable.” But she cut Greenspan some slack by virtue of his maturity and occupation. “He was her special pet, because he was older, and in the business world,” recalls Edith Efron, who joined the Collective a few years later. “She didn’t know anyone else very well who was a businessman. I think this was very important to her…she allowed him more intellectual liberty than she did other people.”
One area where Greenspan was apparently permitted ideological deviation was economics. The “official” Objectivist theory of economics was the Austrian theory of Ludwig von Mises, which, among other tenets, holds that economic forecasting is impossible. The issue apparently wasn’t discussed, but Greenspan continued his successful career as an economic forecaster after becoming involved with Rand. And he never, as one Collective member archly points out, “attended Ludwig von Mises seminars at New York University, despite ample opportunity.” (Today, Greenspan describes himself as an “eclectic, free-market forecaster,” who “generally agrees with Austrian economics.”)
“He was different,” Barbara Branden recalls. “Which was very wise of him. He kept his private life to himself, which the rest of us did not do.” Another recalls he “used to come late to everything and leave early. And he had his own relationship with [Rand] which was dignified. And he kept somewhat aloof from everybody, which was a smart thing to do.”
And he remained a puzzle to some. “Alan Greenspan is incredibly terse,” one member told me, as if “everything he sends is a telegram and they’re charging by the word. He’s deliberately low-keyed and ponderous. On the other hand, he is a musician, so there obviously is a side of him that has passion and emotion, but…I would say he’s very guarded. He must be a wonderful poker player.”
Barbara Branden remembers this differently. “Alan had no talent for and no interest in small talk. So if people around him were engaged in small talk they wouldn’t get anything from him. I mean that he would simply stand there and have nothing to contribute. But if there was something interesting, then he was very social.”
Greenspan was unique among the Collective’s older members. The first to join, he was virtually the only one not to be expelled. In 1957, economist Murray Rothbard read Atlas Shrugged and was enchanted. He wrote Rand an enthusiastic fan letter and was invited into her movement, only to be expelled less than a year later, ostensibly for plagiarism. Philosopher John Hospers, who never bought in to all of Rand’s thinking on epistemology and metaphysics but was sufficiently sympathetic with her esthetics, ethics, and politics that he was a frequent guest at Collective gatherings, was expelled instantly in 1962 after he criticized Rand’s address to the American Society for Esthetics, which he had arranged. Journalist Edith Efron, who had joined the Collective after she interviewed Rand for Mike Wallace’s syndicated column, was expelled without explanation in 1967.
Greenspan’s aloofness may have been one reason he survived. Coming to meetings late, leaving early, he wasn’t very involved in the battles. John Hospers recalls that “he avoided talk about philosophical issues altogether,” which also helped keep him above the battles. He was certainly aloof from the biggest battle of all, the battle between Rand and Nathaniel Branden in 1968. By this time, he was off working as a policy advisor to Richard Nixon, who was campaigning for president. He’d been recruited to the campaign in 1967 by Martin Anderson, who had become a peripheral member of Rand’s coterie after reading Atlas Shrugged in the early 1960s. It turned out that an old friend of Greenspan was also involved in the campaign: Leonard Garment, who had managed the jazz band in which Greenspan had played back in the late ’40s, had become Nixon’s law partner and was working on the campaign. Greenspan quickly became a domestic and economic policy analyst for Nixon. When Rand and Branden split, Rand asked Greenspan to repudiate Branden publicly. Without ever speaking to Branden, he agreed.
After the 1968 campaign, Greenspan returned to economic forecasting in New York, refusing job offers from the Nixon administration. Six years later, President Ford offered him a position as chairman of the Council of Economic Advisors; Greenspan accepted. With Ford’s defeat in 1977 he returned to private life, but was appointed by Ronald Reagan to head a special commission on Social Security in 1981. Since 1987 he has headed the Federal Reserve System.
From the start of his political career, questions have arisen about Greenspan’s political beliefs. Shortly after his appointment to the Council of Economic Advisors, he was asked on “Meet the Press” whether he had changed his opinion, published years earlier in a Nathaniel Branden Institute pamphlet, that anti-trust laws ought to be abolished. He replied forthrightly that he continued to believe they should be, but he was well aware that such a move would be politically unpalatable for the foreseeable future.
Greenspan has also taken flack from other Randians for failing to implement policies that would radically free the economy. “Alan Greenspan, whatever his rationalization,” John Ridpath of the Ayn Rand Institute told an interviewer for the Canadian Broadcasting Company, has “abandoned any philosophically principled stance” and “compromised himself and what he learned from Ayn Rand over and over.”
Others accuse him of trying to implement those same policies in a deceitful manner. Journalist Michael Lewis recently wrote that Greenspan “has preserved a hard core of fanaticism, encas- ing it in a shell of pragmatism. No more waiting for everyone to realize that extreme laissez-faire capitalism is the best system: He’s taking control of the process himself, ever so quietly.” Only a few months earlier, Greenspan had recommended to a Senate committee that all economic regulations should have fixed lifespans. Senator Paul Sarbanes (D-Md.) accused him of “playing with fire, or indeed throwing gasoline on the fire,” and asked him whether he favored a similar provision in the Fed’s authorization. Greenspan coolly answered that he did. Do you actually mean, demanded the senator, that the Fed “should cease to function unless affirmatively continued?” “That is correct, sir,” Greenspan responded. “All right,” the senator came back, “the Defense Department?” “Yes.”
The Senator could scarcely believe his ears. “Now my next question is, is it your intention that the report of this hearing should be that Greenspan recommends a return to the gold standard?” Greenspan responded, “I’ve been recommending that for years, there’s nothing new about that…. It would probably mean there is only one vote in the Federal Open Market Committee for that, but it is mine.” This may be the first time that advocating a policy on a nationally televised Senate committee meeting has been characterized as trying to implement a policy “ever so quietly.”
Greenspan doesn’t talk to the press as a matter of policy. But it appears he has tried to implement policy changes coherent with laissez-faire capitalism whenever it was possible, and he has articulated his case when given the opportunity. As Barbara Branden observes, “Alan believes in the art of the possible.” And, as his friend Joan Mitchell Blumenthal has observed, “Alan is very devoted to Ayn. He still thinks of her most kindly.”
Rogue
Richard Russell on Oil
Richard Russell
Dow Theory Letters
September 27th, 2005
http://321energy.com/editorials/russell/russell092705.html
I want to start with the chart below on oil. After its recent rise, oil has formed the potential "head-and-shoulders top" that you see on this chart. The odds are fairly good that oil will break support at around 62, and if it does break support I have no idea how low it may correct. I'm guessing that there should be some good support at the July 21 closing low (Oct. futures) at 58.
But that's not the point. The point is much bigger than a potential oil correction here. I've just finished four books about oil and energy. The book I read over the weekend is entitled, "Beyond Oil, the View From Hubbert's Peak" by Kenneth S. Deffeyes. Mr. Deffeyes is a professor emeritus at Princeton University; his previous book, published in 2001, was entitled, "Hubbert's Peak, the Impending World Oil Shortage."
The introduction to this book tells a lot of the oil story. It starts, "We are facing an unprecedented problem. World oil production has stopped growing; declines in production are about to begin. For the first time since the Industrial Revolution, the geological supply of an essential resource will not meet demand. . . Hubbert predicted that annual oil production would follow a bell-shaped curve; the curve became known as 'Hubbert's peak.' The more optimistic of his two estimates in 1969 placed the world's total oil endowment at 2.1 trillion barrels with peak production in the year 2000. My best current estimate puts the total oil at 2.013 trillion barrels peaking in 2005. Whichever of us is correct, or even if we are both wrong, we are not very wrong. Wherever the peak, the view is not good." He adds, "World oil production is going to decline slowly, at first, and the more rapidly."
Another seminal and widely-acclaimed book is entitled, "Twilight in the Desert, the Coming Saudi Oil Shock and the World Economy," by Matthew R. Simmons. In this book Simmons, for the first time and using original data, concludes that Saudi Arabia's oil has passed its peak of reserves. I'll quote just one sentence from the Simmon's book. "Once oil supply peaks and begins to decrease, the scarcity factor alone will force oil prices to far higher levels than today's perceived 'high prices'."
Stephan Leeb ("The Complete Investor" advisory) is a brilliant writer and analyst. He writes, "Your grandchildren will live in a world without oil. In the next one to four years, half the oil that the earth started with will be gone. And IF we kept using is the way we are, every drop would vanish by about 2029. It won't happen quite that way, of course. Long before 2029 oil quality will go from fair to terrible, the extraction costs will become crippling, and you will be paying $12 and $15 a gallon at the gas pump. Life will revolve around oil -- or the lack of it. .."
Yeah, I know. We've had a number of oil spikes and oil scares before. And each time the price of oil has come comfortably back down, and the whole oil problem is then put aside. Right, but this time something different has entered the picture.
The difference is the entrance of China and India and the rest of Asia into the global picture. These nations are thriving, making lots of money, and their populations want what we have -- cars, loads of cars, millions of cars. And that's going to be the difference this time. There's now a massive DEMAND side to the oil problem. The world battle for oil and oil reserves is on.
Question -- Russell, you keep saying that the US public isn't taking the oil situation seriously. Why do you say that?
Answer -- I say it because US auto dealers are still selling SUVs, trucks and gas-easters by the tens of thousands. Wife Faye subscribes to five auto magazines. All the mags write about is performance cars, luxury cars, cars that do zero to 60 in 3.5 seconds Check their cover pictures. C'mon, what I see and hear tells me that the US public believes this is "just another oil scare." But it isn't.
The correction in oil that "could" be coming up will provide us with an opportunity to accumulate oil and energy stocks and preferably Exchange Traded Funds (ETFs). I've already mentioned -- namely, VDE, XEL and the closed-end fund, PEO. Then there's the D-J Energy Sector IYE. I'm suggesting these funds rather than picking individual oil or energy stocks. There's another ETF that I like as a long-term holding, it's the Goldman Sachs Natural Resources ETF -- symbol IGE.
The cycles of financials and tangibles (including commodities) tend to extend for many years. I believe that the cycle of financials started around 1980 and ended around 2000. I believe we're now in the early part of the cycle in tangibles, and also at the beginning of the decline in the cycle of financials.
The cycle of financials was built on an explosion of junk paper money. Once the world went completely off gold in 1971, the platform for the bull market in financials was laid. Twenty years of an increasing ocean of fiat paper followed.
But now we see gold moving up past all paper currencies. We see commodities (without agriculturals) surging higher. Oil has now joined the parade of rising tangibles. Diamond prices are through the roof, as are many collectibles (a Picasso just sold for over $100 million). The Sotheby's and Christy's auction catalogues are stuffed with collectibles at high prices. Real estate is going wild, particularly on the two coasts. Condo-mania rules, and one sector after another shows itself as the bull market in tangibles heats up.
You can live without a Picasso or a second home or a high-priced condo -- but oil, that's another matter. The Chinese and Indians may not be wild about Matisse paintings or million-dollar condos in Las Vegas, but they are most definitely interested in gasoline with which to run their fast-expanding population of cars. So today's oil story is very different from previous oil "crises." This time one third of the population of the world has entered the battle for oil. Therefore, today's rise in the price of oil is not just another speculative spike, it's the next higher zone or level for oil, just as 450 and above represents the next higher level for gold.
So say "Bye" to the age of paper money, and say "hello" to the new age of the real, the tangible, the solid. The Fed can create $30 billion of M-3 liquidity in a week, but they still can't make a quarter-carat diamond or an ounce of gold or a lousy pint of oil. So if oil or gold corrects here or if oil or energy ETF's sink a bit, don't complain. Treat such action as an opportunity.
lots more follows for subscribers...
Richard Russell
Dow Theory Letters
©Copyright 2005 Dow Theory Letters, Inc.
Richard Russell began publishing Dow Theory Letters in 1958, and he has been writing the Letters ever since (never once having skipped a Letter). Dow Theory Letters is the oldest service continuously written by one person in the business.
He offers a TRIAL (two consecutive up-to-date issues) for $1.00 (same price that was originally charged in 1958). Trials, please one time only. Mail your $1.00 check to: Dow Theory Letters, PO Box 1759, La Jolla, CA 92038 (annual cost of a subscription is $250, tax deductible if ordered through your business).
Rogue
Some thoughts on the gold price for 2006....
http://www.thebulliondesk.com/content/reports/tbd/temp/DenverSep05.pdf
Rogue
PTN...news out today. Stock looks "washed out" long-term and ready to start making an extended upward move. 10-bagger???
http://stockcharts.com/def/servlet/SC.web?c=PTN,uu[w,a]daolyyay[pb50!b200!f][vc60][iut!Ub14!Lh14,3]&...
Palatin Technologies, Inc. Receives $10 Million Payment From King Pharmaceuticals, Inc.
Tuesday September 27, 7:30 am ET
CRANBURY, N.J., Sept. 27 /PRNewswire-FirstCall/ -- Palatin Technologies, Inc. (Amex: PTN - News) announced today the receipt of $10 million from King Pharmaceuticals, Inc. (NYSE: KG - News) pursuant to their strategic alliance to jointly develop PT-141 for the treatment of male and female sexual dysfunction. King will receive 4,499,336 shares of common stock plus warrants to purchase 719,894 shares of common stock at an exercise price of $2.22.
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Stephen T. Wills, Palatin's Chief Financial Officer, commented: "We are very pleased with our relationship with King and the progress of the PT-141 program. With ongoing Phase 2 trials in both male and female sexual dysfunction patients, the commercial development program is in full swing and we look forward to the successful and continued advancement of the program towards Phase 3 pivotal trials."
About PT-141
PT-141 is the first compound in a new drug class called melanocortin receptor agonists under development to treat sexual dysfunction. This new chemical entity is being evaluated in Phase II clinical trials studying the efficacy and safety profile of varying doses of this novel compound in men experiencing erectile dysfunction ("ED") and women experiencing female sexual dysfunction ("FSD"). The mechanism of action of PT-141 may offer important benefits over currently available products for the treatment of ED because it acts on the pathway that controls sexual function without acting directly on the vascular system. Clinical data indicates that PT-141 may be effective in treating a broad range of patients suffering from ED. The nasal formulation of PT-141 currently under development is as convenient as oral treatments, is more patient-friendly than invasive treatments for ED, such as injections and trans-urethral pellets, and appears to result in a rapid onset of action.
