Gas shortage may crimp weekend fun

The Atlanta Journal Constitution:

With all that’s going on this weekend within what ordinarily would be easy driving range, Georgia’s gas shortage could complicate many people’s plans.

The University of Georgia home game against Top-10 rival Alabama. The 20th anniversary of the Atlanta Football Classic. The North Georgia State Fair in Marietta. The PGA Tour Championship. Auburn at home versus Tennessee.

These are just a few of the major events within a day’s drive of metro Atlanta planned for today through Sunday. But with North Georgia gas supplies spotty, will everyone be able to get where they’re going?

The gas shortage extends beyond the metro area, but has hit hardest in Atlanta, Nashville, Tenn., and the Carolinas, including the Charlotte area and the mountain towns to the west. For days it has closed civic offices, cut short workdays and even canceled community college classes.

The result is that many who initially intended to visit Atlanta this weekend have changed their plans.

“I didn’t want to come down there and be dealing with the same problems in an area I’m not that familiar with,” said Spencer Rawlings, a Nashville resident who regularly makes the four-hour drive for the Atlanta Football Classic.

“In Atlanta on a weekend like this, you’ll be sitting around in traffic, only burning up gas. I’ll eat the cost of my ticket.”

Dopamine and lack of gasoline can't, don't, and won't mix....,

Her Weakness...,

Russia and 580 Billion Arctic Barrels...,

In Pravda;

Russia is determined to make decisive and successive decisions to anchor its rights for the oil and gas-rich water area of the Arctic Ocean. The secretary of the Russian Security Council, the former director of the Federal Security Bureau, Nikolai Patrushev, said yesterday that President Dmitry Medvedev ordered the government to develop a detailed plan of Russia’s state policy in the Arctic region before December 1, 2008. “We must ensure Russia’s national interests in the Arctic region for a long-term perspective,” Medvedev said at the meeting of the council. “Our first and fundamental goal is to turn the Arctic into Russia’s resource base of the 21st century. “We must defend our interests, although we realize that Arctic states – Canada , Norway, Denmark and the USA – will also be defending their interests,” Mr. Patrushev said. “First and foremost, Russia must designate the borderline in the Arctic south. We name the number of 18 percent of our territory and say that 20,000 kilometers is the state border in this region,” the Secretary of the Security Council said. “There are many problems here. It is not about coming to the Arctic to find natural resources there only,” the President of the Russian Academy of Sciences, Yuri Osipov said. “All these resources will be very hard to extract. The traditions of Russia ’s presence in the Arctic zone were formed long ago, so the future development of the territory must have the scientific platform involved,” he added. Russian polar explorers give the government credit for its interest in the problems of the northern region. However, many of them have serious questions to ask. “Judging upon the experience of our expeditions, I know that the protection of the Russian state borders leaves much to be desired,” the chief of the Marine Arctic Complex Expedition, Pyotr Boyarsky told The Vremya Novostei newspaper. The scientist and his colleagues believe that Russia should create a ring of specially protected territories in the Arctic, which will help Russia defend its rights on the Arctic . “The international community treats the status of such territories with great respect. Their appearance in the Russian Arctic sector will be a much more important argument than political or economic claims, Mr. Boyarsky said. German daily Die Zeit wrote that the struggle for the Arctic may become the zone, where world’s leading superpowers will collide.

WaMu Is Seized, Sold Off

Wall Street Journal this morning;

In what is by far the largest bank failure in U.S. history, federal regulators seized Washington Mutual Inc. and struck a deal to sell the bulk of its operations to J.P. Morgan Chase & Co. The collapse of the Seattle thrift, which was triggered by a wave of deposit withdrawals, marks a new low point in the country's financial crisis. But the deal, as constructed by the Federal Deposit Insurance Corp., could hold some glimmers of hope for the beleaguered banking system because it averts any hit to the bank-insurance fund.

Instead, J.P. Morgan agreed to pay $1.9 billion to the government for WaMu's banking operations and will assume the loan portfolio of the thrift, which has $307 billion in assets. The full cost to J.P. Morgan will be much higher, because it plans to write down about $31 billion of the bad loans and raise $8 billion in new capital. All WaMu depositors will have access to their cash, but holders of more than $30 billion in debt and preferred stock will likely see little if any recovery. The deal will vault J.P. Morgan into first place in nationwide deposits and greatly expand its franchise.

The seizure was another watershed event in a frenetic period for the U.S. banking system, and came while members of Congress wrangled over the Bush administration's proposed $700 billion bailout package. The tally of U.S. financial giants that have either been seized by the government or sold themselves off to stronger firms in recent weeks includes mortgage titans Fannie Mae and Freddie Mac, insurer American International Group Inc., and Wall Street firms Lehman Brothers Holdings Inc. and Merrill Lynch & Co.

The failure of WaMu eclipsed what had long been America's largest bank bust on record, the 1984 collapse of Continental Illinois, which had $40 billion in assets.

The fact that no bank was willing to buy WaMu until it failed shows how badly confidence has eroded in a banking system awash with record profits just a few years ago.

China banks told to halt lending to US banks

BEIJING, Sept 25 (Reuters) - Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.

The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.

"The decree appears to be Beijing's first attempt to erect defences against the deepening U.S. financial meltdown after the mainland's major lenders reported billions of U.S. dollars in exposure to the credit crisis," the SCMP said.

The methane time bomb

In the Independent;

The first evidence that millions of tons of a greenhouse gas 20 times more potent than carbon dioxide is being released into the atmosphere from beneath the Arctic seabed has been discovered by scientists.

The Independent has been passed details of preliminary findings suggesting that massive deposits of sub-sea methane are bubbling to the surface as the Arctic region becomes warmer and its ice retreats.

