SAR #8126

What makes you think the breakdown of civilization
will be linear, not exponential?

Pinpoint: The US fired guided missiles into a teeming Baghdad slum, damaging a hospital and wounding nearly two dozen people. Seventeen ambulances were destroyed. The US blamed the militants for making them use Iraqi civilians as targets.

Told You So: Bank of America now says that its takeover of Countrywide does not include any of its $38 billion in debts, and that "there is no assurance that any such debt would be redeemed, assumed or guaranteed." Countrywide also owes over $50 billion to the Fed that no one but Ben Bernanke expects will ever be repaid.

Without A Trace: Bush apparently thinks that if he closes Guantanamo by the end of his term, he won't be tried for war crimes. "It is a very complicated matter," said NSC spokesman Johndroe. Seems pretty straight-forward to me.

How Long is 'Wait'? The bank needs 10% down to stand a chance of getting paid back; because borrowers with no equity are likely to walk away. For a $200,000 home that's $20,000 down. You will have to put $325 a month aside in a nest egg fund, every month for 5 years, before you can start looking at houses. See the problem?

Simple Math: Oil production has essentially plateaued for the last few years, with some producers declining (Mexico, rapidly. Russia, slow but certain) and others (Saudi Arabia) apparently doing the best they can. If this were widgets, $115 a widget would get more widgets built. But it's oil, and the Saudis and all the others simply don't want to make more money. Either that, or they can't make any more widgets than they are right now.

ATM Robbed: S&P has stopped rating second mortgage bonds because of "anomalous and unprecedented" borrower behavior. Certain cads are not repaying their part of some $1.3 trillion, and holders of second liens get pretty much nothing upon foreclosure.

Geometry: S&P reports that "not only have houses in the 20 largest MSA's dropped in price every month for the last six months, they are still in decline, the curve is steepening and price declines are getting worse."

Just A Note: Defense Secretary Robert Gates says that sending a second US aircraft carrier task force to the Persian Gulf is not a threat, simply a "reminder" to Iran. He was out of note paper.

Explained, Again: In finance, ROI is the key. In energy it is energy returned on energy invested. The more money/energy it takes to get the oil, the more it costs per energy unit. The cheap oil is gone and it takes a lot of energy/money to get oil from the ocean floor and oil sands. Oil is expensive because oil has become scarce and hard to get.

How Dry California Am: California faces of water shortages and possibly rationing this summer. Record dry weather in March and April, a fast-shrinking snowpack and below-normal reservoir levels combine to make the the most serious water situation in 30 years, and but a harbinger of times to come.

Act Of War: The US lobbed four cruise missiles into a small town, killing 30 townspeople. It was unclear if the intended target had been hit. Where? Does it matter? The US reserves the right to kill anybody, anywhere, in any way it wishes. The only places the US is at war are Iraq and Afghanistan, and it was neither of them.