Although the current ED market is primarily served by PDE-5 inhibitors which target the vascular system, a substantial unmet medical need for alternative sexual dysfunction therapies exists. Many patients are contraindicated for, or non-responsive to, PDE-5 inhibitors. For example, unlike PDE-5 inhibitors which are contraindicated in patients taking nitrates, primarily for the treatment of cardiovascular disease, current clinical data indicates that PT-141 should not be contraindicated in patients taking nitrates. Current literature indicates that about one half of all patients who receive an initial prescription for a PDE-5 inhibitor do not renew the prescription due chiefly to adverse side effects, drug interaction issues, and/or the lack of an acceptable level of responsiveness.
About ED
ED is defined as the consistent inability to attain and maintain an erection sufficient for sexual intercourse. The condition is correlated with increasing age, cardiovascular disease, hypertension, diabetes, hyperlipidemia and smoking. In addition, certain prescription drugs and psychogenic issues may contribute to ED. It is estimated that some degree of ED affects one half of all men over the age of 40 and that 150 million men worldwide suffer from ED.
About FSD
FSD consists of four components, hypoactive sexual desire disorder, female sexual arousal disorder, dyspareunia or painful intercourse and anorgasmia. To establish a diagnosis of FSD, these components must be associated with personal distress, as determined by the affected woman. A February 10, 1999 study published in the Journal of the American Medical Association, JAMA, titled, "Sexual Dysfunction in the United States: Prevalence and Predictors," states that some form of FSD appears to be prevalent in approximately 43 percent of the female population.
About Palatin Technologies, Inc.
Palatin Technologies, Inc. is a biopharmaceutical company developing melanocortin-based therapeutics. The Company has one product (NeutroSpec(TM)) on the market generating revenue and a pipeline of product opportunities in development. The Company's internal research and development capabilities, anchored by its proprietary MIDAS(TM) technology, are fueling product development. Palatin's strategy is to develop products and then form marketing collaborations with industry leaders in order to maximize their commercial potential. To date, the Company has formed partnerships with Mallinckrodt, a subsidiary of Tyco Healthcare, and King Pharmaceuticals. For additional information regarding Palatin, please visit Palatin Technologies' website at http://www.palatin.com.
About King Pharmaceuticals, Inc.
King, headquartered in Bristol, Tennessee, is a vertically integrated branded pharmaceutical company. King, an S&P 500 Index company, seeks to capitalize on opportunities in the pharmaceutical industry through the development, including through in-licensing arrangements and acquisitions, of novel branded prescription pharmaceutical products in attractive markets and the strategic acquisition of branded products that can benefit from focused promotion and marketing and product life-cycle management.
Any statements contained in this press release that refers to future events or other non-historical matters are forward-looking statements. Palatin disclaims any intent or obligation to update any forward-looking statements. Such statements are based on Palatin's expectations as of the date of this press release and are subject to risks and uncertainties that could cause actual results to differ materially. Important factors that could cause actual results to differ from current expectations include, among others: the inherent uncertainty associated with financial projections; and such risks and uncertainties as detailed from time to time in Palatin's public filings with the U.S. Securities and Exchange Commission, including but not limited to, Palatin's Annual Report on Form 10-K for the year ended June 30, 2005 and its Quarterly Reports on Form 10-Q for the quarterly periods ended September 30, 2004, December 31, 2004 and March 31, 2005.
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Source: Palatin Technologies, Inc.
Rogue
PTN....this one looks good technically and fundamentally as a good "10-bagger" possibility.
Palatin Technologies to Present at the UBS Global Life Sciences Conference
Monday September 26, 4:18 pm ET
CRANBURY, N.J., Sept. 26 /PRNewswire-FirstCall/ -- Palatin Technologies, Inc. (Amex: PTN - News) today announced that it will present at the UBS Global Life Sciences Conference at 9:30 a.m. Eastern Time on Tuesday, September 27, 2005 at the Grand Hyatt New York in New York City.
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Carl Spana, Ph.D., President and Chief Executive Officer of Palatin Technologies will provide an update on the Company's commercial and development programs. A live audio webcast of this presentation will be available at http://www.palatin.com.
About Palatin Technologies, Inc.
Palatin Technologies, Inc. is a biopharmaceutical company developing melanocortin-based therapeutics. The Company has one product (NeutroSpec(TM)) on the market generating revenue and a pipeline of product opportunities in development. The Company's internal research and development capabilities, anchored by its proprietary MIDAS(TM) technology, are fueling product development. Palatin's strategy is to develop products and then form marketing collaborations with industry leaders in order to maximize their commercial potential. To date, the Company has formed partnerships with Mallinckrodt, a subsidiary of Tyco Healthcare, and King Pharmaceuticals. For additional information regarding Palatin, please visit Palatin Technologies' website at http://www.palatin.com.
Any statements contained in this press release that refers to future events or other non-historical matters are forward-looking statements. Palatin disclaims any intent or obligation to update any forward-looking statements. Such statements are based on Palatin's expectations as of the date of this press release and are subject to risks and uncertainties that could cause actual results to differ materially. Important factors that could cause actual results to differ from current expectations include, among others: the inherent uncertainty associated with financial projections; and such risks and uncertainties as detailed from time to time in Palatin's public filings with the U.S. Securities and Exchange Commission, including but not limited to, Palatin's Annual Report on Form 10-K for the year ended June 30, 2005 and its Quarterly Reports on Form 10-Q for the quarterly periods ended September 30, 2004, December 31, 2004 and March 31, 2005.
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Source: Palatin Technologies, Inc.
Rogue
"The end of cheap energy".....Sprott energy presentation.
http://www.sprott.com/pdf/Newfoundland_Energy_ppt_Sep_2005.pdf
Rogue
Long article...but definately worth reading!
I, Economist
http://www.dailyreckoning.com/Writers/Mogambo/DREssays/MG0926.html
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“So, you are thinking of writing to The Mogambo and asking "What is the deal with foreign reserves, and how I can get my grubby, grasping little hands on some of that lovely, lovely foreign reserves money, most of it in dollars?" I will save you the trouble.”
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By The Mogambo Guru
September 26, 2005
- Through the peephole of the Mogambo Bunker Of Impenetrable Steel (MBOIS), I see that the Federal Reserve only increased total credit by $1.3 billion last week. While $1.3 billion is probably chump change to a big shot like you and the spendthrifts at the Fed and Congress, it is still a big chunk of change to me. More interesting, of course, is that the Fed is now steadily monetizing federal debt, and last week they created enough money to buy up $2 billion in government debt! Not much, but like my parents said when I got a lousy stick of chewing gum for Christmas, it is the thought that counts, not the amount.
Spinning the periscope around, we can see what the stupid banks were up to, and if you want to know why I call them "stupid banks," then spend a few minutes reading economic history and you will see that all economic crises were caused by the banks acting stupidly for one reason or another; by which I usually mean "because the government acted stupid"; by which I mean "they spent so damned much money and incurred so damned much debt that the economy was destroyed." So, now that you are scared of the banks, and are hiding under your bed, you’re probably peeking out and whimpering, "What in the hell are they up to now?"
Well, their little sandboxes got filled with some new sand and new toys, as the required reserves in the banks abruptly fell to $42.4 billion, even though their loans/leases book increased by $25 billion to $5,312 billion. According to these figures, the reserve ratio is - and hold onto your hats - now a measly 0.08%! The standard, textbook example ratio is 10%! And here they are at less than 1%! They have no cushion against losses of any kind! Wow! What guts! What nerve! What stupidity!
Since I am much too aghast for words, I will make a very rude gesture to indicate that this means that the Fed is getting more and more desperate to cram money into this ridiculous economy, and is giving the banks unprecedented degrees of freedom to loan out every nickel they can get their grubby little banker hands on. This is all in a desperate attempt to keep this bankrupt economy going for a few more hours, or days, or weeks…maybe months. Maybe it will even work. But I seriously, seriously - and you can see from my face how serious I am - doubt it.
But they are pulling out all the stops. Mark Lundeen, an independent economist of sorts, reports that last Thursday, "The Fed added to the Repo pool three times! Unheard of!!!! Crazy!!! Lotsa worried men in suits buzzing round Uncle Alan."
This may have something to do with foreign holdings at the Fed dropping by $6.8 billion last week. It looks like foreigners are getting really, really, really tired of propping up the wildly dysfunctional and profoundly idiotic American economy, since it is becoming obvious that it is all money down a rat hole.
But who knows? From the September 17 issue of the Economist magazine, we read that China now has more foreign reserves than Japan! China and Hong Kong have combined reserves of $870 billion, most of it in dollars. For the record, Japan has about $830 billion in foreign reserves, most of it in dollars. The four countries of South Korea, India, Singapore and Taiwan combined, have another $700 billion in foreign reserves, most of it in dollars. Pop quiz: Did you notice the phrase, "most of it in dollars"?
So, you are thinking of writing to The Mogambo and asking "What is the deal with foreign reserves, and how I can get my grubby, grasping little hands on some of that lovely, lovely foreign reserves money, most of it in dollars?" I will save you the trouble. The foreign reserve is money that winds up in the hands of the Central Bank. How does that money end up there, instead of in some secret Swiss account of The Mogambo? The $730 billion per year trade deficit that we have sends money overseas to pay for the stuff we buy from them. The Asian firms take the dollars to the bank and want to exchange them for their own money. So, the bank then prints up some of their local money and exchanges it for the dollars. Now the bank has some new foreign reserves, all of it in dollars.
And it is this increase in the money supply (monetary inflation) that causes price inflation. Bummer! That is not the end of the sad story. Remember all those local currency banknotes that they printed up to exchange for those dollars? Well, some of them end up in the central banks of other countries, thus expanding their foreign reserves.
And when you take a look at the figures for the increases in the money supplies of countries in the world, they are almost all rising much, much, much faster than inflation and population increases combined, which means more price inflation! Now you know why I am gobbling tranquilizers like candy.
- It was very interesting to me to read the letters to the editor in Barron's this week. Five of the eight letters were in reference to the September 5, 2005 Barron's article by Alex J. Pollock entitled, "Can You Afford To Retire?" I said to myself, "Huh? I don't remember that!" So, I jumped in my time machine, zipped through the time-space continuum, got a copy of the article, and then I remember I had read it. I just dismissed it and forgot about it.
It uses these long-term averages to calculate how much money you will need if you want to retire for 20 years after working 40 years. In short, you somehow amass enough money that two days of working will be able to finance one day of retirement.
The basis of his astonishing investment return calculation is that you will get, on average, a real, inflation-adjusted, yield in Treasury bonds of 3%. Hahahaha! Now you are starting to see why I dismissed the article! Inflation is now running, according to the just-released CPI report, at 3.6%! Ten-year T-bonds are yielding 4.27%! This is a real, inflation-adjusted, yield of 0.67%! And this has been going on for years already! So, the idea of bonds yielding, after inflation, an average 3%, Makes The Mogambo Laugh With Scorn And Contempt (MTMLWSAC).
But suppose that the long-term average yield on bonds really is a lofty 3%. Then that means that T-bonds, right now, should be yielding 6.6%. But, but, but, they are not yielding that! They are yielding a lot less than that. That means, to get back to the 3% real, inflation-adjusted, yield, bonds have to start not only yielding 6.6%, but also more than that! They have to yield more to make up for the last few years where you were making a lot less than 3%. Currently it’s about 0.67%, and it has often been a lot less than that. If they don't, then the long-term, real yield would be less than 3%, which violates the constants we all stipulated to at the beginning. So, now we are talking about a nominal yield of 8-9%! Hahahaha!
And not only that, but the guy makes no adjustment for the taxes you are going to pay on those capital gains when you sell the bond, or the taxes on the interest, or as is the case in the real world, both.
I know that you are happy that you are suddenly making 8-9%, and you are doubly happy that we are ignoring taxes. Already I can see your mind working on how you are going to defraud the taxman. As an aside, let me advise you to not ever, ever, ever cheat on your taxes, as the penalties they can levy on you will break your back, break your heart, and consume your whole life, as you think about it, fret about it, and have nightmares about it. You will worry about it every waking moment, and the few lousy dollars that you are ahead cannot possibly be worth it, especially after paying the lawyer to try to keep you out of the slammer. The way to pay fewer taxes is at the ballot box; when you get rid of the big-spending, socialist morons you accidentally elected last time, because you showed up at the polls either stupid or drunk, or as in the case of The Mogambo, both. And if you are from Massachusetts…yes, I am especially talking about you.
But this is not about taxes, or why the halfwits we elected to Congress have made inflation so high with their socialist spending programs and entitlement programs that are now supporting a full third of all Americans. This is not even bringing up the horrid Federal Reserve, a secretive cartel of private banks who cleverly put the name "federal" in the name they chose to make people think that it is a government agency, but it ain't, even though their incredible stupidity makes them seem like a real government agency.
No, this is about what we professionals in the economics business call The Mogambo Big Freaking Point (MBFP): It all depends on where you are in the business cycle. Write this down in your notes. You will find it very instructive in the years to come.
Here is my iron clad, unassailable reasoning. Today you are getting a real yield of about a half percent, right? So, to get back to a real yield, interest rates have to go to - and let's be conservative - 8%.
But what happens if you buy a bond today, one that yields that real 0.67% that we were laughing about earlier? When interest rates rise to that long-term average of 8% (which is, as we know, about double - double! - what today's ridiculously over-priced bonds are nominally yielding today), the market price of the bond that you are now so proudly holding will plummet to less than half what you paid for it! Sucker! You will realize a loss…a big loss…a huge freaking capital loss if you sell! Huge!
And if you don’t sell the bond before maturity, you will be stuck with that damned silly, embarrassingly puny 4.27% yield, when everybody else is making 8%, until the damn thing matures! I will leave it up to you to imagine how your career will fare, when every day at work people will laugh at you and say "Hahahaha! Mogambo is a big fat idiot who locked us into getting half-a-percent interest on our money for the next twenty years!"