Underground stores of methane are important because scientists believe their sudden release has in the past been responsible for rapid increases in global temperatures, dramatic changes to the climate, and even the mass extinction of species. Scientists aboard a research ship that has sailed the entire length of Russia's northern coast have discovered intense concentrations of methane – sometimes at up to 100 times background levels – over several areas covering thousands of square miles of the Siberian continental shelf.

In the past few days, the researchers have seen areas of sea foaming with gas bubbling up through "methane chimneys" rising from the sea floor. They believe that the sub-sea layer of permafrost, which has acted like a "lid" to prevent the gas from escaping, has melted away to allow methane to rise from underground deposits formed before the last ice age.

Irrational Exuberance

The euphoria Wall Street displayed upon the announcement by the Bush Administration that the government’s balance sheet would be used to park illiquid securities was spectacular. On Thursday and Friday, the Dow gained approximately 780 points, after losing as much in the beginning of the week on the news Lehman Brothers was insolvent and Morgan Stanley and Goldman Sachs were seeking suitors/mergers.

The rally over the last two trading days of the week can be appropriately characterized as irrational exuberance, a term coined by the chief architect of this credit bubble we are experiencing. To explain this position, it is essential that we ask three questions: 1) What measures are being taken; 2) What are the intended consequences; and 3) How do we protect ourselves from the failure of another rescue effort by a compromised and beleaguered Administration? Let’s address these questions seriatim. Lloyd Wynn breaks it down and provides crucial advice you should heed in today's issue of BlackCommentator.

McCain's Chicken Comes Home to Roost

The deregulation of the financial industry is the primary cause of the latest Wall Street crash, an economic debacle that has befallen not only our nation, but European and Asian markets as well.

John McCain bears grave responsibility for the financial anarchy of our times. For twenty-seven years, through debt-producing Reagonomics - especially deregulation - he promoted corporate permissiveness, a culture that included risky speculation, debt-financed mergers, leveraged buy-outs, export of American jobs, quick profit-taking, and the inevitable cry from Wall Street for public bailouts when the casino goes broke.

From the beginning of his political career as an orthodox Republican, McCain has denigrated the wise teachings of Franklin Delano Roosevelt: that unregulated free markets are inherently rapacious and unstable, that war ultimately means higher taxes, and that excessive unpaid debt becomes a balloon so inflated it eventually explodes.

The unfettered free market - the economic Frankenstein that stalks our land today - was conceived in the test tube of Reaganomics in the early ‘80s. John McCain helped to destroy one of the greatest economic achievements in American history, the savings and loan system established during the New Deal. Paul Rockwell recounts McCain's direct involvement in the breakdown of the American economy in today's Black Commentator.

Understanding the Georgia Invasion

Speaking of oil pipelines, here's a timely opinion piece in the Jerusalem Post;

Georgia, located next to powerful Russia, committed a grave mistake in its foreign policy this August. Tbilisi ignored the main virtue advocated by the great practitioners of international relations from Niccolo Machiavelli to Henry Kissinger - prudence - by attempting to regain military control of a seceding region which was supported by Moscow.

Russia exploited the Georgian miscalculation to strike back and to remind everybody that Russia will flex its military muscles in areas considered to be its backyard. Moscow views with trepidation the expansion of NATO, of which it is not a member, toward its borders. Georgian accession to NATO is simply unbearable from a Russian perspective. Russia is threatened by the Western security architecture and will oppose encroachment on areas once Russian-controlled.

Yet this understandable aspect of Russian behavior hides a more ambitious foreign policy goal of controlling the global energy sector, and using such leverage to challenge America in world affairs. The immediate goal of Moscow's military intervention in Georgia was to intimidate the energy-producing countries once part of the Soviet Union, such as Azerbaijan and Turkmenistan, to return to the Russian sphere of influence. The Finlandization of the Caucasus and Central Asia will allow Russia, a great oil producer itself, greater influence over the world's energy.

Oil and gas constitute a strategic commodity that is different from coffee or refrigerators. Control of this commodity bestows considerable political influence. The Russians understand that such leverage can be effective against the energy-hungry European states who are already dependent to various degrees on Russian energy. By its actions in August, Russia decided to challenge America. Vladimir Putin seeks to create a wedge between the US and Europe by further increasing the European dependency upon Russian-controlled oil.

GEORGIA IN itself does not produce oil, but hosts several pipelines transferring oil from Azerbaijan in the Caspian Basin. The Georgian territory helps bypass Russian land and prevents Russia from having a greater handle on moving oil from the Caspian to the West. Therefore, following the invasion, Russian troops took control of the Baku-Supsa pipeline (ending on the Black Sea), which runs close to present Russian military lines. The Russians also threatened control of the Baku-Tbilisi-Ceyhan pipeline (ending on the Turkish Mediterranean shore) by attacking its vicinity from the air. If the Russians remain in Georgia, they maintain control over great amounts of oil slated for the West that hitherto were unaffected by Russian preferences.

Gasoline Shortages

Where is our gasoline and diesel supply headed? Even before Ike hit, quite a few areas of the US were starting to see gasoline shortages. The impact of Ike could only make shortages worse. Most likely, it will take refineries at least a week or two to get production back to normal levels after a storm of this type, considering the impacts of electrical outages and flooding. In this article, I will examine some of the issues that seem to be involved. Based on my analysis, fuel supply shortages are likely to last well into October, and are likely to get considerably worse before they get better.
Until Colonial pipeline is back to carrying full capacity of gasoline, diesel, and other refined products, there are likely to be shortages along the gulf coast and the Southeast. The Northeast may also begin to see shortages.

Other major outages have also been reported. Explorer pipeline, carrying 700,000 barrels a day of petroleum products from Texas/LA to Indiana, is completely shut down. Plantation pipeline, carrying 600,000 barrels a day of petroleum products from Louisiana to Virginia, is operating at reduced rates. Implications of a ten day refinery outage.

