SAR #8152

“We are born brave, trusting and greedy – and most of us
remain greedy.” – Muriel Strode.

Red Queen Rule: The Pentagon has dismissed Peter Brownback, the Guantanamo Bay judge presiding over the case of Omar Khadr, after Brownback ordered the government to hand over documents about Khadr's treatment and interrogation.

ELM: If you haven't gone to The Oil Drum for your briefing on the Export Land Model, do so. Meanwhile, there's a graph from the EIA that's pretty sobering, here.

Too Good To Be True: BOA keeps dancing around actually consummating the engulfment of Countrywide. Perhaps a peek under the veil gave them second thoughts? Or maybe they can't make the dowry? How's the family going to react if the wedding's called off?

Hush! Dallas Fed President Richard Fisher : "The long-term fiscal situation of the federal government will be unimaginably more devastating to our economic prosperity than the subprime debacle."

Safe, Reliable... The widespread blackout in Great Britain occurred when 10 of British Energy's 16 reactors were out of service. Things were not helped when a German energy group insisted the Brits pay twice the going rate for emergency supplies. Enron would have charged more.

Mustache Twirling: Mortgage bankers of yesteryear were often portrayed as 'blood suckers' in the popular media. Turns out that the current boom in housing foreclosures is producing a bumper crop of mosquitoes in stagnant swimming pools.

Takes One... Former Press Secretary Scott McClellan says the Bush Administration would have said anything to start the Iraqi war. The White House says McClellan will say anything to sell books.

Getting Personal: According to the BEA, disposable personal income decreased less than 0.1 percent in April, as did personal consumption. Personal consumption makes up 70% of US GDP. No growth is Not Good. .But that's just the Bureau of Economic Analysis playing with numbers again.

It's For Your Own Good: The Indonesian government hiked the price of fuel by 30% as an anti-poverty step, saying that previous attempts to soften the impact of rising fuel costs were not helping.

Truth Or Consequences: If the lenders thought that "stated income" and all the rest of the unchecked data on mortgage applications would let them go after the borrowers for fraud, their thinking was as bad as their lack of due dilligance. That's what the judge said.

Tweedle Dumb: Exxon and Abu Dhabi are both loaded with oil profits. Abu Dhabi, unlike Exxon, is investing agressively in solar power. Exxon maintains it is in the oil business. Perhaps it's time to get into the energy business.

Once More, With Fleeing: The cost of insuring bonds issued by Merrill Lynch, Lehman Brothers, etc. is way up. Libor and Euribor spreads are back at record levels. The Fed has spent most of its allowance. Credit card and car loans are defaulting at increasing rates. Phase I was such a hit that Wall Street seems to be planning another summer sequel.

Porn O'Graph: Realtors Getting Real.

SAR #8151

Most people forget what the government can do
in extreme times. Bernard Reis

Schizoid: The number of Americans filing first- time claims for unemployment benefits increased last week, a sign the labor market is deteriorating as the economy slows. CNBC, on the other hand, just said the downturn is over.

Welcome Spam : Unlike the stuff in your inbox, Hormell says that customers are flocking to Spam, with sales increasing 10% over last year. Go to their website for delicious recipes.

Wait, Wait: Janet Yellen, president of the San Francisco Fed said Tuesday that the Fed will not permit a return of 1970's style stagflation, but that it was too soon to beging doing so. Why apply an ounce of prevention now when you can wait until it's too late and try a pound?

Not, Not, Not: Oil at $130 a barrel is not caused by speculators. It is not caused by Exxon' profits. It is not caused by Saudi shieks or Hugo Chavez's politics. The US Energy Department says it is simple: The world's oil producers are unable to meet the world's demand for oil. World oil exports fell 2.5% last year even though prices rose nearly 60%. Repeat after me: Supply cannot meet demand. It is called peak oil and it will continue to go higher and higher as bidders compete for less and less oil.

Clarification: Bear Stearns stockholders have voted to let Morgan gobble them up. Bear Stearns will now be cannibalized. If only the financial press would stop calling it a "rescue".