The Mighty Extra-Sensory Mental Powers Of The Mogambo (MESMPOTM) are abuzz, meaning that I know what you are thinking. You are wondering, "Does any of this impress pretty girls or boards of directors?" Unless you are a woman, then you are thinking, "Does any of this impress hot hunks with tight buns or boards of directors?" Let me tell you, from a guy that knows first-hand that boards of directors are not happy when you report that, through your own ignorance, stupidity and poor judgment, the firm's money is locked in for twenty long years, generating almost nothing in return. In fact, boards of directors are usually far beyond merely "unhappy." They are more toward the end of the spectrum where they summon security guards to clean out my desk, and they steal my stuff while they do it…important stuff…personal stuff, like that autographed photo of President Bush I had on my desk, where he has written, "I hate your guts, too! Now stop insulting me, you stupid little jerk."
And I can only imagine with horror how it impresses pretty girls, and I don't want to know, as I get enough insults, abuse, and lawsuits from them as it is.
But I am sure that you assume that I did not read the whole article, since I laugh in derision when it declared the assumptions, plus the fact it did not have any photographs of Victoria's Secret models posing in their underwear to keep my interest. But you may be too hasty in judging The Mogambo! Perhaps I had read more of the article instead of, like you figure, crumpling it up and throwing it into the fireplace with a snort of contempt, and then my wife says, "Get that damned paper out of the fireplace, you moron, and put it in the trash where it belongs!"
Well, you would be wrong! I did read more. I'm sorry I did. Mr. Pollock also goes on to say that a portfolio of stocks and bonds, "might be expect to return 4% over inflation." So, the bond half of your portfolio making three percent means that the stock half will make a, inflation-adjusted, yield of 5%? Hahahaha! I can't stop laughing! Hahahaha! This is getting more and more bizarre! Stocks are not making any money at all, if a price/earnings ratio of 19.54 on the SP500, or the dividend yield of 1.81% on that same index are any indications, and haven't made you anything for five years running in the market price. Five percent a year…Hahahaha!
I will not even comment on the stupidity of thinking that everybody can make money in the stock market. They can't. If everyone puts 10 dollars into a bucket, then it is impossible for everybody to take twenty dollars out of the bucket. Jeez! You would think it would be obvious!
Remember that part where I said that it all depends on where you are in the business cycle? Well, we are only talking about today. Stocks and bonds are a bad, bad idea today. There was a time when buying bonds was a really, really, good idea, and they were paying above their long-term, real, inflation-adjusted average! Then, when interest rates fell, as they inevitably do, the bonds went up in value! This ain't, in the vernacular, nowhere near that time no how.
And there was a time when buying stocks was a very, very good idea, too; back when the P/E ratio was below its long-term, real, inflation-adjusted, average, too. As with bonds, this ain't that time, either. This ain't, again, nowhere near that time, no how.
The sad truth is that inflation will destroy whatever little bit of money that you set aside, as it is currently destroying the little bit of money that you have been setting aside, especially for the last five years. The sad, sad truth is that you will need to save at least one day's pay for one day's retirement. In other words, you must save 100% of your income if you want to have enough money to offset the roaring inflation that we are going to have over the next decades! Hahahaha!
So, how bad is inflation? Alert reader Mike S. sent me the table of inflation calculated by Freebuck.com, using the same components of the official consumer price index, but calculated by merely looking at the price of something in 1968, and then looking at what the item costs now. Both of the statistics have housing at 40% of the total market basket.
So, what is the bad news? Well, first off, the official government number is that annual inflation has averaged - and I hope you have a safety helmet on when you hear this - 4.71% since 1968! This is, in historical context, so horrifically bad that is ranks as one of the longest and worst episodes of inflationary misery in our history. After the paramedics have restarted your heart, tell them to stand by, because next you are going to learn that the Freebuck.com people show, and quite easily, too, that inflation is really running at 5.96%!
That 6% inflation is, coincidentally, less than the real, wallet-busting, prices-you-pay type of inflation that is roaring right freaking now! Actually, true inflation is somewhere between 7% and 11%, as far as I can tell, and I get that from looking at the checks I have to write every damned month. It is the worst in decades, judging by the number of tears that I shed while paying those bills.
Notice I said "decades," although you were probably distracted by watching the way little drops of spittle fly out of my mouth when I say it with such vehemence and how sparks of outrage are shooting out of my ears. So, I will repeat: You must save 100% of your income to stay ahead of inflation if you think you are going to work for 40 years and retire for 20.
Stop that screaming! Stop it! There! OK, now that everyone is calm, I will rise up on one Mogambo elbow, serene and smiling, to tell you that I, the Mighty Mogambo Who Loves You Like A Father (MMWLYLAF), have a solution! All you must do - and listen closely, young grasshoppers - is a little work and find that investment that is currently at the low end of its possible range of values. Stop screaming! OK, I'll tell you what it is so that you don't have to do any damned work, you lazy little bastards! OK, now that we are all quieted down again, I am talking about, of course, gold and silver and, for those of you who like the action of trading, commodities in general, especially oil.
To sort of verify that Freebuck.com inflation figure, I note that Paul van Eeden says, "The value of gold in U.S. dollars has increased at an average rate of 6.07% since 1959." How does he figure this? He explains, "The percentage increase in the price of gold in U.S. dollars is equal to the difference between the inflation rate of gold and the inflation rate of the dollar."
- There are people in the world that will tell you the truth when you ask for it. For instance, if I ask my wife if I look stupid in this snazzy new propeller beanie ("Thanks, Ben S.!"), she says, "No. Not any more stupid than usual." But if I ask my employees the same question, they are all a cringing bunch of cowards whining, "No! You look great, boss! Don't hurt me or my kids!" Venezuelan Oil Minister Rafael Ramirez is of the former, by which I mean that he will tell you the truth. I’m not talking specifically about whether or not he likes my hat, but if I ever run into him, I'll be sure ask him about it. He said that oil at these prices, "isn't a temporary thing. These prices are here to stay. These high oil prices are out of OPEC's hands."
So, here is the Mogambo Investment Tip O' The Day (MITOTD): Whenever oil falls a little bit in price, buy.
Lance Lewis of Lewis Capital, hears us talking about oil, and says, "I am becoming increasingly worried that I am wrong and that the Fed is indeed going to try and monetize the supply shock that we have seen in energy and many other commodities, as well as the coming flood of spending by the Federal government by meeting it with easier monetary policy. And that means inflation is going to accelerate." It's going to accelerate from here? Gaaccckkk! No wonder gold is soaring in price!
The practical result of inflation means that each dollar buys less, which means (if value remains constant) that oil will go up, gold will go up, silver will go up, and all things that you buy with dollars will go up in price. Welcome to the world of inflation. It’s caused by the Federal Reserve letting the banks act irresponsibly, which causes a bubble, and then their irresponsible, stupid panicked reactions to the bursting of that bubble, causes other bubbles, which grow until they are in danger of bursting…then the Fed creates more money to create more bubbles and blah blah blah!
- Peter Navarro, of the newsletter Macrowave Investor, writes, "Ironically, with the Bush administration's colossal mishandling of the crisis, Katrina may turn out to be a net stimulus. The reason: The Bushies and Republican Congress facing an unhappy electorate are going to throw gobs of money at the beast." Well, to be fair, this is what Congress does all the damn time, and that is why we are in the parlous shape that we are in. But I can tell by the look on Mr. Navarro's face that he meant that this time they are going to throw gobs of money that are bigger…much, much bigger than all the other gobs of money that Congresses and Presidents spew. I chose the word "spew" deliberately to convey a kind of vomiting, because when you know that inflation in prices will result, and a huge increase in the debt will result; and when you know that they are only creating another cohort of people who are totally dependent on more and more and more government money for the rest of their and our natural lives, then you understand why I used the word "spew." Although, this does not explain why I used the word "parlous" instead of "perilous" or "dangerous" or "asininely suicidal." If you still do not know, then try and stay alive for a few more years. Then you will grok it, meaning to completely comprehend, as they say in the novel, "Stranger in a Strange Land," which I read a long time ago, and from which I only remember the word "grok" and that it didn't have any steamy X-rated pictures in it. That is probably why I didn't finish reading it, and that is why I don't remember much.
- George Ure, in his commentary at his UrbanSurvival.com site, has looked at the just-released trade deficit figures, which were reportedly down, and how this drop is so peachy. He is not convinced. "What they don't mention up front is that the P.R. hype numbers are seasonally adjusted, while on a not-seasonally adjusted basis, the trade deficit increased again in the current reporting month from $65.095 billion last month to $66.872 billion this month. But to see the reality of the non-adjusted numbers, you have to wade all the way down to page 17." And that, buried in the report, is where you find the raw numbers, and they show that the deficit did not get better, but it actually got worse! Seasonally adjusting! Hedonic adjusting! Hahahaha! And we Americans, like the little halfwits that we are, smile that vacant little smile, and not even a cloud dims the blank, vacuous non-comprehension in our eyes. Until we get to the gas pump, and we bleat, "Hey! Why are gasoline prices so high?"
- Bill Bonner of www.DailyReckoning.com is not only a real nice guy and one of the few people who has not actually threatened me with physical violence, but also has a lot of smarts about this economics stuff. To show you this is true, he gives away, for free, a nice piece of technical analysis. Talking about how the stock market works, he said, "There are upswings that last from 15-20 years followed by downswings that last 15-20 years. After WWI, stocks ran up to the 1929 high. Then, they crashed and dragged around until the depths of WWII. After WWII began, another big surge to the upside, peaking in 1966. Thereafter, stock prices shilly-shallied around, but generally sank until 1982. In August of 1982, stocks entered a bull market that lasted 18 years. America’s stock market bubble exploded in January 2000."
And why did the market take off in 1982? Because that is when the morons in Congress authorized the explosion in retirement accounts, telling us the transparent lie that everyone can get rich by investing in the stock market. That this is obviously not true is evidence - as if you needed more evidence - that Congresspersons are idiots and liars.
Now we are in a housing bubble, and while I am impatiently waiting for a pizza to be delivered, I lied and told Mr. Bonner that I am working, working, working, and waiting for the bubble to pop. Perhaps this is why he said, "We are waiting for the bubble to (finally) pop. When it does, we expect a resumption of the bear market/recession that began in 2000/2001."
Yow! Perhaps if I had really been working, I would have seen this myself. So, what does this mean? He replies, in that calm, quiet way that he has that is made more pronounced when compared to the hysterical, screaming fits of The Mogambo, "Asset prices should deflate for at least another 10 years." Ten years of falling asset prices? Whoops!
Frank Barbera sees Mr. Bonner and me getting all the attention, and gives us a little technical analysis insight of his own. "The A/D line will normally turn down well in advance of a serious stock market decline. The very fact that the S&P, NASDAQ and Russell Indices are within a few points of matching a nearly four-year high with this indicator below zero, tells me this is a market headed for big trouble…and sooner rather than later. Over the medium-term horizon, I continue to believe the S&P 500 is forming a major top in this area and could decline fairly rapidly toward the 1065 to 1100 zone in coming months."
Then, Mr. Bonner got into reminding us about how falling birth rates are a death knell for economies that depend so heavily on workers giving up larger and larger chunks of their wages to support a monstrously large, totally dependent population. He says, "But now birthrates are falling throughout Europe. In Italy, young men stay with their mothers until they are in their mid-thirties. In Germany, women no longer marry, and no longer have children. In Spain, a catholic country that used to have the highest birthrates in Europe, the maternity wards are empty, and silent. And in today’s Moscow Times comes a report that birthrates are falling in Russia, too."
Personally, I think it is weird that people who have one kid, and thus know exactly what is involved, turn around and have more! Maybe it is some sort of mental illness. I dunno. But I sure can understand why people are not having kids anymore: Inflation. Who in the hell can afford the little brats? I mean, if you are barely keeping your head above water, even though you are borrowing money from anybody stupid enough to loan money to a deadbeat like me, what rational being would increase his costs when he or she can't even increase his or her income enough to keep from borrowing money? Maybe in the old days, when you could put them to work in the mines, or sell excess children to gypsies and maybe make a few bucks, having kids was a good idea. Or back when your welfare check increased every time you had another kid. But those days are long gone.
- My suggestion is to never get into a fistfight with Bill Buckler of the Privateer newsletter, because he is relentless. Notice the way he punches me right between the eyes without a let-up. "The U.S. new orders index fell from 69.6 to 46.5. The U.S. production index dropped from 70.5 to 56.2. The measure of prices paid by manufacturers for materials rose from 61.3 to 62.9. The employment index dropped from 56.1 to 51.7. The Chicago purchasing managers business barometer fell to 49.2 from 63.5. U.S. median household income stood at $U.S. 44,389, unchanged from 2003. These are the economic numbers of an economy stripping all its gears." By this time I am staggering and wish I had taken my manager's advice to throw the fight.
Pummeled as I am, I am in no mood to try and figure out what this means. But I do not have to get up off the canvas, or even lift a finger, as I can depend on Roger Wiegand of Trader Tracks, to do that for me. "We have previously alerted our readers to the potential of a large stock market selling event. It is our opinion the time is very close. We have worked extensively to re-check several indicators and most all of them are aligning for major stock market selling session(s). Here are the reasons for our sending this alert: Oil has bottomed and is rising again. Gold had mild selling and recovered. Today gold prices were rising in the after hours markets. The U.S. dollar is weak and getting weaker. Next we see .8500 support for the dollar. The Transportation Index fell apart and is a major Dow selling indicator when it falls. Retailing reports came in very weak. Some retail forecasters are already forecasting a weak Christmas sales event. Housing has a huge head and shoulders top and three major housing indicators all went negative. Bonds are looking weak and the very large health care sector sold off today. The pros are buying OEX PUTS with both hands."
This shows that people who are market professionals see the writing on the wall, although the writing is merely Poor Quality Mogambo Graffiti (PQMG) proclaiming, "We're freaking doomed!"
- As you know, I am a real noisy table-pounder about silver and how I think you ought to buy as much silver as you can afford, and then send it to me, addressed to "Occupant." David Morgan of the Silver-Investor.com newsletter laughs in my face when I suggest this, but implies that I am on the right track about recommending it. "One of the most incredible truths about silver is that demand has outstripped supply for 15 straight years. This trend is projected to continue for at least the next several years. As Ted Butler is fond on stating, “‘there is nothing more bullish for a commodity than such a deficit condition.’”
