SAR #10100/Weekender

America's political will has become a won't.

Replay:  Gasoline prices in the US are edging up, the Brits have broken the record prices set in the summer of 2008. Summer's coming.

Corporate Socialism:  The EPA says Houston-based petrochemical giant Lyondell is responsible for $5 billion in cleanups in a dozen places it has profitably polluted.  Lyondell says it's going bankrupt, so put it on the taxpayer's tab.  It's a standard part of business plans, especially the extractive industries - hide the profits and leave the cleanup to the citizenry.

On Display:  The rich are getting richer, the poor are getting poorer.  In the last 30 years the top 1% have doubled their income while the bottom 90% lost ground.  The top 10% command 70% of the wealth and 90% of the stocks and bonds.  The other 90% of us are failures.

Perspective:  Based on its budget, the United States government is a huge non-profit insurance company (Social Security, Medicare, and Medicaid), with an army.

Time Shifting:  In 2004 the Republicans pushed through an accounting change (GASB 45) that makes public pension and retiree health costs appear larger than they are.  Only the amount to be paid out this year is part of this year's expenses, but the GOP insisted that the entire obligation spread over 20 or 30 or more years in the future has to be reflected as a debt this year, even though it's not.  Similarly, the ganormus trillions in Social Security's future payments are not today's debts.  So we don't have to dig up those trillions in taxes this year – only a few tens of billions more than the system brings in in taxes.  Certainly less than we've given AIG. And the whole reason that Social Security has any of those government IOU's is that Ronnie and the Republicans began stealing from Social Security taxes back in the 80's.  It's a lot like Daylight savings – in the end it doesn't lengthen the day.  What the Congress avoided raising in taxes then will have to be raised in taxes as we go along.  But pay as you go was a Republican idea, too, no?

Observed:  The insurance industry's attempt to weasel out of one of the few provisions of the new health care reform law that took effect immediately is a harbinger of what's to come.

More Math:  Yesterday we noted that Bank of America intended to foreclose on about 250,000 houses this year.  But 1.2 million of their mortgagees are in default.  Once BofA ramps up to 45,000 foreclosures a month, it will take them nearly 2 years to foreclose those who are in default today. While 45,000 seems like a big number, it is not nearly big enough.

Credulity:  Iraq says it will be pumping 12 million barrels a day by 2015. Even over-optimistic IHS/CERA says 4.3 mbd will be a stretch.  Relentless optimism, along with nods and winks, are required equipment in Middle Eastern oilfields.

Volume:  Distressed house sales – such as short sales and foreclosed (REO) properties – made up 30% of January's house sales.  They are called “short” because they nearly always bring in less than the mortgage price.  And that drives down the price of your house.  Don't worry, we'll make it up on volume.

Porn O'Graph:  Turning the corner or loop-de-loop?