Map of the Colonial Pipeline

Resist Wall Street's Shock Doctrine

It would be a grave mistake to underestimate the right's ability to use this crisis -- created by deregulation and privatization -- to demand more of the same. Don't forget that Newt Gingrich's 527 organization, American Solutions for Winning the Future, is still riding the wave of success from its offshore drilling campaign, "Drill Here, Drill Now!" Just four months ago, offshore drilling was not even on the political radar and now the U.S. House of Representatives has passed supportive legislation. Gingrich is holding an event this Saturday, September 27 that will be broadcast on satellite television to shore up public support for these controversial policies.

What Gingrich's wish list tells us is that the dumping of private debt into the public coffers is only stage one of the current shock. The second comes when the debt crisis currently being created by this bailout becomes the excuse to privatize social security, lower corporate taxes and cut spending on the poor. A President McCain would embrace these policies willingly. A President Obama would come under huge pressure from the think tanks and the corporate media to abandon his campaign promises and embrace austerity and "free-market stimulus."

We have seen this many times before, in this country and around the world. But here's the thing: these opportunistic tactics can only work if we let them. They work when we respond to crisis by regressing, wanting to believe in "strong leaders" -- even if they are the same strong leaders who used the September 11 attacks to push through the Patriot Act and launch the illegal war in Iraq.

So let's be absolutely clear: there are no saviors who are going to look out for us in this crisis. Certainly not Henry Paulson, former CEO of Goldman Sachs, one of the companies that will benefit most from his proposed bailout (which is actually a stick up). The only hope of preventing another dose of shock politics is loud, organized grassroots pressure on all political parties: they have to know right now that after seven years of Bush, Americans are becoming shock resistant.

Naomi Klein - Now is the time to resist Wall St.'s shock doctrine.

The Iraq war cost US its financial system

The US government last weekend decided it could no longer risk taxpayers’ money by supporting Lehman Brothers and on Monday that bank filed for bankruptcy. In assessing the wisdom or otherwise of this decision one fact should be kept in mind: the International Monetary Fund estimates that the total cost to banks of losses stemming from the subprime crisis will amount to $1,000bn; the cost of the war in Iraq, according to other estimates, particularly one by Linda Bilmes and Joseph Stiglitz, will come to $3,000bn.

The US has shot its financial bolt in Iraq, which may cost the country its financial system. It quite simply no longer has the money to stop a run on banks. Seen in this light, the war in Iraq brings to mind the ruinous decision on the part of the French ancien régime to finance Lafayette’s campaign during the American revolution.

John M. Coates, University of Cambridge, Cambridge, UK

Office Space Redux....,

Corporate India is in shock after a mob of workers bludgeoned to death the chief executive who sacked them from a factory in a suburb of Delhi.

Lalit Kishore Choudhary, 47, the head of the Indian operations of Graziano Transmissioni, a manufacturer of car parts that has its headquarters in Italy, died of severe head wounds on Monday after being attacked by scores of laid-off employees, police said. The incident, in Greater Noida, followed a long-running dispute between the factory’s management and workers demanding better pay and permanent contracts.

It is understood that Mr Choudhary, who was married with one son, had called a meeting with more than a hundred former employees who had been dismissed after an earlier outbreak of violence at the plant. He wanted to discuss a possible reinstatement deal.

A police spokesman said: “Only a few people were called inside. About 150 people were waiting outside when they heard someone from inside shout for help. They rushed in and the two sides clashed. The company staff were heavily outnumbered.”

In the Times Online - CEO murdered by mob of sacked Indian workers

Solar Panels are Vanishing...,

Solar power, with its promise of emissions-free renewable energy, boasts a growing number of fans. Some of them, it turns out, are thieves.

Just ask Glenda Hoffman, whose fury has not abated since 16 solar panels vanished from her roof in this sun-baked town in three separate burglaries in May, sometimes as she slept. She is ready if the criminals turn up again.

“I have a shotgun right next to the bed and a .22 under my pillow,” Ms. Hoffman said.

Police departments in California — the biggest market for solar power, with more than 33,000 installations — are seeing a rash of such burglaries, though nobody compiles overall statistics.

Investigators do not believe the thieves are acting out of concern for their carbon footprints. Rather, authorities assume that many panels make their way to unwitting homeowners, sometimes via the Internet. In the NYTimes - Solar Panels Are Vanishing, Only to Reappear on the Internet

When the oil stops flowing

It will come as a shock to most Americans and the media, but as the election reaches a crescendo on the issue of preparedness and energy, neither presidential candidate - nor anyone in local, state or federal government - has developed a contingency plan in the event of a protracted oil cut-off. It is not even being discussed. Government has prepared for hurricanes, anthrax, terrorism and every other disaster, but not the one threatened daily - a protracted oil stoppage, whether caused by terrorism, intervention in the Persian Gulf or a natural disaster.

It is like seeing a hurricane developing without a disaster plan or evacuation route. Our allies have oil shortage interruption contingency plans, but America does not.

THE BEST experts predict that if we suffer as much as 10% for any period of time, let alone 20%, it will be a neighbor-against-neighbor "Mad Max" scenario as food shortages swell and a storm of economic collapse surges across the country. Indeed, experts have been warning about this looming calamity for years. But the government and presidential candidates refuse to even consider the possibility or develop a contingency plan.

Yet our allies have developed oil contingency legislation and other administrative plans that will permit their nations to survive a stoppage. These measures include severe vehicle traffic reductions, enabling fast alternative fuel production and mass vehicle retrofitting, as well as rush public transit enhancement, and mandated changes in driving habits. Unquestionably, for America to survive such a catastrophe will require a very painful, multilayered program of immediate-term, short-term, mid-term and long-term fixes that will change our society and transform it off oil. The nation has no real alternative fuel or retrofitting infrastructure. But every lawmaker, mayor, governor and every candidate must develop such a plan - and now.