At this, my Feeble Mogambo Mind (FMM) laughs, as I have an obvious mental deficit. But there is nothing bullish about it, especially as compared to silver. Seeing that I am not falling for that "deficit" thing, mostly because I do not understand it, he cleverly switches tracks and says, "Another fact that is extremely bullish, but generally unknown, is that there is actually less silver bullion available for investment than gold! According to the CPM Group's Silver Survey 2003, there are approximately 400 million ounces of silver bullion and two billion ounces of gold bullion. This one fact alone should alert any intelligent investor into thinking that some silver must be held as part of one’s precious metals allocation."
This referring to "any intelligent investor" is an obvious slap in my face, and since I am really sensitive about being a brain damaged moron from another planet, I decide to turn around and leave in a huff.
But I come immediately back when he promises to show how a boom in silver is inevitable. "There will not be a sustained or substantial increase in the price of silver until the physical supply is so small that the commercial users sense a coming shortage. At that point, silver users in the automobile, defense and electronics industries will all be competing for silver at the same time that investors will sense the profit potential." And I can tell you for a fact that when lots of people with money are all bidding on a finite pool of anything, the price goes up a lot. Look at oil for a perfect example. When those people are all bidding on a small and finite pool of anything, the price goes up a lot! Mr. Morgan says, "It is with this understanding that I build my case that silver offers one of the single best long-term investments today." And since the logic is inescapable, that is what I also say, mostly because I am a low-life copycat that never has any ideas of his own. That is why I am forced to steal them from other people. In this case, it’s Mr. Morgan, to whom I am not going to apologize, since he knew what a scumbag I was before he even opened his mouth.
- All in all, my Tiny Mogambo Brain (TMB) is whirling, whirling, whirling, as there is just too much happening all of a sudden…all of it bad. Consumer confidence is low and dropping. Prices are rising. Oil is rising. Prices are rising all over the damn world. Any government dork with a government credit card is now allowed to buy anything priced less than $250,000. Congress is literally pouring money onto anybody who can spell "Katrina." Jobless claims are spiking. Two airlines are in bankruptcy. The banks (and your retirement accounts) that have loaned money to the state and local governments in Mississippi and Louisiana are going to take a huge hit when the money can't be repaid, probably necessitating bank bailouts. Terrorists are seizing the opportunity provided by our distractions and are getting more murderous. There is not one good piece of news anywhere…not one.
This, this, this is just the beginning of the ugly end-game a fiat currency, excessive fractional-reserve banking, all financing a huge government by letting Alan Greenspan and the monstrous, evil Federal Reserve destroy our money by financing the ridiculous booms of the 90's. Ugh.
***** The Mogambo Sez: Gold is, if you have been reading the newspapers, on a tear, as more people than just you and I recognize that only precious metals can save us now.
And in response to all of you who want to know if the government will again confiscate gold, the answer is "yes," but not now, nor anytime soon. One day, when consumer buying has completely dried up because nobody has any money, and the few people who do have any money cannot afford to buy anything because inflation is off the charts, the government will get the bright idea to confiscate your gold; or your house; or your car; or your retirement accounts; or anything that you have that is worth something; and put dollars in your hand, hoping that you will run out and buy something.
That this day is coming is foreordained, as there is no way - no freaking way, no freaking way in hell - to stop the collapse of the despicable economic system that has evolved in this country. If there was a way - any way at all - then one other country in the whole history of countries that have gotten themselves into this kind of mess, would have thought of it by now. None have, although they have tried everything, even the stuff that they already knew would not work. Then they went to war. Which merely finished them off.
Welcome to fiat currency, fractional-reserve, deficit-spending hell. They call it "hell" for a reason.
Rogue
Dr Doom expects trouble between US and China
Posted: 2005-09-23 23:58 --------------------------------------------------------------------------------
http://transcripts.businessday.co.za/cgi-bin/transcripts/t-showtranscript.pl?1127589415
Presenter: Lindsay Williams Guest(s): Dr Marc Faber
Swiss-born Hong Kong-based economics expert Dr Marc Faber says that the US and Chinese may yet end up at war over dwindling oil reserves. Dr Faber is author of the Gloom, Doom and Boom Report - and author of bestselling book Tomorrow’s Gold. Classic Business Day speaks to Dr Doom, in South Africa to address an investors’ conference
LINDSAY WILLIAMS: I was lucky enough to MC a conference in Cape Town yesterday at which Dr Marc Faber was the keynote speaker - forthright views were forthcoming on a variety of subjects ranging from commodity prices to George W Bush and Russia! Marc, I enjoyed your 35-minute address yesterday - we’ve only got 10-minutes today. Can we start with commodities - are we still in the midst of a bull market in commodities?
MARC FABER: Basically commodity cycles last a long time - 45 to 60 years. They are price cycles, and not business cycles - if we take the last peak in commodity prices as 1980, then we had a bear market in commodities that ended in 1999 to 2001 when commodity prices adjusted for inflation, or commodity price in real terms were at the lowest level in the history of capitalism. Oil touched $12 a barrel, and gold was selling for around $250 an ounce - since then we had a big move in commodity prices, and I think we have probably in terms of industrial commodities such as oil, copper and so forth - we are in the process of completing the first leg of this bull market that can be followed by a meaningful correction. I wouldn’t be surprised to see oil down to $40 to $45 dollars, and copper down 30%. That wouldn’t change the long-term favourable outlook for commodities, and I think that investors have to be positioned with the view that commodity prices will rise over the next 10 to 20-years, which will have indications on the other investment markets as well such as bonds and equities.
LINDSAY WILLIAMS: If I can just stay with commodities for a while, you talk about industrial commodities being very close to completing the first leg of the boom - what about other commodities, for example precious metals and agriculturals?
MARC FABER: Basically precious metals like gold, silver and platinum are in many cases not really just precious metals, but also currencies. I would say in the world today we have a few large currencies - the US dollar, the euro, the yen and the Chinese yuan - and these are paper currencies where incompetent central bankers can increase the supply limitlessly. On the other hand gold has a very definite and finite supply - of around 2,500 tons per annum - and therefore per ounce of gold there has always been more and more paper money created. I think that the gold price increase since 2001 is reflecting the reality that central bankers are printing money - and I would imagine that gold prices in your and my lifetimes, since we’re so young, will be much higher than what it is now, expressed in US dollar terms. Agricultural commodities are interesting in the sense that all commodity prices went up in 2004 - but the agricultural commodities, and also cotton went down by approximately 20% to 30% - therefore corn, wheat, soybeans are extremely inexpensive compared to say oil, or compared to other industrial commodities. In fact grains are at a 200-year low vis-a-vis oil - so as a long-term investor I would also consider buying some agricultural commodities.
LINDSAY WILLIAMS: Moving on to the bond and stock markets - the Dow Jones and the S&P have essentially gone sideways for many years now. What is the prospect for them?
MARC FABER: Basically we had this huge bull market in financial assets - 1982 when the Dow Jones was selling at around 800 and yielding 6% with a PE of seven times depressed earnings, and when the Dow Jones was no higher than it had been in 1964 - and adjusted for inflation, or in real terms it had declined by 70%. Since 1982 we had this huge increase in equity prices - whereby the Dow is now around 10,000 and the S&P around 1,215 and bond yields fell from 15.84% in September 1981 to as low as presently around 4.5%. I think this bull market in financial assets is pretty much over - the most favourable environment for financial assets are declining commodity prices as happened for instance between 1921 and 1929, in the previous century after 1864 we had a huge bull market to 1873. If we assume that commodity prices are now in a secular, or long-term upward move then obviously bonds are unattractive and equities largely unattractive also - because commodity prices go up they lift up interest rates, inflation accelerates and so the PEs (the valuations of equities) shrink.
LINDSAY WILLIAMS: I was reading your latest newsletter - where you talk about a trip that you’ve just completed in Israel and Iran - leading on from that what about political instability worldwide? At the conference yesterday you were talking in fairly forthright terms about the possibility of there being a major conflict quite soon - maybe you could expand on that for us?
MARC FABER: Basically the US has the naive belief that they won the cold war, but if you look at what happened after the cold war - the breakdown of communism, socialism, and the end of policies of isolation in India - you have over 3-billion people joining the world’s market economy, the capitalistic system, and it is remarkable how in China and also India and Russia per capita incomes have expanded since then. In China per capita incomes in real terms are doubling every ten years - and so these economies, in particular the Chinese economy has become huge. There are many markets in China - such as steel, cement, mobile phones, tobacco, beer - that are far larger than in the United States. So you have this rising China which then leads to a tremendous appetite for raw materials - and the rising commodity prices reflect the incremental demand for commodities coming from Asia, notably China, and so China’s top priority is to acquire resources. One of the reasons the Chinese are very interested in the African continent - it’s a very symbiotic relationship between Africa and China - they also obviously need oil, and oil comes from the Middle East to China. That leads to tensions with the United States because the US wants to largely control the supply of oil. The shipping lines go essentially through the Strait of Malacca - this is a strait that is only 1.5-miles wide where an American aircraft carrier could essentially block all oil shipments to China. Then it goes south to the Island of Taiwan - which leads the very important strategic position of Taiwan for the Chinese, incidentally also for the Japanese. So the US now has this strategic alliance with Japan - whereby they said they would defend Taiwan in any circumstances. The Chinese have become very close to the Russians - they had joint military exercises in July. The Chinese - having a border with Central Asia are of course very interested in Uzbekistan, Iran, Kazakhstan, Tajikistan, and Kurdistan. At the present time we have the American bases there - obviously the Chinese as well as the Russians are very eager to get the Americans out of that region. So I think that in the context of rising commodity prices, and in the context that show there is tightness in the market, and in the context of the hegemonic power of the US being challenged increasingly by the rising Chinese economy that has a much faster growth rate - that international conflicts will be inevitable in the long run. I’m not saying that World War Three will break out tomorrow - but I think that eventually we will have involvement of the Chinese and the Russians in the Middle East as well as the Americans - and this involvement will not be a joint exercise, but will be against each other.
LINDSAY WILLIAMS: You said a few things about George W Bush yesterday - your opinion of him as a US president?
MARC FABER: My opinion of him as a president is that he makes everybody else in the world look like a genius!
--------------------------------------------------------------------------------
Rogue
SSKILLZ1....It's "ROGUEDOLPHIN", not "ROUGEDOLHPHIN"!!!
Please make appropriate correction! LOL!!
Here's a little tidbit on the interesting creature in the dolphin society...
http://www.waterexplorer.com/il_dol03.htm
Rogue
Why the World Is One Storm Away
From Energy Crisis
from WSJ
With Demand at Record Level,
Disturbances Take Toll;
Refining Capacity Stalls
Oil Workers Evacuate for Rita
By CHIP CUMMINS in London, BHUSHAN BAHREE in New York and JEFFREY BALL in Dallas
Staff Reporters of THE WALL STREET JOURNAL
September 24, 2005
As Hurricane Rita barrels through the heart of the U.S. oil industry, the world once again finds itself just a storm away from an energy crisis.
Whether or not Rita is that storm -- it was downgraded to a Category 3 hurricane yesterday afternoon -- it and Hurricane Katrina have driven home a hard lesson: In a world straining at the limits of oil supply, even relatively small disruptions can drive prices haywire and ricochet among consumers and companies. That has long-term implications for consumer and corporate spending and U.S. energy policy.
• Oil refineries at risk
As devastating as Katrina's human toll was, the storm should have been a relatively small disruption for the global petroleum system. Though Katrina sank more than 50 oil and natural-gas production platforms in the Gulf of Mexico and knocked out about 1.5 million barrels of daily oil production, the storm was only 10th on a list of 11 top shocks of recent decades, according to the International Energy Agency.
Yet Katrina had a wide impact because it hit at a time when markets for crude oil are the most stretched they've been in a generation. The global energy system that has powered the world economy for 25 years is severely strained. Demand for oil is growing faster than supply, thanks to America's love of sport-utility vehicles and China's booming economy and embrace of the passenger car.
Globally, producers today have at most 1.5 million barrels of spare crude-pumping capacity to tap in a crunch -- about the same amount currently shut down by Katrina and Rita. A cushion of at least 4% of demand, or roughly 3.5 million barrels these days, is needed to really insulate consumers from supply shocks.
That in part explains the worries that surrounded Rita as it swept across the Gulf of Mexico this week. As of late yesterday, the storm was expected to make landfall early this morning in eastern Texas. (See related article.)
Together, the summer storms have stoked growing unease that the world is vulnerable to even minor supply shocks. And there isn't a quick way to square the circle -- beyond, perhaps, a permanent increase in prices that would chill demand.
"There is no magic bullet," says John Browne, the chief executive of BP PLC. "You can't just fix one thing."
Ultimately, the prospect of an energy crisis depends on a few big factors: whether the industry can develop fresh crude supplies fast enough, whether demand can be tamed and whether the global refining bottleneck can be broken.
On the supply front, the outlook for quick relief is bad. The cheap gas prices of the 1990s prompted oil producers to cut costs, limit investment on exploration and production and consolidate through mergers. They also began using high-tech management systems to reduce their stockpiles of crude oil and gasoline, mirroring the just-in-time technology that Dell Inc. and others used to cut costs.
That approach has left much less cushion when a disaster knocks out fuel production. Gasoline inventories for the first six months of 2005 averaged 23.9 days of demand, down from 27.8 days in the first six months of 1995, according to the Energy Information Administration.
With oil demand soaring, investment in new production has been picking up again. Today, tiny Qatar is expected to unveil a $110 billion project-finance deal which is to fund, among other things, a $50 billion slate of new oil and gas projects. Saudi Arabia has said it will spend $50 billion to boost its pumping capacity by 1.5 million barrels a day and to build other petroleum facilities, including refineries.
Oil companies are investing heavily, too. Chevron CEO David O'Reilly said this week his company and other big oil majors are set to invest $250 billion in new projects in the coming three years.
But because it takes up to a decade to bring a big new oil project on line, it's unclear when this investment can bring relief -- especially if demand keeps soaring. While global demand for oil grew by 2.9 million barrels a day last year, Thierry Desmarest, chief executive of French giant Total SA, estimates oil producers can realistically provide at most 1.5 million to 2 million barrels a day of extra oil each year.
"More than that is not possible," Mr. Desmarest said in an interview this month. Because of production declines in existing fields, Mr. Desmarest said, the oil industry now faces a "difficult challenge" even if world demand moderates.
