Friday, February 25, 2005
The Peak Oil Bubble
From Bakersfield.com
I wouldn't hold your breath waiting for an alternate source to preserve modern industrial civilization's addiction to oil and save our collective asses. Ain't gonna happen. Get ready to start growing your own food and making do with a whole lot less than you have now.
And for all those with money in the oil market, you better pay very close attention because while you still got a few years to make money on it, eventually, that bubble is going to pop and then you will be holding paper only fit to burn and keep you warm in the winter.
Posted: Friday February 18th, 2005, 2:45 PM
Last Updated: Friday February 18th, 2005, 2:45 PM
Exxon passes GE to be biggest
KW Associates, Realtors
Exxon Mobil Corp. overtook General Electric Co. as the world's biggest company by market value, underscoring the emergence of energy stocks as leaders amid surging oil prices.
Exxon Mobil, the largest publicly traded oil producer, was valued at $383.3 billion as of Friday's close, according to data compiled by Bloomberg. The figure surpassed the $379.3 billion value of GE, whose 11 units include financial services, health care and the NBC television network.
"Exxon mirrors the importance of the energy industry," said Forrest Mervine, who helps manage $1.4 billion at Philadelphia Corp. in Philadelphia. "That's going to be the case for a while until alternate sources of energy come along."
I wouldn't hold your breath waiting for an alternate source to preserve modern industrial civilization's addiction to oil and save our collective asses. Ain't gonna happen. Get ready to start growing your own food and making do with a whole lot less than you have now.
And for all those with money in the oil market, you better pay very close attention because while you still got a few years to make money on it, eventually, that bubble is going to pop and then you will be holding paper only fit to burn and keep you warm in the winter.
Saturday, February 12, 2005
Framing the truth
From MSNBC: Clear skies vs clean government:
Congress, as usual, seems asleep at the switch. Years ago, you could always count on dozens of lawmakers, irrespective of their party affiliation, to stand up and make sure the legislative process had "integrity." Now, on both sides of the aisle, it's all about giving your wealthiest campaign contributors as much unfettered access and power as possible, while shutting off any opposing views or arguments. Moderation and open negotiation? Never.
The irony, of course, is that most Americans seem more open-minded and fair these days than our leaders in Washington, D.C...
"Clear skies?" It sounds great. But a "clean" and transparent government would be a better way to start.
Congress, as usual, seems asleep at the switch. Years ago, you could always count on dozens of lawmakers, irrespective of their party affiliation, to stand up and make sure the legislative process had "integrity." Now, on both sides of the aisle, it's all about giving your wealthiest campaign contributors as much unfettered access and power as possible, while shutting off any opposing views or arguments. Moderation and open negotiation? Never.
The irony, of course, is that most Americans seem more open-minded and fair these days than our leaders in Washington, D.C...
"Clear skies?" It sounds great. But a "clean" and transparent government would be a better way to start.
Thursday, February 10, 2005
Beware the new Bankruptcy Legislation
Banks, credit card companies and retailers have pushed for this plan since 1997. Consumer and civil rights groups and unions say the legislation is unfair to low-income working people, single mothers, minorities and the elderly, and would remove a safety net for those who have lost their jobs or face mounting medical bills.
Democrats, meanwhile, want the bill to prohibit protesters from using bankruptcy to avoid paying court fines for blocking abortion clinics if the demonstrators knowingly violated the law.
Democrats, meanwhile, want the bill to prohibit protesters from using bankruptcy to avoid paying court fines for blocking abortion clinics if the demonstrators knowingly violated the law.
Saturday, February 05, 2005
Bloomberg: Municipal Bonding on the Sly
Feb. 4 (Bloomberg) -- New York State can't stop gorging on bonds, which means future taxpayers will be gouged.
In a report released this week, Comptroller Alan Hevesi provides details of how he says the state has misused its credit.
``It has increasingly used debt to pay for the operating expenses of State and local government,'' the report says. ``And, rather than carefully planning how borrowed dollars are used, the State actually increased its debt levels during years of budget surpluses.''
The remarkable 115-page report, titled ``New York State's Debt Policy: A Need for Reform,'' unwittingly also shows what Wall Street does best.
Wall Street can sell your state or locality's bonds.
Boy, can it!
New York has $46.8 billion in state-supported debt, according to the report. Of that amount, only $3.8 billion was general obligation debt, backed by the voters. The vast, mysterious network of more than 700 public authorities sold almost $42 billion of the remainder.
``Public authority or backdoor borrowing has grown from 60 percent in 1985 to a troubling 92 percent of the State's debt today,'' the report says. ``Translation: Taxpayers were denied the opportunity to approve or reject $40 billion in outstanding debt.''