Paracelsus : The dollar used to be backed by gold. Then it wasn't. The Fed's assets used to be Treasuries. Now the Fed has traded over half of its assets for securitized debt backed by mortgages that are going belly up at record rates. Rather like the transmutation of gold into lead.

Comb-Over: Unhappy buyers of repackaged subprime mortgages, home-equity loans and such are trying to force banks and mortgage companies to repurchase troubled loans. Many loan sales had provisions that require lenders to take back loans that default unusually fast or contained mistakes or fraud. Of course, in this case the fraud was not a mistake.

Infrastructure: Hundreds of thousands of people in England await an explanation for a massive electrical blackout caused when seven power stations were shut down. Some view it as a sign of the vulnerability of Britain's aging power infrastructure. More see it as a predecessor of higher rates.

Humpty Dumpty: Mexico, once the third largest supplier of oil to the US, will become a net oil importer by 2016. Over the next 8 years the US will have to out-bid the world for the 2mbd it has been getting from Mexico.

Beaten Path: The number of severely delinquent Alt-A borrowers continues to grow. Those in the 2007 cohort have reached a 16% default rate. The 2006's are over 19% delinquent more than 60 days. And neither the 2006's nor the 2007's have yet reached their reset dates. Remember the when all this was 'contained'?

Porn O'Graph: Alt-A mortgage reset schedule.

SAR #8150

You are not supposed to value assets
based on what they might be worth
on Aunt Dibbie's 74th birthday.

Merry Go Round: Dow Chemical, the largest U.S. chemical maker, is raising prices 20% on June 1st, to recoup their 42% increase in costs for energy and raw materials. The company called the increase "unparalleled", but it won't be very long.

Retired: Indonesia will withdraw from the Organization of Petroleum Exporting Countries because it is no longer a petroleum exporting country.

Vacation Plans: UBS has told its employees who 'helped' rich US clients not to travel to the US. It has also made lawyers available to more than 50 of the UBS staff who may be persons of interest to US DOJ and SEC investigators. They've also asked these individuals to turn in their whistles.

Don't Say "Peaked": Russia's government has proposed urgent measures to halt a slide in oil production. As the world's top oil consumer, the US wishes them well. Or wells.

Magic Elixir: A WSJ article - by an economist and a businessman - explains that what the US needs to do to improve its abysmal healthcare system is to cut costs by "the importation of doctors." This would be cheaper than crating up the patients and shipping them overseas.

The River is Wide: Former Fed NY economist Richard Alford complains that US economic policy is based on the idea that the US exists independent of the rest of the world. The rest of the world wishes this were true.

Way-Back Machine: Sit comfortably, close your eyes, and meditate on the following: House prices have fallen 14% in the last year and is approaching a 27% fall in 2008. Inventory is at a record high, sales of new houses are down 42%. Prices are still 60% above 2000.

Obvious Solution: With Bush intent on making it difficult for laborers to get to their jobs, American farms are moving the jobs to the workers. It's no longer just industry that is fleeing the country.

Haves, Have Mores: According to the IRS, in 2006, 2,833 filers with incomes over $200,000 paid no tax. A year later that number had more than doubled to 7,389 returns paying no tax on incomes over $200,000. And they feel good about this; smug, even.

Summer Reading: "The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too" Jaimie Gailbraith. The title sold me.

Green Card: In the fight to lower carbon emissions, British MPs advocate issuing every adult a carbon-unit ration card to be presented whenever paying for petrol, airline tickets, electricity and gas. The Government says it supports the scheme in principle, but warns it is ‘ahead of its time’, preferring to wait until it is too late.

Porn O'Graph: Housing's spring, the smelly season.

SAR #8149

We face the most serious recession of our lifetime.
George Soros

Words Fail: A Save the Children report documents widespread sexual abuse of children by UN peacekeepers and official and NGO aid workers.