The fallout from Rita on supply will take days to assess. Investors were jittery earlier this week, but yesterday prices of crude oil and natural gas eased a bit as Rita was downgraded. (See related article.) Late yesterday, Transocean Inc. said one of its rigs, the Deepwater Nautilus, broke free of a towboat and was floating about 40 miles south of Grand Isle, La., in an area lashed by heavy winds and waves. (See related article.)
But even if damage is minimal, Rita already has caused a shudder. Oil production was shut across the Gulf in preparation for the storm. Sixteen refineries from Houston to Lake Charles, La., were closed, and thousands of oil-industry workers evacuated from the area. That meant that a quarter of U.S. capacity to turn crude oil into gasoline, diesel and other products wasn't working yesterday.
And oil is only one concern. The storms also have dealt a blow to natural-gas output likely to last well into this winter. More than two-thirds of all gas production in the Gulf -- about 20% of U.S. domestic gas output -- is shut down, and Rita traveled right through an offshore area that mostly produces natural gas and is filled with aging, vulnerable platforms. Used by millions to heat their homes, gas also fires a big chunk of the power plants across the nation.
Natural-gas inventories have dropped below those at this time last year, as prices have soared. And the U.S. can't easily remedy short domestic supplies with imported natural gas, since the nation has just four specialized terminals to receive liquefied natural gas imports and they already are importing as much as they can find. Instead, the U.S. depends on domestic production and Canadian imports for most needs.
On the demand side, the U.S. is the sight of the world's most dramatic battle. It represents 4% of the world's population but burns 25% of its oil -- half of it going to power cars and trucks.
Over the past two decades, the auto industry has aggressively marketed gas-guzzling SUVs and pickup trucks while Washington has flinched at consumption-curbing prescriptions, such as high gasoline taxes and increased mileage standards, that have checked demand in Europe and Japan.
As a result, the fuel economy of the average new vehicle sold in the U.S. has flat-lined at about 25 miles per gallon. Larry Goldstein, president of the Petroleum Industry Research Foundation, a New York-based group, estimates U.S. gasoline consumption would be 20% lower than it is now if Americans drove roughly the same-size cars they were buying a decade ago.
Recently, there have been signs Americans are growing more concerned about fuel economy. Sales of big SUVs have been declining, while auto makers report that fuel economy is registering as a rising priority in surveys. This week, Ford Motor Co. announced a major boost in its production of more efficient hybrid gasoline-and-electric vehicles.
But the Bush administration has taken only baby steps, such as raising the light-truck mileage standard to 22.2 miles per gallon in 2007, from the 20.7 that had prevailed since 1996. Federal gas taxes to discourage usage, meanwhile, remain a hot potato, especially with prices rising.
This week also highlighted the industry's aging and overstretched gasoline-refining system. All the crude oil being pumped out needs to be refined, but there's a bottleneck of plants to do that.
Oil companies have been loath to invest in new refineries to turn crude into gasoline, scared off by the massive capital investment required, constantly changing environmental rules and stiff opposition from local citizens groups and environmental organizations. It's been nearly 30 years since a new refinery was built in the U.S.
That has meant that a third of U.S. refining capacity is now concentrated on the Gulf Coast, where the economies of Texas, Louisiana and Mississippi are heavily dependent on oil. And even before the two recent storms, refineries were running flat out.
The industry doesn't expect the "not in my back yard" mentality to go away any time soon. At a conference at New York's Waldorf Astoria hotel in April of last year, Saudi Arabia's oil minister, Ali Naimi, proposed that his country build two giant refineries in the U.S. Each would process 500,000 barrels of crude a day -- roughly the amount of gasoline the U.S. imports.
"Whether we will be able to get permits is another question," Mr. Naimi told his audience, amid snickers from executives and officials.
"Good luck," said Kyle McSlarrow, at the time deputy U.S. Energy Secretary, who was sitting next to Mr. Naimi. "If you can figure out [how]," he said jokingly, "let us know how you did it."
--Thaddeus Herrick in Houston, Russell Gold in Austin, Texas and John J. Fialka in Washington contributed to this article.
Rogue
Cheaper Oil May Not Sink Energy Stocks
from Barron's
By DIMITRA DEFOTIS
FOR NERVOUS NELLIES WORRIED ABOUT how to invest in energy if the latest oil price bubble bursts, the past may be prologue.
In 2001, a recession helped crude prices drop 26%. And while the economy today is still growing at about 3% a year, the sharply higher costs of running a car, heating a home and delivering goods could crimp consumer spending.
That in turn could curb oil demand and push prices below $50 per barrel in the coming year, from nearly $70 now.
Meanwhile, high oil prices are encouraging investment in fuel-efficient hybrid automobile engines and liquefied natural gas technology that ultimately may reduce reliance on crude.
"We believe the average price of oil will be $50 and it will spend 70% of the time between $40 and $70 -- at least in the next five years," says Waqar Syed, an oil field services and drilling analyst at energy research firm Petrie Parkman.
When prices have fallen in the recent past, shares of exploration companies have suffered more than those of refiners and large, integrated firms that operate in both those businesses.
This week, oil prices were rising again as Hurricane Rita threatened to damage oil production and refining facilities in Texas and the Gulf of Mexico.
To help curb prices, the Organization of Petroleum Exporting Countries said Tuesday it could produce two million barrels a day of remaining spare capacity, although some industry observers questioned OPEC's ability to do so.
Longer term, higher oil prices should generate more production, and energy prices will find a floor near $40 per barrel, says Zack Schroeder, an energy analyst at BB&T Asset Management.
High energy prices are having less impact on the economy than they did in the 1970s, when energy comprised roughly 8% of U.S. consumer spending, versus 2% to 3% now, says Bernard Picchi, senior energy analyst at Foresight Research Solutions (see Weekday Trader, "Letting the Gas Out of Oil Price Fears," June 1, 2004).
But extremely high energy prices or major supply interruptions still could trigger a recession, and crude prices would tumble, Picchi says. He thinks they could fall to $50 a barrel for six months or a year.
Oil prices hit roughly $26 per barrel in December 1996 before dropping nearly 60% through November 1998.
When Oil Prices Fall
A look at how various energy stock sectors performed in years when the price of oil fell.
Total Returns, Including Dividends
Energy sector 1997 1998 2001
Drillers 53.1% -64.10% -26.50%
Exploration/production (large Canadian) -14.0% -23.90% -14.00%
Exploration/production (large U.S.) -5.0% -32.60% -17.60%
Integrated (Canada) 37.8% -6.40% 19.70%
Integrated (International) 19.7% -5.10% 5.30%
Integrated (U.S., majors) 22.0% -8.20% 0.10%
Refiners 26.4% -30.90% 20.90%
Services/equipment 42.9% -51.40% -27.20%
Crude Oil Price Change -31.9% -31.50% -26%
Source: John S. Herold research
In November 2000, prices peaked at $34 per barrel before falling 42% through January 2002, according to Thomson Financial/Baseline.
In each case, increased OPEC production was a big factor behind the price drop. In 2000-2002, a U.S. recession weakened global demand.
Historically, as oil prices fell, investors flocked to integrated oil companies for their dividends, strong refining margins and breadth of global exploration activities.
Shares of major international integrated oil companies rose roughly 20% in 1997 and fell less than other energy sectors did in 1998. They held up well in 2001, too, especially those based in Canada.
During each of the two big recent price declines, shares of refiners produced double-digit returns, while exploration companies consistently showed double-digit declines, according to John S. Herold, an independent energy research firm (see table, "When Oil Prices Fall").
"If you think prices are going to fall, we think margins are moving to natural gas and refining," says David Talbot, an energy investment strategist at Herold.
The integrated oil companies are among the biggest refiners and natural gas producers worldwide.
"Where would I want to hide? BP, Royal Dutch Shell, Exxon Mobil," Talbot says.
In the current cycle, producers are finding it harder and more costly to replace depleting supplies. That's why some think demand and prices for services companies -- and their stock prices -- should hold up.
"If oil prices decline, oil stocks will decline, too, but you will still have tremendous demand for oil services as long as oil is above $40 a barrel," says Don Hodges, a Dallas-based co-manager of the Hodges Fund.
He says he bought shares of mid-cap global offshore drilling services company Ensco International this week and recently added Schlumberger, a large global oil and gas services firm, to his portfolio.
"The services sector has to keep working even if the oil price comes down, because worldwide demand and supply are so close," says Sarah Hunt, an analyst at Capital Management Associates, a New York money management firm.
Of course, peak oil theorists and some Wall Street firms like Goldman Sachs expect oil prices to top $100 a barrel. And heavy demand from rapidly industrializing countries like China and India could keep prices high.
So, even if oil prices fall, they are unlikely "to crater as they have in the past," says David Kelly, chief economist at Putnam Investments.
That could mean a boon for all energy sectors, bucking historic trends.
But if history is any guide, at some point energy investors may shift to integrated oil companies, refiners and some services companies to brace themselves against the long-term storm -- an economic slowdown leading to lower oil prices.
Rogue
Best-Laid Plans Weren't Enough in Texas By ERIN McCLAM, AP National Writer
Fri Sep 23, 7:59 PM ET
****Rogue comment.....check out the photo on the page bottom. All those big gas-guzzling SUV's laying "dead" and out of fuel on the side of the road!! We are in for some "reckoning" in this country. We've been in denial for too long.
http://news.yahoo.com/s/ap/20050923/ap_on_re_us/rita_texas_exodus_hk1
HOUSTON - It was envisioned as the anti-Katrina plan: Texas officials sketched a staggered, orderly evacuation plan for Hurricane Rita and urged people to get out days ahead of time.
But tangles still arrived even before the storm's first bands. Panicked drivers ran out of gas, a spectacular, deadly bus fire clogged traffic, and freeways were red rivers of taillights that stretched to the horizon.
In an age of terrorist danger and with memories of the nightmare in New Orleans still fresh, the Texas exodus raises a troubling question: Can any American city empty itself safely and quickly?
Thousands of drivers remained stranded Friday to the north and west of Houston. Many were stuck in extreme heat, out of gas — as gas trucks, rumored to be on the way, or at least buses to evacuate motorists, never came.
They were frustrated, angry and growing desperate, scattered and stranded across a broad swath of the state as the monster storm bore down.
"It's been terrible, believe me," said Rosa Castro, who had driven more than 17 hours by Friday. Her sister behind the wheel, seven children in tow, the car was idling on less than an eighth of a tank of gas.
Castro was hoping to get gas from a lone Shell station that had opened north of Houston. But her car was at the end of a miles-long line.
"I wondered why so many people in Katrina didn't move in time, and now I'm in the same situation," she said. "All I have is cash, clothes and God."
Houston is a landlocked city, an hour's drive from the Gulf of Mexico. Besides Houston's 4 million people fleeing, as many as 2 million were trying to get out through Houston from the coastal side.
In Galveston County along the Gulf, authorities set up three evacuation zones, beginning Wednesday evening and staggered at eight-hour intervals, with the most outlying areas to be the first to leave. But people in all three zones left early anyway, further snarling traffic.
From Houston, the main roads out of town — Interstate 10 to San Antonio, I-45 to Dallas, and U.S. Highway 290 to Austin — were turned into one-way thoroughfares only Thursday, and even then the one-way flow began well outside Houston.
"There were some weaknesses," Texas Rep. Sheila Jackson Lee (news, bio, voting record), a Democrat, acknowledged to KTRK-TV on Friday. "We could have fixed some of the elements ... a fuel truck that works, a mechanical system that works, and opening the contraflow," the term emergency officials use for routing all lanes in one direction.
Later in the day, Jackson Lee told The Associated Press the state should have asked the Federal Emergency Management Agency for supplies. "I'm marching people all over looking for gasoline," she said.
Republican Texas Gov. Rick Perry said Friday decision to order one-way flow came after the storm, originally on a track south of Houston, changed course and headed toward Houston instead.
"It's not perfect," he said. "I wish I could wave a magic wand and somehow transport people magically from Houston, Texas, to Dallas or other points, but that's not the fact when you have the type of congestion that you see in the state of Texas on a daily basis."
He added: "I think when you look behind later, it will be almost miraculous that this many people were moved out of harm's way."
State emergency management coordinator Jack Colley said 2.5 million to 2.7 million Texans had already been moved out of harm's way, and the governor said 25 buses would canvass Beaumont, looking for people still trying to get out.
By midday Friday, lanes were restored to normal traffic. County Judge Robert Eckels said traffic had cleared and authorities needed lanes in both directions for emergencies. Still, many remained stranded beyond Houston's suburbs.
Before the late 1990s, emergency management officials were in charge of evacuations, and transportation engineers had little interest.
But those engineers have devoted great energy to the problem since Hurricane Georges forced an evacuation of New Orleans in 1998, and Hurricane Floyd an evacuation of the Carolinas in 1999.
Rita and her hellish predecessor, Katrina, come in the new age of terror, as authorities try to draw up plans for clearing out cities in the event of deadly strikes with unconventional weapons.
Still, experts say the massive coastal zone that needs to be cleared of people before a major hurricane is far larger than the area to be evacuated after an industrial accident or a terror attack.
In the event of a nuclear accident, federal rules require the evacuation of a 10-mile radius around the plant. After a so-called "dirty bomb" nuclear detonation or the release of chemical or biological weapons, only the region immediately downwind of the release point would have to be cleared.
"Natural disasters just dwarf anything that's manmade," said Reuben B. Goldblatt, a partner at traffic engineering firm KLD Associates in Commack, N.Y.
Brian Wolshon, a professor of civil engineering at Louisiana State University, said Texas officials "will probably see there were things they could have done better."
But he added: "It's not economically or environmentally feasible to build enough roads to evacuate a city the size of Houston in a short time and with no congestion. It's just not going to happen."
It was a point all too clear to Bruce French, who left his home in Clear Lake, Texas, early Thursday, and ran out of gas just past Conroe, far short of his destination of Dallas. On Friday morning, he was stranded, waiting for fuel.
"They're giving $10 worth of gas if you're on empty and $5 if you have some," he said. "That's not going to get you very far."