When the oil stops flowing in the Jerusalem Post.

John McCain is Energy Illiterate

"John McCain is energy illiterate," Simmons is saying. "He's just witless about this stuff. As a lifelong Republican, I'm supporting Obama." A dozen oil and gas men sitting around a conference table in Lafayette, La., chuckle nervously as he continues. "McCain says, 'Oh, we're going to wean ourselves off foreign oil in four years and build 45 nuclear plants by 2030.' He doesn't have a clue."

McCain's midsummer move to begin campaigning on a platform of more offshore drilling has only hardened Simmons's position. "What a hypocrite," says Simmons, who supported McCain's rival Mitt Romney in the primary - no surprise given Simmons's history with the Romney family. "Here's a man who for at least the past 15 years has strenuously, I mean strenuously, opposed offshore drilling. And now it's 'drill, drill, drill.' And he doesn't have any idea that we don't have any drilling rigs. Or that we don't have any idea of exactly where to drill." (As for McCain's running mate, Sarah Palin, Simmons says: "She's a very colorful person, but I don't think there's a scrap of evidence that she knows anything about energy.") - Matt Simons in Fortune - Here comes $500 oil.

How You Got Here

Straight Banksta Mack....,

A kleptocratic class has taken over the economy to replace industrial capitalism. Franklin Roosevelt’s term “banksters” says it all in a nutshell. The economy has been captured – by an alien power, but not the usual suspects. Not socialism, workers or “big government,” nor by industrial monopolists or even by the great banking families. Certainly not by Freemasons and Illuminati. (It would be wonderful if there were indeed some group operating with centuries of wisdom behind them, so at least someone had a plan.) Rather, the banksters have made a compact with an alien power –not Communists, Russians, Asians or Arabs. Not humans at all. The group’s cadre is a new breed of machine. It may sound like the Terminator movies, but computerized Machines have indeed taken over the world – at least, the White House’s world.

Here is how they did it. America's Own Kleptocracy

BRIC (Brazil, Russia, India, China)

And what have we heard from the new centers of wealth and power — China, India, Brazil, Russia, the Gulf states — about America’s financial agony over the past week? Zilch.

Well, not quite. Asked about the crisis, Luiz Inácio Lula da Silva, the Brazilian president, said: “What crisis? Go ask Bush.”

Thanks, Lula. Brazil is sitting on $208 billion of its own in reserves, so perhaps Lula would say his flippancy is justified. But I don’t think it is.[...]

The world has changed in the past decade. There’s been a steady transfer of wealth away from the United States in a shift most Americans have not yet grasped. But there has been no accompanying transfer of responsibility. New powers are free-riding as if it were still the American century.[...]

Let’s be clear: this is an American mess forged by the American genius for new-fangled financial instruments in an era where the mantra has been that government is dumb and the markets are smart and risk is non-existent. The responsibility for undoing the debacle is chiefly American, too.[...]

I know, you reap what you sow. Nobody’s itching to help the Bush administration. World central banks did inject billions in concerted action to help stabilize money markets. But the U.S. has essentially been on its own. Now foreign banks with U.S. affiliates will want a slice of the $700 billion bailout. That doesn’t make sense until the burden of this rescue starts reflecting a globalized world.

The Fleecing of America

Cash for Trash

The Potentially Restive Crowd....,

In Manassas Park and nearby communities in Prince William County, many people see the bailout as a violation of the basic rule that people and institutions must live within their means or face the consequences.

Kevin Newman, 42, knows how hard up people can get. He owns Ace Pawn, in a shopping center on Route 28 next to a newly vacant Checkers fast-food outlet. Newman spends his day lending money to people. He sees them at their most desperate. From a back room he pulls out a brand-new, sparkling Rickenbacker guitar that someone had gotten for his birthday and pawned just weeks later. His shop is filled with precious jewelry that people surrendered for cash. He had a customer -- he won't say who -- who pawned a Washington Redskins Super Bowl ring. A Sense of Resentment Amid the 'For Sale' Signs (hat tip to P6)

Wasilla Alaska 2015

Earth 2100 - In an unprecedented television and internet event, ABC News is asking you to help answer perhaps the most important question of our time — What could our world look like over the next one hundred years if we don’t act now to save our troubled planet?

The world’s brightest minds agree that the “perfect storm” of population growth, resource depletion and climate change could converge with catastrophic results.

We need you to bring this story to life — to use your imagination to create short videos about what it would be like to live through the next century if we stay on our current path. Using predictions from top experts, we will feed you detailed briefings from the years 2015, 2050 and 2100 — and you will report back about the dangers that are unfolding before your eyes.

Uncorrectable....,

Have you seen the photo of Republican vice presidential nominee Sarah Palin brandishing a rifle while wearing a U.S. flag bikini? Have you read the e-mail saying Democratic presidential nominee Barack Obama was sworn into the U.S. Senate with his hand placed on the Koran? Both are fabricated -- and are among the hottest pieces of misinformation in circulation.

As the presidential campaign heats up, intense efforts are underway to debunk rumors and misinformation. Nearly all these efforts rest on the assumption that good information is the antidote to misinformation.

But a series of new experiments show that misinformation can exercise a ghostly influence on people's minds after it has been debunked -- even among people who recognize it as misinformation. In some cases, correcting misinformation serves to increase the power of bad information.

The Power of Political Misinformation

Liberals and Conservatives

Psychologist Jonathan Haidt studies morality and emotion in the context of culture. He asks: Why did humans evolve to have morals -- and why did we all evolve to have such different morals, to the point that our moral differences may make us deadly enemies? It's a question with deep repercussions in war and peace -- and in modern politics, where reasoned discourse has been replaced by partisan anger and cries of "You just don't get it!"

