Thursday, March 6, 2008

SAR #8067

Our financial institutions are apparently too big to fail
and too weak to work.

Believe it or don't: "America is in the lead when it comes to energy independence; we’re in the lead when it comes to new technologies; we’re in the lead when it comes to global climate change — and we’ll stay that way." George 'No Kyoto' Bush, March 5, 2008

Headline : Pemex to boost output in declining Cantarell field. Reports say the average output at Mexico's Cantarell oil field will decline 20% this year, to 1.2 mbd compared with 1.5 million a day in 2007. Boost must have a different meaning in Spanish.

Florida Revisited: An administration plan sought to undo the results of elections in the West Bank and Gaza in January 2006 which Hamas won. Bush didn't understand why elections in Gaza were any different than Florida or Ohio.

See Spot Run: CENTCOM commander Adm. William Fallon has consistently opposed the “surge” in Iraq and has vowed that an attack on Iran “will not happen on my watch.” Word is, his watch will soon stop running.

Mistaken Identity: Iraq and China are entering into a $1.2-billion oil contract that was originally agreed to in 1997 under Saddam Hussein. Funny, I thought our soldiers were dying for our oil. Or at least for Exxon

Penny, Pound: The Bush administration says the 2002 congressional Iraq authorization gives it "authorization to defend the national security of the United States" against continuing interference from Congress.

Captain Renault: FBI Director Robert Mueller was shocked to learn his agents are still abusing national security letters to illegally obtain information on Americans. The usual promises will be made.

Peak Oil For Dummies : Less than 0.5% of the US population are farmers. The remaining 99.5% of us are dependent on oil based pesticides, farm equipment, food processing, and transport of our food. At our grocers we put our food in plastic bags and pay for them with our plastic credit cards.

Spades: UBS sold a $24.1 billion portfolio of Alt-A mortgages to Pimco for 70 cents on the dollar. Is UBS that strapped for cash? Are the guys over at Pimco dumber than a board? Either way, one of them is going to end up holding the Queen of Spades.

Whose De'fault? Carlyle Capital, the publicly traded arm of Carlyle Group, failed to meet four margin calls on the $21.7 billion it has invested in Fannie Mae issued securities. Carlyle Group is Daddy Bush's piggy bank. Want to buy some slightly used mortgage bonds?

$4.00 A Gallon? Citigroup last June had to pay $9,700 to insure performance on $10 million in debt (to guarantee payment if Citi went belly up). In January the cost was $72,000. Today Citi had to pay $190,000 for the same insurance. And you thought the price of gas was going up.

A Nation of Renters: According to the Fed, for the first time ever, banks own more of the houses in the US than the people whose names are on the documents; 52 - 48%. That's at current prices. As house prices fall, the banks' share rises. Until foreclosure, then they own the whole thing. That could happen to nearly 20 million houses this year.

Happy Days: Let's not be too gloomy here. After all, other than over-leveraged credit, bad debts, sinking home prices, disappearing jobs, shrinking wages, cash strapped consumers, rising oil prices, a sinking US dollar, $500 trillion in derivatives going bad, rampant overcapacity, underfunded pension plans, looming boomer retirements, no funding for Medicaid, no funding for Medicare, and no Social Security trust fund, everything is just fine.

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