___
EDITOR'S NOTE — Associated Press writers Kristen Hays in Houston, Liz Austin in Austin and Suzanne Gamboa in Washington, National Writer Matt Crenson in New York and photographer Paul Sancya contributed to this story
Rogue
The Great Zero-Sum Game: China and the U.S. Vie for Oil Resources
By David Stanway
23 Sep 2005 at 07:42 AM EDT
SHANGHAI (Interfax-China) -- A few years ago, five previously unknown authors caused a media sensation by publishing China Can Say No!, a nationalist and non-Party screed that railed against the perceived ill-treatment of China by the United States. The feelings have remained popular, and can now draw on the bombing of the Chinese embassy in Belgrade in 1999, the shooting down of a U.S. spy plane over Hainan Island in 2001, and the rejection of the bid for the California-based Unocal by the China National Offshore Oil Corporation (CNOOC) [NYSE:CEO].
For China, the regular reports by the U.S. administration on subjects including China's human rights record, its increased military spending, or its violation of intellectual property rights, all serve as further evidence of victimization. With the growing number of critical reports in U.S. media and government circles about China's efforts to secure resources in countries like Sudan, and about its growing impact on world oil prices, China's sense of injustice also extends into the world of energy, arguably the most politicized industry of them all.
This week, one of the authors of China Can Say No!, Song Qiang, told reporters that the attempted acquisition of Unocal by CNOOC proved one of their main theses, that the U.S. - in its attempt to "contain" the growing influence of China - was not playing by the rules of the game.
That sentiment, of course, was expressed all throughout CNOOC's ill-fated bid, especially when the honorable members of the U.S. Congress began urging the administration to step in and block the Chinese company. Academics, government officials and angry contributors to the nation's online bulletin boards shared the general opinion that the U.S. was bucking the market in order to serve narrow political interests.
China's offshore oil monopoly was engaging in "ordinary commercial practices," said a number of figures ranging from CNOOC head Fu Chengyu to Foreign Affairs Ministry spokesman Liu Jianchao, while the opponents in the U.S. were once again using the "China Threat Theory" to justify non-market tactics.
Statements from Congress and the House of Representatives demanded that the administration reject the CNOOC bid on the grounds that it involved strategic national interests, and that the Chinese company was being financed by soft government loans. Reports in the right-wing press even claimed that some of Unocal's overseas holdings involved sensitive mineral resources that could be used to make advanced weaponry. In the end, the matter did not require the direct intervention of the U.S. government. The Unocal board, worried by the political implications of the CNOOC offer, agreed to accept the lower bid by the Chevron Corporation.
China commonly expresses its opposition to the U.S.'s "politicization" of the energy industry. China also saw the hand of the United States in the efforts by Japan to secure an oil pipeline from Siberia to Russia's eastern Pacific coast, a route that would delay the plan to construct pipelines to Daqing in northeastern China. It also worries about clandestine U.S. activities to undermine the left-wing government of Hugo Chavez in Venezuela, which is in favour of boosting oil exports to China.
Securing Oil at the Source
The U.S. has been criticizing China for attempting to "secure oil at the source." China's state-owned companies are being encouraged to "go overseas" and buy stakes in exploration and production projects, including those in "countries of concern" such as Sudan and Iran.
The U.S. Deputy Secretary of State Robert Zoellick said two weeks ago that China would be increasingly in conflict with the U.S. if it continues to pursue energy deals with "problematic" countries. China's Foreign Affairs Ministry spokesman, Qin Gang, replied by saying that China has no intention of "plundering" the world's energy resources, and was merely seeking "constructive cooperative relations" and "peaceful and mutual development".
But Zoellick's fears have considerable resonance in the U.S. Former U.S. President Bill Clinton, speaking at a forum in Hangzhou last weekend, also expressed his worry that China's efforts to secure oil were misguided. The scarcity of world oil resources will "make conflict far more likely," the former President said, especially with China trying to buy up oil fields around the world.
The U.S.-China Economic and Security Review Commission said in its latest report to the U.S. Congress that China's growing energy demand was posing a direct threat to U.S. economic security. It was also pursuing the morally-dubious strategy of buying up stakes in oilfields in "countries of concern to the United States" and working on the basis of bilateral agreements rather than established international mechanisms. By locking up resources in countries such as Algeria, Azerbaijan, Ecuador, Kazakhstan, Myanmar, Thailand and Venezuela, as it had done in the previous year, it was acting against the interests of the international community, especially net-importing countries.
Many Chinese observers express surprise about the fuss. "It's necessary for Chinese companies to enlarge overseas oil investment to diversify the supply structure instead of merely relying on oil trading, which is far from enough," said Wang Zheng, the head of the Business Management School of the China Petroleum Institute, in a conversation with Interfax.
"Apart from the Middle East, which is mainly occupied by the U.S. and UK, China has to find a breakthrough for its oversea oil asset acquisitions, including countries in Africa, southeastern Asia, Central Asia and South America, some of which are not in harmony with the U.S. China is looking for cooperation partners based on the actual situation and is looking for economic benefit only," said Wang.
Wang also suggested that the U.S. is exaggerating the capabilities of Chinese companies. "Compared with the world's leading oil companies, domestic oil companies are 10 times behind in assets, corporate governance, financing and so on," said Wang.
Venezuela
China's increasing interest in the oil resources of Venezuela has been given a great deal of attention in the United States, with many worried that in the "zero-sum game" of energy politics, oil that was previously sold on the U.S. market will be diverted to China by Hugo Chavez's government, which is generally hostile to the current administration in Washington.
But the possibility, expressed frequently in the U.S. media, that Chavez would seek to divert exports from the U.S. market to the Chinese one is not high, said a senior U.S. State Department official on Tuesday. The U.S. already has strong advantages over China when it comes to the oil resources of Venezuela, he noted.
According to U.S. media reports, Charles Shapiro, a senior Western Hemisphere specialist at the State Department and also the former U.S. ambassador to Venezuela, told a Senate panel on Tuesday that China's increasing interest in Venezuelan oil is unlikely to have any effect on U.S. supplies, given U.S.'s favorable geographical position, suitable refinery facilities and a larger scale of investment in Latin America.
Shapiro said that the U.S.'s oil refineries are especially designed to refine heavy Venezuela crude oil while Chinese refineries would require an investment of billions of dollars. Overall Chinese investment in Latin America and the Caribbean is small compared with that of the U.S., he added.
Robert Forden, the deputy director for China at the State Department, told the panel that there was no evidence that China's increased investment in the region meant that it was trying to meddle in Latin American political affairs. He said its motives were primarily economic.
A Chinese energy expert told Interfax that China's investment in Venezuela was a normal commercial matter and would not necessarily reduce Venezuela's oil exports to U.S.
"US and Venezuela have been in close energy cooperation for a long time and around 15% of the U.S.'s total oil demand is imported from Venezuela. After Hurricane Katrina, Venezuela also provided aid to the U.S. very actively," Niu Li, the global energy expert with the State Information Center, told Interfax.
"Venezuela will not reduce oil exports to the U.S. merely on the basis of political concerns. They will decide oil deals on the basis of economic interests," said Niu. He added that "it is very normal for China to invest in Venezuela," which is rich in oil resources.
PDVSA, the Venezuela state oil company, opened a commercial office in China on August 22 with the aim of improving the market for Venezuelan oil in Asia. It was a significant step forward after the two countries signed the "Memorandum of Understanding on Greater Cooperation in the Energy Sector" during the visit paid by Hugo Chavez to Beijing in December 2004.
During Chavez's visit, the China National Petroleum Corporation (CNPC) signed cooperation agreements with PDVSA regarding the joint exploration of the Zumano Oilfield in eastern Venezuela and the surveying of the Orinoco Oil Belt Block Junin 4.
Rafael Ramirez and Ma Kai, the head of the National Development and Reform Commission (NDRC), China's industry watchdog, also confirmed that they would implement measures to supply hydrocarbons to China in excess of 300,000 barrels per day, or 15 million tonnes per annum, within the next few years.
The Battle for Central Asia
Central Asia contains some of the world's most promising new oil resources, particularly around the Caspian Sea. It has therefore become one of the major geopolitical battlegrounds, with China and the U.S. joining regional players like Iran, Kazakhstan and Russia in the battle for power and influence. China hopes eventually to be the beneficiary of a trans-Asian pipeline network connecting its interests in Iran to pipelines running the breadth of Kazakhstan and entering China through Xinjiang in the northwest. The U.S., on the other hand, would prefer a pipeline connecting the Caspian Sea with Turkey and Europe, or heading south to the Indian Ocean through Afghanistan and Pakistan. Russia, anxious not only for political influence, but also for the lucrative transit fees, would prefer Kazakh oil to be fed into existing pipelines heading north.
Two of China's major oil companies, Sinopec [NYSE:SHI] and CNOOC, were blocked in their efforts to secure a stake in the Kashagan oilfield in the Caspian Sea in 2003, but political efforts by China paid off earlier this month when the Kazakh government agreed in principle to allow Sinopec and CNOOC to explore the Caspian region.
Global Oil Prices - Who's to Blame?
As Interfax reports this week, a senior member of the Chinese government has again spoken out against the allegations that China itself is responsible for the spike in global oil prices. Xu Dingming, the head of the NDRC's Energy Bureau, hinted that the U.S. was actually using high oil prices as a way of undermining the Chinese economy.
"Petroleum has changed from a normal commercial product into a weapon. The main beneficiaries of high oil prices are the U.S. and other oil producing countries," he said at a conference.
The International Energy Agency is among a number of voices suggesting that the current high price is a result of China's increasing demand, and its desire to build up those strategic reserves. China has also denied the latter point, saying that it will not boost its strategic reserves by buying expensive oil from the international market.
Other Chinese officials stress that Chinese demand is still nothing compared to the U.S. Zhou Dadi of the NDRC Energy Research Institute said that Chinese imports are still only a seventh of the world total, and that China's impact on the world market is still lower than Japan.
Sino-U.S. Cooperation
Wang Zheng, the head of the Business Management School of the China Petroleum Institute, told Interfax that cooperation as well as competition is crucial for both the U.S. and China.
"The increasing energy demand in recent years has made China realize the importance of energy and also the cooperation with U.S. There are more signs that two countries are reinforcing the energy dialogue," said Wang.
Wang mentioned to the first Sino-U.S. energy dialogue held in Washington in late June by Zhang Guobao, the vice director of the NDRC, and the U.S. Secretary of Energy. The U.S. Energy Department established a Beijing representative office at the same day.
"However competition is also unavoidable in the future as the two countries are both big energy consuming countries," said Wang.
Niu Li of the State Information Center agreed that there was a great deal of room for cooperation between the two countries.
"We should not always politicize these issues. We should see that there is huge room for Sino-U.S. cooperation. Actually we have already launched collaboration in the fields of new energy and environmental protection," said Niu.
Niu also agreed that while China's increasing energy demand will unavoidably lead to competition with the U.S. in the global energy market, China's energy import portion in the global market is still very small compared with U.S. and the country's general energy policy is to 'be based on domestic supplies' so the competition is not going to be fierce. (With additional reporting by Winnie Zhu)
© InterFax-China 2005. For more intelligence on Chinese metals and mining, click here or call Alison Crawford in London on +44 (0) 20 7256 3919.
Rogue
Rita Weakens, Takes Aim at Oil Industry By MICHAEL GRACZYK, Associated Press Writer
18 minutes ago
HOUSTON - A slowly weakening Hurricane Rita steamed toward the Texas and Louisiana coast with 125 mph winds Friday, menacing the nation's oil-refining industry.
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Rita weakened during the day to a Category 3 hurricane, down from a fearsome Category 5 with 175 mph winds on Wednesday. It was expected to come ashore early Saturday along the upper Texas-Louisiana coast on a course that could spare Houston and nearby Galveston a direct hit. But it could plow instead into the oil and chemical centers of Beaumont and Port Arthur, about 75 miles east of Houston.
"We're going to get through this," Texas Gov. Rick Perry said. "Be calm, be strong, say a prayer for Texas."
Also Friday, as many as 24 people were killed when a bus carrying nursing-home evacuees caught fire in a traffic jam.
In New Orleans, Rita's rains breached a patched levee, sending water spilling into the hard-hit but largely empty Ninth Ward just days after the neighborhood was pumped dry. The water gushed through gaps at least 100 feet wide and was soon waist-deep in the streets.
However, officials with the Army Corps of Engineers there was no immediate indication the rest of New Orleans was in danger from the flooding.
Texas' emergency management coordinator, Jack Colley, predicted Rita would destroy nearly 5,700 homes in the state and cause $8.2 billion in damage.
President Bush planned to visit his home state but canceled at the last moment. The White House said he did not want to slow down the storm preparations.
More than 3 million people along the Texas and Louisiana coasts were urged to get out of the way of Rita, setting off an unprecedented exodus that brought traffic to a standstill across the Houston metropolitan area. Cars overheated and ran out of gas in 10- and 12-hour traffic jams. Some drivers gave up and turned around and went home.
"It can't get much worse, 100 yards an hour," fumed Willie Bayer, 70. "It's frustrating bumper-to-bumper."
By Friday morning, the freeways within Houston had cleared out, but traffic was still bumper-to-bumper from the outskirts of the city toward Austin and Dallas. The state escorted tanker trucks full of gas to empty stations in small towns along the way. And National Guard trucks delivered gasoline to drivers who ran out.
The bus fire took place in a traffic jam on Interstate 45 near Wilmer, southeast of Dallas. The vehicle was rocked by explosions and engulfed in flames that reduced it to a blackened, burned-out shell.
Early indications were that the bus it caught fire because of mechanical problems, then passengers' oxygen tanks started exploding, Dallas County Sheriff's Department spokesman Don Peritz said.
Dozens of chemical plants are situated along the Texas and Louisiana Gulf Coast in the nation's biggest concentration of oil refineries, and damage and disruptions caused by Rita could cause already-rising oil and gasoline prices to go even higher. Also, environmentalists warned of the possibility of a toxic spill.
Plants shut down operations, and hundreds of workers were evacuated from offshore oil rigs. Texas Gov. Rick Perry said state officials had been in contact with plants about "taking appropriate procedures to safeguard their facilities."
At 2 p.m. EDT, Rita was centered about 175 miles southeast of Port Arthur, moving northwest at near 10 mph, and forecasters said it could weaken further become coming ashore.
Its hurricane-force winds extended up to 85 miles from the center, and its tropical storm-force winds reached outward 205 miles, meaning Houston and Galveston might not feel Rita's full fury but could still get battered.