Haidt asks, "Can't we all disagree more constructively?" He suggests we might build a more civil and productive discourse by understanding the moral psychology of those we disagree with, and committing to a more civil political process. He's also active in the study of positive psychology and human flourishing.

A Leader Who Loves Us.......,

Americans have been treated with contempt for so long that we have become inured to our own society's suffering.

This is what I want for our country, more than anything. I want a leader who can love us. This is not what we usually say, or think of, when we are trying to choose a leader. People like to talk about "experience" and war and the economy, and making Americans look good again. I care about all these things. But when the lights are out and I'm left with just the stars in a super-dark sky, and I feel the new intense chill that seems to be the underbreath of even the hottest day, when I know that global warming may send our planet into a deep freeze even before my remaining years run out, then I think about what it is that truly matters to me. Not just as a human, but as an American.

I want a leader who can love us. And, truthfully, by our collective behaviour, we have made it hard to demand this. We are as we are, imperfect to the max, racist and sexist and greedy above all; still, I feel we deserve leaders who love us. We will not survive more of what we have had: leaders who love nothing, not even themselves. We know they don't love themselves because if they did they would feel compassion for us, so often lost, floundering, reeling from one bad thought, one horrid act to another. Killing, under order, folks we don't know; abusing children of whose existence we hadn't heard; maiming and murdering animals that have done us no harm.

The present administration and too many others before it have shown the most clear and unapologetic hatred for the American people. A contempt for our minds, our bodies and souls that is so breathtaking most Americans have numbed themselves not to feel it. How can they do this or that awful unthinkable thing, we ask ourselves and each other, knowing no one in power will ever bother to answer us. I'm sure we, the American people, are the butt of jokes by those in power. Our suffering not making a dent in their pursuit of goals that almost always bring more tragedy and degradation to our already fragile, disintegrating republic.

Alice Walker writing in the Guardian. You know how we role here. Better hug yourself, because Santa Claus WILL NOT BE coming to town.....,

The City's Greatest Lie

In May this year a score of private yachts anchored off Cap d'Antibes for a party during the Cannes Film Festival. Ranging in cost from $150m to $350m, the yachts were spread out in a pecking order, with entertainment mogul Barry Diller's huge and graceful sailing ship taking the position nearest the Eden Roc hotel, while those belonging to such people as Philip Green and George Lucas lay a little out to sea.

Watching these boats, their guests being ferried to and fro on high-powered tenders and the paparazzi assembled on a rocky shoreline like a colony of hungry cormorants, I considered an incredible figure that I had been told that evening. If you buy a $150m yacht, you can expect to spend roughly the same amount again in the first two years of operation, which when you know how little the yachts are actually used makes the whole business of owning one doubly incomprehensible.

I was not the only one to stare into that rainy evening and think: this cannot last; this must not last. The owners of these yachts are so rich that they may not even be touched by the banking crisis and ensuing slump, but this display of wealth, the pressure on the Earth's resources, the gross inequality that these craft represent in a world where 1.2 billion people live on less than a dollar a day is unsustainable economically and morally.

What has happened in the capital markets over the last few weeks is about more than the machinery going haywire and governments and institutions failing to regulate properly. We now understand - or soon will - that this particular era of capitalism penalised all but the super-rich and the super-greedy. It is a story about one tiny group of people amassing fortunes at the expense of a very large group of people, who stretch from the American Midwest to the eight million people said to be near starvation in the Ogadan region of Ethiopia.

Hypertigerish commentary in this morning's Observer.

Stunned and Clueless....,

Look at all the clowns on the bandwagon wanting to "do something" even though "No One Knows What to Do".

Clowns On The Bandwagon

• President Bush via White House spokeswoman Dana Perino
• Senate Banking Committee Chairman Christopher Dodd
• Senator Charles Schumer
• Representative Paul Kanjorski
• Senator Richard Shelby
• House Speaker Nancy Pelosi
• House Majority Leader Steny Hoyer
• House Financial Services Committee Chairman Barney Frank

UPDATE - BUT THEY HAVE EXTENDED A $700 BILLION LINE OF CREDIT!!!!!!

Congressional Leaders Stunned by Warnings

It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.

Credit Crisis Out of Control- US Government Admission "No One Knows What to Do"

In the wake of Global Financial Seizures that has affected housing, the stock market, and bonds Reid Says `No One Knows What to Do' to Solve Crisis .

The U.S. Congress is unlikely to pass new legislation to overhaul financial regulations this year because "no one knows what to do,'' Senate Majority Leader Harry Reid said today.

"We are in new territory, this is a different game," Reid said at a briefing in Washington. Neither Federal Reserve Chairman Ben Bernanke nor Treasury Secretary Henry Paulson "know what to do but they are trying to come up with ideas," Reid said.

White House spokeswoman Dana Perino said today that the administration is willing to consider a suggestion in Congress to have the U.S. buy distressed mortgages, akin to the role the Resolution Trust Corp. played in disposing of bad debts of from savings and loan associations in the late 1980s and early 1990s.

Senate Banking Committee Chairman Christopher Dodd said the Federal Reserve has the authority to act as an "effective Resolution Trust Fund" to buy up and dispose of bad debt stemming from the subprime mortgage crisis.

"The Fed has the authority to move in this area," Dodd told reporters in Washington.

America’s self-inflicted societal collapse

American Perspectives

American Mainstream Perspective
The vast majority of our population, mainstream America, maintains the belief that we are on the road to the promise land—perpetual economic growth and prosperity enabled by unlimited natural resources. Moreover, they believe that our American way of life is a birthright, our destiny; “the American way of life is not negotiable”.

Concerned Citizen Perspective
A small but growing minority of concerned citizens, the informed few, understands that we are actually on the highway to hell—the road to societal collapse. They implore us to slow down—to “conserve natural resources”, to “reduce our impact on the environment”, to “balance our budgets”… But we dare not do anything “too drastic”; it wouldn’t be “socially acceptable”.