Debt Time Bomb
They are on the hook for it, though. New York has the fourth- highest debt per capita, $2,420, behind Connecticut, Massachusetts and Hawaii, according to Moody's Investors Service. That's 2 1/2 times the national average of $944.
Isn't that wonderful? That's what Wall Street can do. Wall Street can teach politicians to set up authorities by the dozen to sell more and more bonds, and keep it all as secret as possible.
Until the debt time bomb blows up, of course. Then, after an insufficient amount of hand wringing, Wall Street will send in a batch of public finance ``experts,'' who can set up boards overseeing the mess -- and, of course, sell an entire new round of financial recovery bonds.
Infinite Variety
New York is hardly alone. Unless you live in the smallest of towns, your locality probably has dozens of authorities empowered to sell a dizzying array of bonds to help finance everything from housing to hospitals to industrial development.
You don't know it, but you are probably on the hook for dozens of different kinds of bonds. You will probably never be able to figure out how most of them work. You will never be able to calculate how much it's costing you to borrow, and how that compares to how much it cost you last time.
A study of the market by the U.S. Securities and Exchange Commission last year put it pretty well, when it concluded that municipal bonds were too complicated for their own good: ``Issuers may be able to raise funds at lower cost by creating simpler bonds.''
Of course, the bankers who design these things will tell you that they custom-design each one with a special buyer in mind, so that you get the lowest borrowing cost.
Satisfying a particular buyer may not translate into the lowest borrowing cost, for one thing. For another, is it such a leap of imagination to think that some bankers wouldn't so complicate a bond that it resists comparison? Because if you can't make a simple comparison of how much it cost you to borrow this time versus last, then the banker is always right. Their handiwork can never be challenged, at least not by the average citizen.
They like it that way.
Wonder of the World
The municipal market, which allows U.S. municipalities to finance their own destinies, is a wonder of the world. It has also become, as Alan Hevesi's report shows, a curse.
Don't blame Wall Street, though. Wall Street sells bonds. It is paid to sell bonds, and that's what it does. Its main ``idea,'' as the Hevesi report demonstrates, is to sell more bonds. If a municipality hires a financial adviser, that adviser isn't going to counsel it against selling bonds. The advice is always going to be ``yes.''
If you want to blame someone for the curse this market has become, blame the politicians, especially those who bought Wall Street's line that all bonds should be sold through negotiation with dealers, rather than at auction. Pols traffic in favoritism and influence, and negotiated finance empowers them. It is no wonder that they have hijacked the entire process, and perverted it.
Morgan Bankers
Those who are concerned with what this market has become should read the interviews conducted with a pair of ex-J.P. Morgan bankers, one of them a managing director, unsealed by a Philadelphia judge last week.
In the course of this astonishing document, the managing director says it is common practice to pay certain people, financial advisers and bond lawyers and the like, who can influence key decision makers, even if they do no work on a particular transaction.
Now, mind you, it was a managing director saying this, one who ran an entire region of the country for the bank. And he worked for J.P. Morgan, one of the top municipal underwriters --not some bucket shop.
His associate said that in large cities, there was a ``go-to guy'' who could be influenced in this way, ``99.9 percent of the time.'' This banker also ``described the public finance process as inherently politicized and dependent upon personal relationships.''
Nobody gets paid unless more bonds are sold. Those looking for what is killing the municipal market and choking the taxpayers with mountains of debt need look no further than the rise of the negotiated sale.
To contact the writer of this column:
Joe Mysak in New York at jmysakjr@bloomberg.net.
To contact the editor responsible for this column:
Bill Ahearn at bahearn@bloomberg.net.
In a report released this week, Comptroller Alan Hevesi provides details of how he says the state has misused its credit.
``It has increasingly used debt to pay for the operating expenses of State and local government,'' the report says. ``And, rather than carefully planning how borrowed dollars are used, the State actually increased its debt levels during years of budget surpluses.''
The remarkable 115-page report, titled ``New York State's Debt Policy: A Need for Reform,'' unwittingly also shows what Wall Street does best.
Wall Street can sell your state or locality's bonds.
Boy, can it!
New York has $46.8 billion in state-supported debt, according to the report. Of that amount, only $3.8 billion was general obligation debt, backed by the voters. The vast, mysterious network of more than 700 public authorities sold almost $42 billion of the remainder.
``Public authority or backdoor borrowing has grown from 60 percent in 1985 to a troubling 92 percent of the State's debt today,'' the report says. ``Translation: Taxpayers were denied the opportunity to approve or reject $40 billion in outstanding debt.''