The first bands of rain were expected before nightfall Friday. Forecasters warned of the possibility of a storm surge of 15 to 20 feet, battering waves and rain of up to 20 inches, with more than 25 inches possible over the next several days as the storm moves inland into Texas and Louisiana and wrings itself out.
Two communities that stood to bear the brunt of the storm were Port Arthur, a city of about 58,000 that is home to industries that include oil, shrimping and crawfishing; and Beaumont, a petrochemical, shipbuilding and port city of about 114,000. Beaumont was the site of the 1901 Spindletop oil gusher that gave birth to the modern petroleum industry.
The military sent cargo planes to evacuate medical patients and others from Beaumont. Downtown Beaumont was all but deserted, with buildings boarded up and practically nothing moving but windblown plastic bags. On the horizon, covered in gray clouds, refinery torches belched black smoke.
Sherry Gates, whose husband is maintenance director of the Beaumont Hotel, planned to stay behind to protect the place from looters. The hotel, she said, can withstand whatever Rita brings. "This old girl," she said, "will see us out."
In Port Arthur — a poor, down-on-its-luck town with a largely population of minorities, including Vietnamese shrimp fishermen, and a downtown museum devoted to one of its most famous natives, Janis Joplin — street lights were turned off. Stores were boarded up along with the homes, many of which sit up on cinderblocks.
Similarly, the usually bustling tourist island of Galveston — rebuilt after as many as 12,000 people died in a 1900 hurricane that is still the deadliest natural disaster in U.S. history — was all but abandoned, with at least 90 percent of its 58,000 residents cleared out.
In southwestern Louisiana, up to 500,000 residents along the state's southwest coast were urged to evacuate and state officials planned to send in buses to take refugees.
Rita brought steady rain to New Orleans for the first time since Katrina. The forecast was for 3 to 5 inches in the coming days — dangerously close to the amount engineers said could send floodwaters pouring back into recently dry neighborhoods.
Dozens of blocks in the impoverished Ninth Ward were swamped after water poured through the sandbags, soil and gravel used to patch the Industrial Canal levee.
"Our worst fears came true," said Maj. Barry Guidry of the National Guard. "We have three significant breaches in the levee and the water is rising rapidly."
Sally Forman, an aide to Mayor Ray Nagin, said officials knew the levees were compromised but believed the Ninth Ward had been cleared of residents. "I wouldn't imagine there's one person down there," Forman said.
Katrina's death toll in Louisiana rose to 841 Friday, pushing the body count to at least 1,079 across the Gulf Coast. But the company under contract to collect the bodies in the New Orleans area suspended operations until at least Sunday because of the approaching storm.
"Katrina. It's scared everyone," said Dianna Soileau, 29, who was fleeing the refinery town of Texas City with her husband and two children. "We don't want to be the same thing."
___
Rogue
RITA:
Storm May Be the Coup de Grace for the American Economy and Many of Us As Well
by
Michael C. Ruppert
© Copyright 2005, From The Wilderness Publications, www.fromthewilderness.com. All Rights Reserved. May be reprinted, distributed or posted on an Internet web site for non-profit purposes only.
September 21st, 2005 1530 PST (FTW) – As I pack my bags to head to Washington for Congressional Black Caucus hearings on the September 11th attacks (to be conducted this Friday and Saturday) my inbox is being progressively flooded with emails from inside sources in the energy industry about what Hurricane Rita is now likely to accomplish – the near-complete destruction of an already teetering US economy.
Fully 30% of all US refining capacity is in the target zone. Perhaps most importantly, almost every refinery capable of producing diesel fuel is in immediate danger. This promises (especially in the wake of Katrina) a devastating and irreplaceable shortage of the diesel fuel needed to power America’s harvest of grain and food crops this month and next. Without diesel fuel to power the harvesters and combines, crops may be left to rot in the ground presenting a double whammy: food shortages (with prices that may treble or quadruple) and export defaults negatively impacting the financial markets and trade deficit.
Even before Rita strikes, fully 30% of all domestic natural gas production is shut in. The US cannot import natural gas from overseas like it can both crude and refined products. Repair work on infrastructure damaged by Katrina has been halted as crews have been evacuated. The remaining half of Gulf energy production undamaged by Katrina is directly in Rita’s crosshairs. Natural gas prices are up over 110% and home heating oil futures are up almost 70% before Rita even gets here. Since Katrina, US domestic oil production is down one million barrels per day (from 5Mbpd to 4 Mbpd). We were producing 9 Mbpd less than a decade ago.
Peak Oil has made replacement of losses almost impossible even as Saudi heavy-sour is being spurned as useless around the world, even with discounts of up to $10 and $12 per barrel.
A Bloomberg article today contains a quotation from a Wall Street energy expert as saying, “‘Rita is developing into our worst-case scenario,’ said John Kilduff, vice president of risk management at Fimat USA in New York. ‘This is headed right into our other major refining center just after all the damage done to facilities in Louisiana. From an energy perspective it doesn't get any worse than this.’”
The Chairman of Valero Energy agrees with the Bloomberg assessment calling Rita a potentially national disaster. His opinion is important because Valero operates more refineries in the US than any other company.
CNN is now predicting $5 per gallon gasoline and this will not likely go away with market manipulations. We had not yet experienced the permanent spikes resulting from Katrina, and the emergency reserves of the United States’ Strategic Petroleum Reserve and the International Energy Agency have already been tapped once and not refilled.
The South Texas Project nuclear plant – one of the largest in the country – is being completely shut down in preparation for Rita’s landfall. It is only 12 miles from the Texas coast and almost dead center in the hurricane’s projected path. Texas has its own power grid but catastrophic electricity shortages could easily ripple throughout the country in a short time. Electricity lost from that that facility will only be added to what is lost from other facilities powered by now critically short supplies of natural gas.
For those of you who expect FEMA to behave any differently in Texas than it did in New Orleans you are in for a crude awakening. FEMA will do what it must now do to preserve even a functioning part of America’s governing and economic infrastructure. Saving lives will be one of the least important functions in its mandate. While I had serious doubts about America’s ability to recover from Katrina, I am certain that – barring divine intervention – the United States is finished; not only as a superpower, but possibly even as a single, unified nation with the arrival of Hurricane Rita
http://www.fromthewilderness.com/free/ww3/092105_rita_storm.shtml
Rogue
RITA:
Storm May Be the Coup de Grace for the American Economy and Many of Us As Well
by
Michael C. Ruppert
© Copyright 2005, From The Wilderness Publications, www.fromthewilderness.com. All Rights Reserved. May be reprinted, distributed or posted on an Internet web site for non-profit purposes only.
September 21st, 2005 1530 PST (FTW) – As I pack my bags to head to Washington for Congressional Black Caucus hearings on the September 11th attacks (to be conducted this Friday and Saturday) my inbox is being progressively flooded with emails from inside sources in the energy industry about what Hurricane Rita is now likely to accomplish – the near-complete destruction of an already teetering US economy.
Fully 30% of all US refining capacity is in the target zone. Perhaps most importantly, almost every refinery capable of producing diesel fuel is in immediate danger. This promises (especially in the wake of Katrina) a devastating and irreplaceable shortage of the diesel fuel needed to power America’s harvest of grain and food crops this month and next. Without diesel fuel to power the harvesters and combines, crops may be left to rot in the ground presenting a double whammy: food shortages (with prices that may treble or quadruple) and export defaults negatively impacting the financial markets and trade deficit.
Even before Rita strikes, fully 30% of all domestic natural gas production is shut in. The US cannot import natural gas from overseas like it can both crude and refined products. Repair work on infrastructure damaged by Katrina has been halted as crews have been evacuated. The remaining half of Gulf energy production undamaged by Katrina is directly in Rita’s crosshairs. Natural gas prices are up over 110% and home heating oil futures are up almost 70% before Rita even gets here. Since Katrina, US domestic oil production is down one million barrels per day (from 5Mbpd to 4 Mbpd). We were producing 9 Mbpd less than a decade ago.
Peak Oil has made replacement of losses almost impossible even as Saudi heavy-sour is being spurned as useless around the world, even with discounts of up to $10 and $12 per barrel.
A Bloomberg article today contains a quotation from a Wall Street energy expert as saying, “‘Rita is developing into our worst-case scenario,’ said John Kilduff, vice president of risk management at Fimat USA in New York. ‘This is headed right into our other major refining center just after all the damage done to facilities in Louisiana. From an energy perspective it doesn't get any worse than this.’”
The Chairman of Valero Energy agrees with the Bloomberg assessment calling Rita a potentially national disaster. His opinion is important because Valero operates more refineries in the US than any other company.
CNN is now predicting $5 per gallon gasoline and this will not likely go away with market manipulations. We had not yet experienced the permanent spikes resulting from Katrina, and the emergency reserves of the United States’ Strategic Petroleum Reserve and the International Energy Agency have already been tapped once and not refilled.
The South Texas Project nuclear plant – one of the largest in the country – is being completely shut down in preparation for Rita’s landfall. It is only 12 miles from the Texas coast and almost dead center in the hurricane’s projected path. Texas has its own power grid but catastrophic electricity shortages could easily ripple throughout the country in a short time. Electricity lost from that that facility will only be added to what is lost from other facilities powered by now critically short supplies of natural gas.
For those of you who expect FEMA to behave any differently in Texas than it did in New Orleans you are in for a crude awakening. FEMA will do what it must now do to preserve even a functioning part of America’s governing and economic infrastructure. Saving lives will be one of the least important functions in its mandate. While I had serious doubts about America’s ability to recover from Katrina, I am certain that – barring divine intervention – the United States is finished; not only as a superpower, but possibly even as a single, unified nation with the arrival of Hurricane Rita
http://www.fromthewilderness.com/free/ww3/092105_rita_storm.shtml
Rogue comment.....These hurricanes sure know how to hit us to make the maximun amount of damage to our country. Good ole "Mother Nature(???)" sure looks upon us kindly. LOL!!!!!!!!!
Rogue
New World Orleans: Microcosm for the "New America"
Special report on the elite police state takeover
http://infowars.net/Pages/Sept05/050905New_World_Orleans.htm
Steve Watson | September 5 2005
Imagine an America where everyone is displaced. It's survival of the fittest as all law and order has broken down. Martial law has been declared with 24 hr curfews, Posse Comitatus has been overturned and there are troops on the streets shooting anyone who disobeys their orders. Thousands and thousands of people are starving but the authorities will not allow aid in any significant amounts. Large crowds are quelled with the use of sonic lasers, whilst overhead drone aircraft monitor the area, checking for any anomalous activity.
Any form of Local and State government has been abandoned and officials have been forcibly removed against their wills. The elite infiltrators of the Federal Government watch on from afar, in control of everything, answering to no one and getting fat off the profits of their own corrupt inactivity which brought about the situation in the first instance. They like it that way, it suits them down to the ground, why should they do anything to improve the situation?
This is the nightmare situation of a New World Order takeover in America. It is what we have been warning the world about for years. It is no longer some distant possibility on the horizon that our children may have to endure and fight against, it is here, it is now. New Orleans is a testing ground for this exact scenario, all this is going on there now. We are witnessing in New Orleans, the construction of a microcosm for a "New America" and a New World Order.
If it keeps on rainin', levee's goin' to break
The overriding issue that is simply being ignored by the mainstream media is that it was the federal government itself that lowered the guard in cutting off key funding to protect Louisiana from natural disasters.
The New Orleans district of the US Army Corps of Engineers bore the brunt of a record $71.2 million reduction in federal funding for fiscal year 2006.
The Army Corps of Engineers sought $105 million for hurricane and flood programs in New Orleans, while the White House slashed the request to about $40 million. Congress finally approved $42.2 million, less than half of the agency's request
The Bush administration has been cutting funding for federal disaster relief funds since 2001 while doubling funding in other areas to pump up the biggest growth in government for decades, easily outstripping that of Bill Clinton.
A report from the Best of New Orleans news website outlines the details.
"...Among emergency specialists, 'mitigation' -- the measures taken in advance to minimize the damage caused by natural disasters -- is a crucial part of the strategy to save lives and cut recovery costs. But since 2001, key federal disaster mitigation programs, developed over many years, have been slashed and tossed aside. FEMA's Project Impact, a model mitigation program created by the Clinton administration, has been canceled outright. Federal funding of post-disaster mitigation efforts designed to protect people and property from the next disaster has been cut in half. Communities across the country must now compete for pre-disaster mitigation dollars."
The Bush administration's move to merge FEMA with Homeland Security meant that the two had to compete for funding. Straightforward projects that would have massively reduced the devastation we are now seeing, such as raising houses, were cast aside in favor of anti-terrorism measures.
In early 2001, FEMA issued a report stating that a hurricane striking New Orleans was one of the three most likely disasters in U.S., including a terrorist attack on New York City!. "The New Orleans hurricane scenario," The Houston Chronicle wrote in December 2001, "may be the deadliest of all." But by 2003 the federal funding for the flood control project essentially dried up as it was drained into the Iraq war.
Walter Maestri, emergency management chief for Jefferson Parish, Louisiana was quoted on June 8, 2004 in the New Orleans Times-Picayune, as saying "It appears that the money has been moved in the president’s budget to handle homeland security and the war in Iraq, and I suppose that’s the price we pay. Nobody locally is happy that the levees can’t be finished, and we are doing everything we can to make the case that this is a security issue for us".
Ultimately, the U.S. Army Corps of Engineers is directed, along with 15 other agencies, by the Federal Emergency Management Agency. "It is FEMA who is really calling the shots and setting priorities here," Lt. Gen. Carl A. Strock, commander of the corps has said.
Much of the Netherlands lies below sea level and after the 1953 flood which killed 1,800 people, the Dutch launched a major flood prevention program called the Delta Plan. Engineers fortified dykes and bolstered other water defenses against a future disaster and there hasn't been one since. Had a similar project been in place for New Orleans and had Bush not cut the funding, the misery and turmoil being visited on that area would have been avoided.
Not only is the Bush Administration directly responsible for the ferocity of this disaster, the blame also lies with Clinton. 10 years ago, the Clinton administration cut 98 flood control projects, including one in New Orleans, saying such efforts should be local projects, not national.
A $120 million hurricane project, approved and financed annually from 1965 was killed by the Clinton administration after being approved by the Army Corps of Engineers. It was designed to protect more than 140,000 West Bank residents east of the Harvey Canal.