Reality
The reality is that we are running flat out on the highway to hell, and that societal collapse is imminent—possibly within 5 years, probably within 15 years, and almost certainly within 25 years. Our only rational course of action is to “get off” the highway—to transition quickly and beginning immediately to a sustainable lifestyle paradigm. The consequences associated with “getting off” will be very painful—significant reductions in our population level and material living standards—but they pale in comparison to the consequences associated with “staying on”.

Chris Clugeston writes an impressive and encompassing article at the Energy Bulletin - do check it out.

Brigade homeland tours start Oct. 1

The 3rd Infantry Division’s 1st Brigade Combat Team has spent 35 of the last 60 months in Iraq patrolling in full battle rattle, helping restore essential services and escorting supply convoys.

Now they’re training for the same mission — with a twist — at home.

Beginning Oct. 1 for 12 months, the 1st BCT will be under the day-to-day control of U.S. Army North, the Army service component of Northern Command, as an on-call federal response force for natural or manmade emergencies and disasters, including terrorist attacks.

It is not the first time an active-duty unit has been tapped to help at home. In August 2005, for example, when Hurricane Katrina unleashed hell in Mississippi and Louisiana, several active-duty units were pulled from various posts and mobilized to those areas.

But this new mission marks the first time an active unit has been given a dedicated assignment to NorthCom, a joint command established in 2002 to provide command and control for federal homeland defense efforts and coordinate defense support of civil authorities.

Here's the moneyshot quote;

In the meantime, they’ll learn new skills, use some of the ones they acquired in the war zone and more than likely will not be shot at while doing any of it.

They may be called upon to help with civil unrest and crowd control or to deal with potentially horrific scenarios such as massive poisoning and chaos in response to a chemical, biological, radiological, nuclear or high-yield explosive, or CBRNE, attack.

The 1st BCT’s soldiers also will learn how to use “the first ever nonlethal package that the Army has fielded,” 1st BCT commander Col. Roger Cloutier said, referring to crowd and traffic control equipment and nonlethal weapons designed to subdue unruly or dangerous individuals without killing them.

“It’s a new modular package of nonlethal capabilities that they’re fielding. They’ve been using pieces of it in Iraq, but this is the first time that these modules were consolidated and this package fielded, and because of this mission we’re undertaking we were the first to get it.”

ArmyTimes - Your online resource for everything Army

The Strange Case Of The Wallflower Wealthy

these days, ostentatious displays of wealth are out. Nobody is allowed to talk about how much money they are making; no one is even allowed to talk about how much money they have lost. No one dares to be seen lounging around a golf course, skydiving out of a private jet or booking passage on the space shuttle, not while the four horsemen of the apocalypse are ripping through town. Everyone is expected to stay at home moping and eating celery stalks. If people who don't have money are hurting, people who do have money are expected to act as if they are not. This defeats the whole purpose of having money.

It also flies in the face of everything Americans believe about themselves, and it brings down the mood of the country. Study after study shows that Americans without money do not resent the rich, because they fully expect to join their ranks some day. What's more, they find the exploits of the rich both exciting and inspirational.

Forbes cheerleads the top.

The Money Masters

THE MONEY MASTERS is a 3 1/2 hour non-fiction, historical documentary that traces the origins of the political power structure that rules our nation and the world today. The modern political power structure has its roots in the hidden manipulation and accumulation of gold and other forms of money. The development of fractional reserve banking practices in the 17th century brought to a cunning sophistication the secret techniques initially used by goldsmiths fraudulently to accumulate wealth. With the formation of the privately-owned Bank of England in 1694, the yoke of economic slavery to a privately-owned "central" bank was first forced upon the backs of an entire nation, not removed but only made heavier with the passing of the three centuries to our day. Nation after nation, including America, has fallen prey to this cabal of international central bankers.

The President Speaks To The Nation

FDR's Fireside Chat on Backing Up the Banking System

The failure of many banks, runs on banks, and a general climate of financial panic played an important role in the Great Depression. After taking office in early March 1933, President Franklin D. Roosevelt made a radio address (a "Fireside Chat") outlining federal strategy to reopen the banking system. The system had been closed as part of a "bank holiday" declared by president to halt panics and runs. Although many other aspects of New Deal policy often receive more attention, backing up the banking system at least prevented the Depression from worsening. Prevention of financial panics remains an important economic policy in the contemporary world. This is Part 1.

More on AIG.....,

That interesting LATOC piece on AIG brought to our attention by Big Don was excerpted without attribution from a much more in-depth article published in 2001 by Michael Ruppert at From the Wilderness. The original article may be worth your perusal.

On the special value of reinsurance as a vehicle for intelligence gathering Fritz wrote:

"Such convoluted business dealings were traced largely through the work of Ernest Stiefel, a member of the intelligence unit who diagrammed the way insurance companies pooled their risks, invested in and insured each other and, as a result, willfully or witlessly shared data about nations at war. 'Stiefel mapped the entire system, said [Timothy] Naftali, a historian at the University of VirginiaÕs Miller Center of Public Affairs. "Each time I take a piece of your risk, youÕve got to give me information. I am not going to reinsure your company unless you give me all the documents. ThatÕs great intelligence informationÉ"

Later in the story Fritz confirmed the value of reinsurance as a vehicle for money laundering:

"With the Axis defeat imminent, U.S. intelligence officials focused greater attention on ways the Nazis would try to use insurance to hide and launder their assets so they could be used to rebuild the war machine..."

And how did Starr benefit from his service? Fritz writes:

"Starr sent insurance agents into Asia and Europe even before the bombs stopped falling and built what eventually became AIG, which today has its world headquarters in the same downtown New York building where the tiny OSS unit toiled in the deepest secrecy.