Debt Time Bomb
They are on the hook for it, though. New York has the fourth- highest debt per capita, $2,420, behind Connecticut, Massachusetts and Hawaii, according to Moody's Investors Service. That's 2 1/2 times the national average of $944.
Isn't that wonderful? That's what Wall Street can do. Wall Street can teach politicians to set up authorities by the dozen to sell more and more bonds, and keep it all as secret as possible.
Until the debt time bomb blows up, of course. Then, after an insufficient amount of hand wringing, Wall Street will send in a batch of public finance ``experts,'' who can set up boards overseeing the mess -- and, of course, sell an entire new round of financial recovery bonds.
Infinite Variety
New York is hardly alone. Unless you live in the smallest of towns, your locality probably has dozens of authorities empowered to sell a dizzying array of bonds to help finance everything from housing to hospitals to industrial development.
You don't know it, but you are probably on the hook for dozens of different kinds of bonds. You will probably never be able to figure out how most of them work. You will never be able to calculate how much it's costing you to borrow, and how that compares to how much it cost you last time.
A study of the market by the U.S. Securities and Exchange Commission last year put it pretty well, when it concluded that municipal bonds were too complicated for their own good: ``Issuers may be able to raise funds at lower cost by creating simpler bonds.''
Of course, the bankers who design these things will tell you that they custom-design each one with a special buyer in mind, so that you get the lowest borrowing cost.
Satisfying a particular buyer may not translate into the lowest borrowing cost, for one thing. For another, is it such a leap of imagination to think that some bankers wouldn't so complicate a bond that it resists comparison? Because if you can't make a simple comparison of how much it cost you to borrow this time versus last, then the banker is always right. Their handiwork can never be challenged, at least not by the average citizen.
They like it that way.
Wonder of the World
The municipal market, which allows U.S. municipalities to finance their own destinies, is a wonder of the world. It has also become, as Alan Hevesi's report shows, a curse.
Don't blame Wall Street, though. Wall Street sells bonds. It is paid to sell bonds, and that's what it does. Its main ``idea,'' as the Hevesi report demonstrates, is to sell more bonds. If a municipality hires a financial adviser, that adviser isn't going to counsel it against selling bonds. The advice is always going to be ``yes.''
If you want to blame someone for the curse this market has become, blame the politicians, especially those who bought Wall Street's line that all bonds should be sold through negotiation with dealers, rather than at auction. Pols traffic in favoritism and influence, and negotiated finance empowers them. It is no wonder that they have hijacked the entire process, and perverted it.
Morgan Bankers
Those who are concerned with what this market has become should read the interviews conducted with a pair of ex-J.P. Morgan bankers, one of them a managing director, unsealed by a Philadelphia judge last week.
In the course of this astonishing document, the managing director says it is common practice to pay certain people, financial advisers and bond lawyers and the like, who can influence key decision makers, even if they do no work on a particular transaction.
Now, mind you, it was a managing director saying this, one who ran an entire region of the country for the bank. And he worked for J.P. Morgan, one of the top municipal underwriters --not some bucket shop.
His associate said that in large cities, there was a ``go-to guy'' who could be influenced in this way, ``99.9 percent of the time.'' This banker also ``described the public finance process as inherently politicized and dependent upon personal relationships.''
Nobody gets paid unless more bonds are sold. Those looking for what is killing the municipal market and choking the taxpayers with mountains of debt need look no further than the rise of the negotiated sale.
To contact the writer of this column:
Joe Mysak in New York at jmysakjr@bloomberg.net.
To contact the editor responsible for this column:
Bill Ahearn at bahearn@bloomberg.net.
Friday, February 04, 2005
Deja Vu: 100 years later
It is said that those who fail to learn from history are condemned to repeat it.
The Last Twenty-five Years
The Politico-Economic Situation in the United States a Quarter of a Century Ago
The destruction of free government in all but name and the establishment of a plutocracy of privileged wealth masquerading as a republic, was the deadly peril that confronted our people at the dawn of the last decade of the nineteenth century. Angry popular discontent had been in evidence for years, but nothing of a hopeful nature had followed. The "masters of the bread" had always succeeded in gaining their ends. The alarmist cry of grave statesmen and jurists had apparently had little effect either in awakening the thoughtful or intimidating the corruptors and corrupted. Trusts and monopolies continued to multiply with appalling rapidity. The secret agreement, similar to that inaugurated by the Standard Oil Company with the public carriers, had by the closing decade of the last century practically destroyed competition along many lines of trade vital to the life of the people, giving to the trusts a stranglehold on the producing and consuming millions. Even the ominous awakening of the hitherto docile agrarian population and the rapid growth of labor organizations occasioned little uneasiness in the seats of the mighty.