The New York Times has reported that there were vivid reasons to push for the greatest level of protection. One was Hurricane Betsy, a midgrade storm that swamped much of New Orleans in 1965. In 1969, Hurricane Camille, the second-most-powerful Atlantic storm recorded, passed within 60 miles and demolished the Mississippi coast.
Bob Sheets, a meteorologist who directed the National Hurricane Center until retiring in 1995, has said that he and other federal forecasters gave hundreds of talks about storm risks, and New Orleans was always the case study for catastrophe since the 1970s. He has said of the city officials: "Essentially they did nothing."
Despite all this, In an interview on Thursday the 1st September, on "Good Morning America," President Bush said, "I don't think anyone anticipated the breach of the levees."
Furthermore, the mainstream media, despite several reports emerging to the contrary, republished Bush's comments. The New York Times declared that "The response will be dissected for years. But on Thursday, disaster experts and frustrated officials said a crucial shortcoming may have been the failure to predict that the levees keeping Lake Pontchartrain out of the city would be breached, not just overflow."
This April 2005 article in Popular Science proves that Bush's comments were grossly inaccurate. "At 20 feet below sea level, new Orleans is a prime target. An ambitious new levee system would decrease the risk."
As World Net Daily reported, a year ago, New Orleans reviewed its hurricane disaster plans after Hurricane Ivan gave the city a major scare forcing the evacuation of nearly 1 million people from the area. Governor Kathleen Blanco and Mayor Ray Nagin both acknowledged after the Ivan near miss they needed a better evacuation plan.
Even the AP noted at the time, "New Orleans dodged the knockout punch many feared from the hurricane, but the storm exposed what some say are significant flaws in the Big Easy's civil disaster plans." The big flaws were that there simply were no civil disaster plans and FEMA had no intention of developing any.
So it is clear that Officials at the Army Corps of Engineers and emergency managers and hurricane experts knew for years, that the levees surrounding the New Orleans area were built to withstand only a relatively weak Category 3 hurricane. Hurricane Katrina, a Category 4 mega-storm, thus had devastating consequences. Still funding was slashed and the disaster was allowed to happen.
When The Levee Breaks I'll have no place to stay
In the aftermath of the disaster it has become obvious that the Government has no interest in alleviating the suffering and helping to restore civility in the region.
In particular FEMA, which has endlessly drilled for such situations, has been a key hindrance. After the authorities in Baton Rouge had prepared a field hospital for victims of the storm, FEMA sent its first batch of supplies, all of which were designed for use against chemical attack, including drugs such as Cipro, which is designed for use against anthrax. The London Guardian reported, "We called them up and asked them: 'Why did you send that, and they said that's what it says in the book'," said a Baton Rouge official.
Yet don't think for one second that FEMA is simply incompetent. FEMA is criminally negligent. FEMA has done nothing to aid the situation, in fact according to Jefferson Parish President Aaron Broussard, Federal bureaucrats have 'Murdered' the Flood Victims in New Orleans. Broussard stated on Meet The Press that " We have been abandoned by our own country." He broke down in tears as he described how FEMA has cut emergency communication lines and has been turning back fuel and water supplies being sent by outside agencies such as Wal Mart. This is because the Federal Government wants complete control over the situation. Broussard, speaking through his tears re-iterated "nobody's coming to get us, nobody's coming...for God's sake shut up and send somebody."
Even American Red Cross officials have said that FEMA authorities would not allow them to deliver aid. "The Homeland Security Department has requested and continues to request that the American Red Cross not come back into New Orleans," said Renita Hosler, spokeswoman for the Red Cross.
Even Jack Cafferty, the CNN anchor known for his straight-talking, has declared: "I remember the riots in Watts. I remember the earthquake in San Francisco. I remember a lot of things. I have never seen anything as badly handled as this situation in New Orleans. Where the hell is the water for these people? Why can't sandwiches be dropped to those people in that Superdome down there? It's a disgrace. And don't think the world isn't watching."
Former FEMA officials have admitted that Government disaster officials had an action plan if a major hurricane hit New Orleans. They simply didn't execute it when Hurricane Katrina struck. Ronald Castleman, the former regional director for the Federal Emergency Management Agency and John Copenhaver, a former FEMA regional director during the Clinton administration who led the response to Hurricane Floyd in 1999, said they were bewildered by the slow FEMA response.
We even have blogs from former New Orleans residents who have managed to get to safety. One exclaiming that:
"There are supplies sitting in Baton Rouge for the folks in New Orleans, but the National Guard has the city surrounded and is not letting anyone in or out. They are turning away people with s[QUOTE]upplies, claiming it is too dangerous...Our goverment is KILLING the people of New Orleans. This is the message I am now sending to all major media sources, national and worldwide, as well as posting to email lists, blogs, etc. The story is getting out that the people there are not getting supplies, but the truth of WHY is not. "
The LA Times interviewed a survivor who said, "The only thing the authorities have given us is a bunch of false hope,". she had survived Tuesday through Friday on scavenged scraps of food inside the cavernous hall. "They just left us here to die."
The Federal response was further criticised by New Orleans deputy police commander W.S. Riley who reported to AFP that Guardsmen 'played cards' as the chaos unfolded and many were dying. He stated that for three days there was no assistance. "The guard arrived 48 hours after the hurricane with 40 trucks. They drove their trucks in and went to sleep."
There have also been suggestions that part of the levee around N.O. was dynamited after the first section broke in an attempt to prevent Uptown (the rich part of town) from being flooded. Apparently they used too much dynamite, thus flooding part of the Bywater.
Reports and comments from officials today have indicated that President Bush's visit is nothing more than a staged photo op.
ZDF News reported that the president's visit was a completely staged event. Their crew witnessed how the open air food distribution point Bush visited in front of the cameras was torn down immediately after the president and the herd of 'news people' had left and that others which were allegedly being set up were abandoned at the same time. The people in the area were once again left to fend for themselves, said ZDF. [War And Piece]
"2 minutes ago the President drove past in his convoy. But what has happened in Biloxi all day long is truly unbelievable. Suddenly recovery units appeared, suddenly bulldozers were there, those hadn't been seen here all the days before, and this in an area, in which it really wouldn't be necessary to do a big clean up, because far and wide nobody lives here anymore, the people are more inland in the city...The extent of the natural disaster shocked me, but the extent of the staging is shocking me at least the same way. With that back to Hamburg." [Daily Kos]
White House officials do not deny that they craft elaborate events to showcase Bush, but they maintain that these events are designed to accurately dramatize his policies and to convey qualities about him that are real.
The Times-Picayune of New Orleans has called for the firing of FEMA director Michael Brown and has heavily criticized the government for its awful response.
Jefferson Parish President Aaron Broussard, despite his break down on Meet The Press, also stated that "FEMA needs more congressional funding. It needs more presidential support . . . FEMA needs to be empowered to do the things it was created to do."
FEMA is now simply a federalized front group for the corrupt money hoarding Department of Homeland Security, the Orwellian titled agency that has nothing to do with security and everything to do with limiting the freedoms of people all over the country. Local officials no longer have any authority and have been forcibly evacuated, even despite the fact that they wished to stay and oversee the recovery efforts.
Mayor Nagin has also said that the National Guard's Blackhawk helicopter carrying the sandbags to plug the hole in the levee on 17th St. Canal was intentionally diverted away. Nagin was quoted as demanding to federal officials "Get Off Your Asses And Do Something". Nagin is clearly paranoid about the whole situation, is running around playing the part of the good cop to FEMA's bad cop. This sets the table for FEMA to sweep in and heroically save the day at a later date. Nagin has also warned "If the CIA slips me something and next week you don't see me, you'll all know what happened."
Cryin' won't help you, prayin' won't do you no good
Martial law was declared in New Orleans midday Tuesday 30th August. Posse Comitatus has been overturned and the National Guard has authorization to shoot and kill anyone they deem to be "hoodlums". Governor Kathleen Blanco has declared that "These troops are fresh back from Iraq, well trained, experienced, battle tested and under my orders to restore order in the streets,".
This is a microcosm of the New America. The LA Times reported that "their mission simply, is to turn New Orleans into a police State - to "regain the city" as 1st Sgt. John Jewell has said. Police have been ordered to stop saving lives and start saving property by shooting anyone who attempt to get food and water. The police are looting themselves to stay alive whilst the ordinary people are starving. This is the new police state America.
Some of the most sophisticated military equipment used in the Iraq war to quell the insurgency is now being used in New Orleans. We have continually highlighted how such equipment was developed specifically for domestic use and now this has come to pass. Five Silver Fox "unmanned aerial vehicles," or UAVs, equipped with thermal imaging technology to detect the body heat of storm survivors, have been deployed in New Orleans.
Also being deployed are acoustic devices for crowd control and disaster communications, sonic Laser equipment that is currently in use in Iraq. The device uses magnets approximately 6 inches tall and 9.25 inches wide to convert electrical pulses into sound waves, and is capable of aiming sound precisely for thousands of feet. This allows for the ability to blast out orders that can be heard for miles and allows for crowds to be fired upon and dispersed by soundwaves.
Those who fall in line with the curfews and the orders are still treated like criminals in this New America. Footage has shown that men women and even children are being separated and thoroughly frisked and searched before being rescued. It seems that survival comes second to being a civilian subject.
The ground troops have begun "combat operations" “to take this city back” in the aftermath
from those they have termed "insurgents". These are terms also being used in Iraq, but now they fit perfectly here to describe anyone who disobeys or does not fall in line in the New America. The troops have declared their shock at having to shoot at US citizens and being shot back at, yet the majority of these people are deliberately being deprived of food and water by the federal authorities, they are desperate and have been forced into this situation.
Those who were grabbed in the immediate aftermath were shipped into the Superdome and simply left there without any aid. This represents nothing more than a concentration camp as starving and thirsty refugees were not allowed to leave, trapped until the authorities deemed it appropriate to move them.
The media covering the event have been appalled by this activity and the reality of the New America it seems is sinking in in some instances. Fox reporter Geraldo Rivera was filled with tears in his eyes and his voice fluttered with sorrow as he made an on-air plea to authorities to allow the estimated 30,000 storm victims at the center to be allowed to move to a safer, cleaner area. "Let them walk out of here, let them walk the hell out of here!"
Checkpoints have been set up throughout the area to make sure no one leaves and no one gets in without the say so of the federal authorities. It is clear that an emergency response should not be conducted this way. It is also clear that this is no ordinary emergency response. This is a blueprint, a litmus test for the New America, the police state, the New World Order.
When the levee breaks, mama, you got to move
Whilst the disaster evolves it has already been decided who will restore order and who will reap the profits of the lucrative cleanup contracts. Dick Cheney affiliated Halliburton have again been rewarded that task as they have so many times. After 9/11, in Afghanistan and in Iraq Halliburton and the elite government infiltrators reap the rewards again and again. Last week Alex Jones joked on his how that Halliburton may get the contract to clean up - the sad reality is that even the things we joke about are now coming to pass every time.
The agenda is clear, they allow the disaster to happen, or they manufacture the disaster in the case of 9/11, and then they reap the financial rewards first and the control mechanism rewards that categorize their New America a little later.
It has also emerged that FEMA Outsourced the disaster plans to political cronies and major donors. They outsourced the hurricane recovery planning to the Baton Rouge-based consulting firm Innovative Emergency Management (IEM), Inc. IEM's team partners for the more than $500,000 contract are Dewberry of Arlington, VA, URS Corporation of San Francisco, and James Lee Witt Associates. Witt was FEMA Director under Bill Clinton. IEM's president is Madhu Beriwal. The company was founded in 1985. Dewberry and URS are engineering firms. IEM is also a Defense Department contractor and has contracts with the U.S. Army Training and Doctrine Command (TRADOC) along with team members Booz Allen Hamilton and Lockheed Martin.
These people all have their hands in the honey pot, they benefit from such tragic events, wars and disasters every time
Going down... going down now... going down....
We have seen recently the precedent being set for the eventuality we now see unfolding. The constant ratcheting up of fear based control through the exploitation of terror attacks and terror alerts. The technology that we have monitored through its development stages is now being put into place.
Everything we have covered over the last few years is becoming an actuality in New Orleans at this time. We can only report it further and get the important information out in place of controlled mainstream media that refuse to or are prevented from reporting the real issues.
Rogue
This is a major event in the agenda for a New America and a New World Order and it may be a make or break one.
This New America is being controlled by corrupt elite criminals who seek to achieve the degradation and enslavement of humanity through war, "revolution," sickness, starvation, depression, and now "natural" disaster. A disaster has been turned into a drill for martial law. This is not an accident. It is part of a relentless process of demoralization designed to make the people accept tyranny and excessive control over their lives.
Wyoming Pipelines, Production Said Key To US Energy Needs
DOW JONES NEWSWIRES
September 22, 2005 12:01 p.m.
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JACKSON, Wyo. (AP)--Wyoming needs to increase its production of natural gas, and needs more pipelines to transport that gas to the rest of the country, industry leaders said at the Wyoming Natural Gas Fair Wednesday.
With energy prices still high after Hurricane Katrina disrupted production along the Louisiana and Mississippi coasts, and another hurricane barreling toward Texas, producers said Wyoming needed to work immediately to make sure resources were available in case of fuel shortages.
"This country needs that supply," said Bryan Hassler, executive director of the Wyoming Natural Gas Pipeline Authority.
"We can make a substantial difference here, now," said John Kennedy of Gillette-based Kennedy Oil.
However, many said federal regulations - in particular, environmental regulations - often stood in the way of rapid production increases. Don Likwartz, supervisor of the Wyoming Oil and Gas Commission, said the state was still waiting for federal approval of four resources management plans on Bureau of Land Management property.
Jim Gazewood, Wyoming coal-bed methane and natural gas coordinator for the BLM, said the Rawlins and Buffalo field offices - two of the busiest in the country - should soon be able to hire additional staff to help with the backlog.
Gazewood also said provisions in the energy bill passed this year might give producers some flexibility with environmental regulations.
"I think that could provide some measure of relief," Gazewood said.
In addition to any production increases, measures need to be taken to help transport that gas to the rest of the country, said Marc Strahn, vice chairman of the Wyoming Natural Gas Pipeline Authority.
Strahn said companies should work together to create pipelines that can carry more gas than any one company produces.
"We need to take alliance-type projects, where multiple companies build super-huge pipelines out of here," Strahn said.
Rogue