Starr died in 1968, but his empire endures. AIG is the biggest foreign insurance company in Japan. More than a third of its $40 billion in revenue last year came from the Far East theater that Starr helped carpet bomb and liberate.

Who'll Bail Out Uncle Sam?

CBS' Mark Knoller On The National Debt, And Who Picks Up the Tab

The federal government may seem like a financial knight on a white steed riding to the rescue of big companies in trouble. The irony is that Uncle Sam’s got enormous money problems of his own.

The government is far deeper in debt than any of the companies it’s bailing out.

As of this morning, the national debt stands at over $9.634 trillion. That’s trillion - with a "T." And that’s nearly $4 trillion more than it was on the day President Bush took office.

This year alone, it’s costing taxpayers more than $230 billion just to pay the interest on the national debt.

And it’s getting bigger every day thanks to the relentless rush of the government spending money it has to borrow. The federal deficit for the fiscal year ending September 30 is expected in the range of $400 billion - close to the all-time high.

In fact, the government doesn’t have the $85 billion needed to bailout insurance giant American International Group.

Still Pretending.....,

That we're not witnessing financial Armageddon.

"This has been the worst financial crisis since the Great Depression. There is no question about it," said Mark Gertler, a New York University economist who worked with fellow academic Ben Bernanke, now the Federal Reserve chairman, to explain how financial turmoil can infect the overall economy. "But at the same time we have the policy mechanisms in place fighting it, which is something we didn't have during the Great Depression."

Spreading Disease

The U.S. financial system resembles a patient in intensive care. The body is trying to fight off a disease that is spreading, and as it does so, the body convulses, settles for a time and then convulses again. The illness seems to be overwhelming the self-healing tendencies of markets. The doctors in charge are resorting to ever-more invasive treatment, and are now experimenting with remedies that have never before been applied. Fed Chairman Bernanke and Treasury Secretary Henry Paulson, walking into a hastily arranged meeting with congressional leaders Tuesday night to brief them on the government's unprecedented rescue of AIG, looked like exhausted surgeons delivering grim news to the family.

Fed and Treasury officials have identified the disease. It's called deleveraging, or the unwinding of debt. During the credit boom, financial institutions and American households took on too much debt. Between 2002 and 2006, household borrowing grew at an average annual rate of 11%, far outpacing overall economic growth. Borrowing by financial institutions grew by a 10% annualized rate. Now many of those borrowers can't pay back the loans, a problem that is exacerbated by the collapse in housing prices. They need to reduce their dependence on borrowed money, a painful and drawn-out process that can choke off credit and economic growth.

Worst Crisis Since '30s, With No End Yet in Sight

But the fact of the matter, is that the end IS in sight. It's just a very bleak and surprisingly rapid end that lots and lots of other interested observers saw coming many miles away too. Why not the operational management candidates sanctioned by the powers that be?

National security implications of AIG bailout...

This just in from Big Don;(explaining why we taxpayers now own an insurance company)

Editor's Note #1: The Bailout of AIG, the CIA, and Covert Operations

By now you no doubt have heard about the AIG bailout. If not, just check out this thread at the LATOC Forum. There is, however, something you almost certainly haven't heard about which is that the insurance business is heavily involved in covert operations. Some of you may be thinking "Huh? Insurance companeis and covert operations?! Wow, this is some real nutballery, even for LATOC". Well if so then just consider the following excerpts from an article entitled "The Secret (Insurance) Agent Men" by Los Angeles Times staff writer Mark Fritz, originally published on September 22nd, 2000.

(Security is Number One...)

Lord Make a Way, Lord Make a Way.....,

The pastor whose prayer Sarah Palin says helped her to become governor of Alaska founded his ministry with a witchhunt against a Kenyan woman who he accused of causing car accidents through demonic spells.

At a speech at the Wasilla Assembly of God on June 8 this year, Mrs Palin described how Thomas Muthee had laid his hands on her when he visited the church as a guest preacher in late 2005, prior to her successful gubernatorial bid.

In video footage of the speech, she is seen saying: “As I was mayor and Pastor Muthee was here and he was praying over me, and you know how he speaks and he’s so bold. And he was praying “Lord make a way, Lord make a way.”

“And I’m thinking, this guy’s really bold, he doesn’t even know what I’m going to do, he doesn’t know what my plans are. And he’s praying not “oh Lord if it be your will may she become governor,” no, he just prayed for it. He said “Lord make a way and let her do this next step. And that’s exactly what happened.”

- Full monty at timeonline blog - Palin linked electoral success to prayer of Kenyan witchhunter. Apparently, Bishop Muthee vetted Palin to approximately the same extent as the McCain campaign did.

McCain's campaign has sent at least one dozen researchers and lawyers to Alaska to pore over Palin's background, ready to respond to questions about her tenure as governor and mayor of Wasilla, a small town outside Anchorage. Griffin has been leading the team in Alaska, which includes operatives of the Republican National Committee.

Republicans are rebutting what they describe as smears against Palin. Last week, McCain's campaign formed a "truth squad," which includes current and former GOP politicians who agree to speak with reporters. Heading up the effort from Arlington, Va., are Mark Paoletta and O'Callaghan, both Republican lawyers, and Brian Jones, a former communications director for McCain.

Of course now the McCain campaign is working feverishly to rectify or suppress the continuous hemorrhaging of idiosyncratic details about Paling, her background, beliefs, family, politics, etc...,

Why Even Cheaper Oil Is Grim News

According to Businessweek - the sharp drop in crude prices is further fallout from the Wall Street crisis and evidence of economic weakness;

Any other day, Wall Street would have cheered a 5.4% drop in oil prices. That decline for crude futures, however, was accompanied by a nearly 5% tumble for the Standard & Poor's 500 index on Sept. 15. Stocks—as was made painfully clear to investors—are no longer trading inversely with oil prices.