True, social philosophers had been doing much fundamental work. The greatest of these was Henry George, whose "Progress and Poverty," completed in 1879 and published some time later, had enjoyed a phenomenal sale and had started scores of the most fundamental and high-minded patriots to thinking as never before on politico-economic lines. In England, Alfred Russel Wallace and other able and earnest-minded fundamental thinkers vigorously pushed forward the nationalization of the land propaganda, and in America, Edward Bellamy's fascinating social dream, "Looking Backward," instantly appealed to the popular imagination. But for the most part public opinion in the United States, though seething with discontent and unrest, was in a chaotic state, while government continued to respond to the sophistical pleas of privilege.
In the field of religious thought there was much agitation, but of a most profitless kind, being concerned with dogmas and creeds rather than with the great spiritual verities and their relation to the life of men and nations; while such social and economic evils as child labor, the slums, and sweat-shops were only beginning to impress the more thoughtful. Mighty political, economic, scientific, educational, moral, and humanitarian problems which affect the larger life of man and society were conveniently ignored by most of the popular conventional agencies for moulding public opinion.
On the other hand, among those who dared or cared to think, among the idealists who were also practical reasoners, there was a growing determination to search and find remedies for the crying evils, worthy of a free people. The modern critical scientific spirit was abroad among the more fearless and profound thinkers.
Such, in brief, was the general condition when in the closing months of 1889 the first issue of "The Arena" appeared.
The Last Twenty-five Years
The Politico-Economic Situation in the United States a Quarter of a Century Ago
The destruction of free government in all but name and the establishment of a plutocracy of privileged wealth masquerading as a republic, was the deadly peril that confronted our people at the dawn of the last decade of the nineteenth century. Angry popular discontent had been in evidence for years, but nothing of a hopeful nature had followed. The "masters of the bread" had always succeeded in gaining their ends. The alarmist cry of grave statesmen and jurists had apparently had little effect either in awakening the thoughtful or intimidating the corruptors and corrupted. Trusts and monopolies continued to multiply with appalling rapidity. The secret agreement, similar to that inaugurated by the Standard Oil Company with the public carriers, had by the closing decade of the last century practically destroyed competition along many lines of trade vital to the life of the people, giving to the trusts a stranglehold on the producing and consuming millions. Even the ominous awakening of the hitherto docile agrarian population and the rapid growth of labor organizations occasioned little uneasiness in the seats of the mighty.
True, social philosophers had been doing much fundamental work. The greatest of these was Henry George, whose "Progress and Poverty," completed in 1879 and published some time later, had enjoyed a phenomenal sale and had started scores of the most fundamental and high-minded patriots to thinking as never before on politico-economic lines. In England, Alfred Russel Wallace and other able and earnest-minded fundamental thinkers vigorously pushed forward the nationalization of the land propaganda, and in America, Edward Bellamy's fascinating social dream, "Looking Backward," instantly appealed to the popular imagination. But for the most part public opinion in the United States, though seething with discontent and unrest, was in a chaotic state, while government continued to respond to the sophistical pleas of privilege.
In the field of religious thought there was much agitation, but of a most profitless kind, being concerned with dogmas and creeds rather than with the great spiritual verities and their relation to the life of men and nations; while such social and economic evils as child labor, the slums, and sweat-shops were only beginning to impress the more thoughtful. Mighty political, economic, scientific, educational, moral, and humanitarian problems which affect the larger life of man and society were conveniently ignored by most of the popular conventional agencies for moulding public opinion.
On the other hand, among those who dared or cared to think, among the idealists who were also practical reasoners, there was a growing determination to search and find remedies for the crying evils, worthy of a free people. The modern critical scientific spirit was abroad among the more fearless and profound thinkers.
Such, in brief, was the general condition when in the closing months of 1889 the first issue of "The Arena" appeared.
Thursday, February 03, 2005
The Birth Tax
Wednesday, February 02, 2005
Campaign Finance Reform?
From Yahoo! News:
Lott called six- and seven-figure checks that independent political groups poured into last year's presidential election "sewer money" that must be stopped. The Mississippi Republican said his committee would vote next month on legislation that would put strict new limits on fund-raising and spending by partisan tax-exempt groups active in congressional or presidential races.Yeah, now that the likes of George Soros is contributing millions for anti-Bush/anti-fascist 527s the Republicans are squealing like stuck pigs about the big money in political campaigning. As long as big money was going into Republican coffers they were quite happy obstructing any attempt at campaign finance reform. But now that the shoe is on the other foot, look at how quickly they have jumped on the "reform" bandwagon. How disingenuous can you get.