Analysts say that investors, who had been pouring funds into commodities as an alternative to creaky stock markets, are now pulling out of the market. The withdrawal reflects a fear that the economic picture will remain bleak, causing reduced demand in both developed and developing countries. The price of a barrel of West Texas Intermediate crude oil slid $5.47, to settle at $95.71 on the New York Mercantile Exchange (CME). It was the first settlement below $100 per barrel in six months. "A weak economy and financial turmoil mean lower demand; that means lower [oil] prices," says Craig Pirrong, professor of finance and energy markets at the Bauer College of Business at the University of Houston.

If lower oil prices are here to stay, will consumers return to old patterns of consuming more petroleum products? Many analysts think not. "The demand destruction is irreversible," says Schork. "It's a situation of once bitten, twice shy. Prices may be down for now, but consumers know they could eventually move high again."

Corporations

Click the image to view and hear the presentation.

Ignition, in T-Minus......,

ISLAMABAD, Pakistan - Pakistan's army said Tuesday that its forces have orders to open fire if U.S. troops launch another raid across the Afghan border, raising the stakes in a dispute over how to tackle militant havens in Pakistan's unruly border zone.

Pakistan's government has faced rising popular anger over a Sept. 3 ground attack by U.S. commandos into South Waziristan, a base for Taliban militants killing ever more U.S. troops in Afghanistan. Pakistan says about 15 people were killed, all of them civilians.

The new firing orders were disclosed by Pakistani army spokesman Maj. Gen. Athar Abbas in an interview Tuesday with The Associated Press.

Abbas said Pakistani field commanders have previously been tolerant about international forces crossing a short way into Pakistan because of the ill-defined and contested nature of the mountainous frontier.

"But after the (Sept. 3) incident, the orders are clear," Abbas said. "In case it happens again in this form, that there is a very significant detection, which is very definite, no ambiguity, across the border, on ground or in the air: open fire."

The Fundamentals of Our Economy are at Risk

There IS a Risk of a Bank Run...,

Thank goodness for browser histories. Otherwise this phenomenal link and video would have been lost in the slipstream. I could not find it by searching this afternoon. Roubini calls this the perfect storm of the century. We have not seen anything like this since the Great Depression. In spite of doing everything under the sun, the situation is not getting any better.

Americans are justified to be worried, says Nouriel Roubini, of NYU's Stern School and RGE Monitor, who notes there is already a "slow-motion run on retail banks" occurring nationwide.

That "run" could accelerate as people realize the FDIC fund has about $50 billion to "insure" about $1 trillion in assets at the nation's financial institutions, says Roubini. "They're going to run out of money" unless Congress acts soon to recapitalize the FDIC.

In addition, the recent spike in number of banks on the FDIC's "troubled list" is only through June, meaning even that inflated number understates the problem.

The intent here isn't to add to people's anxieties, but Roubini is one of the few market watchers to correctly predict the severity of this ongoing credit crisis. If nothing else, he says people with accounts exceeding $100,000 in value should spread their money - and the risk - among different firms.

There is no systemic approach to dealing with this problem. Plugging holes one after another and no end in sight.

Foreign Ownership of U.S. Debt?

A few months ago, I asked the semi-rhetorical question, "Will China be Mad?" if the U.S. financial crisis costs them a trillion dollars or so. Subsequently, I wondered if it really even matters. In any event, Nouriel Roubini discussed it with brutal candor yesterday in yet another Tech Ticker piece - Big Risk: Surging Debt Makes U.S. More Dependent on China, Russia, Gulf States.

The big risk is that foreign holders of Treasuries will no longer accept low interest rates to help fund U.S. debt spending, says Roubini, noting countries like China, Russia and oil-producing nations in the Middle East have becoming increasingly important holders of Treasuries. Should they demand higher rates to hold U.S. debt or, worse, dump their holdings, it could have profound ramifications on the U.S. economy and the value of the dollar.Roubini further notes the Federal Reserve has put its balance sheet -- and independence -- at risk via its intimate involvement in thus-far failed attempts to stem the crisis.

It's tempting to dismiss the notion of a "run" on the U.S. government as unthinkable and some bears have been warning for years, even decades, about such a worst-case scenario. But after the events of this weekend, much less the past six months, it's clear that (almost) anything is possible and no scenario too "outrageous" to seriously contemplate.

The demise of Lehman Brothers, Merrill Lynch, and Bear Stearns this year has investors contemplating the long-term outlook for other once-venerable institutions, including Dow members Citigroup, AIG and Bank of America. But there's an even bigger financial institution with greater debt and an increasing level of bad loans on its books: The U.S. government.

Not Very Interesting....,

It is now thought that as many as 1,000 people have died so far in Haiti, with one million made homeless out of a population of 8.7 million. Rescue groups were last week reported to be unable to reach many villages across the southern region or to Gonaives, Haiti's third-largest city, which was cut off with 300,000 homeless residents. The city's population has been stranded for days without food or drinking water.

Recent performance fits as part of a consistent bias in media reporting. In the latest NACLA Report on the Americas, Dan Beeton of the US-based Center for Economic and Policy Research interviewed several US journalists who have reported from Haiti. Speaking on condition of anonymity, one described a common view among editors:

"Everyone knows the place [Haiti] is a mess, so what are you going to tell me that's new? What goes on there does not affect people in the US." (Beeton, 'Bad News From Haiti: U.S. Press Misses the Story,' September/October 2008, NACLA. See the full article here:)

This indifference has led to an appalling level of non-reporting, not just of the latest floods, but also of the killing of unarmed civilians by United Nations forces (Minustah), the Haitian National Police, and death squads.

Full Monty at MediaLens - "NOT VERY INTERESTING" - Haiti, New Orleans And Media Hypocrisy

The Fundamentals of the Economy are Strong