Insecurity: If house prices decline just 20% (and that's becoming the minimum guess) about 16 million mortgages will be underwater. That means 30% of all mortgaged houses in the US will have zero or negative equity. Some retirement plan.

Run Away, Run Away! Currency speculators are speculating that the decoupling of oil prices from the US dollar will cause the currencies of the Gulf States to soar and that of the United States to swoop.

Tube Socks: The US Army was ready to defend the Fulda Gap, not fight in downtown Baghdad. Even has the wrong bullets, still. Seems bullets are specialists and the Army is using 100 yard bullets in 30 foot situations. The Pentagon's solution is for the troops to aim better, not to change the whole supply routine just because the entire battlefield has changed.

Come As You Are: The world is dependent on cheap, abundant oil. Every critical system from transportation and agriculture, to housing patterns and defense rely completely on the continued availability of a substance that is not going to be nearly so available nor affordable. Ready or not.

Rats/Ship: Former Bush White House flack Scott McClellan now admits that he consistently lied from the Press Room podium. That's not the news, we already knew that. The news is he now wants to defend his acts by blaming Bush, Cheney, Rove and Libby for "misguiding" him.

Runnymede: An American citizen named Al-Marri has been held in a military brig for over six years. No trial. The President's lawyers continue to argue that in order to keep the citizens safe, the president must be able to incarcerate some of them indefinitely. Watch "A Man For All Seasons", then meditate on the basis for all constitutional freedoms, habeas corpus.

The Factor Factor: AIG figured its CDS-related losses would be about $900 million. Turned out to be $9.1 billion. What's a decimal place between friends?

No Waiting This Time: Everyone got all excited with the March decline in miles driven. Wait a couple of months and see what $4 gasoline will do. The last time 'miles driven' declined was 1979 and before that 1973. Gas lines then, credit lines now.

Vintage Year: The 2007 Subprime, Alt-A and Prime Jumbo mortgages are the worst ever. Delinquency rates are running as much as 400% of the 2006 crop at the same age. Stock up now, before they get more expensive to have!

Porn O'Graph: Monthly Mortgage Rate Resets: Oh, my.

SAR #8148

It turns out the road to hell is paved -
with shoddy lending.

Obituary: Merrill Lynch reports that the US has given the Arab Gulf states 'permission' to stop pegging the price of crude in US dollars. The US is "more confident about the outlook for the dollar." Confident of its growing weakness?

Interest-ing: Don't think of it as filling up the car. Think of it as paying interest on the money we borrowed from China to give to Saudi Arabia.

And Then... The sub-prime tsunami is cresting, and about time. It has (nearly?) destroyed the financial industry. Next: the option ARM, where you could not to pay the principal, or interest, or only parts, and the friendly banker just tacked the shortfall on to the end of the mortgage. Until the option stoped and full, higher rate payments set in. The foreclosures - more than sub-prime - don't start till next year and won't peak until 2011.

Pay At The Pump: Major oil companies, stung by Swissair's bankruptcy, are requiring that leading US and European airlines pay for fuel before taking delivery.

Trade balance: Europe is very dependent on Russia for natural gas. But it is unlikely that Russia will decide, one cold January morning, to use this as a political weapon; Russia imports 40% of its pork and 35% of its beef from the European Union.

Car Culture: Santa Barbara now has 12 parking lots for use as a safe place for the car-dwelling homeless to park overnight. Some are reserved for women with children.

In Direction: Former President Jimmy Carter is quoted as wishing George W. a peaceful "productive life - in our country."

Consultancy: Environmental scientists are seeing a new field open to them: not commenting. Condor wildlife expert Noel Snyder turned down an offer to "review" a plan for 3,500 luxury homes, condos, and resorts on acreage central to the condor's range. The money was conditioned on Snyder not publicly commenting on the plan. "It was very clear to me I could’ve asked for $10,000. I could’ve asked for $50,000," Snyder said.

Allie$: Poland wants a bribe consideration similar to those given other allies who have agreed to host parts of the US missile defense network. Market forces at work.

Just The Facts: "Our economy and way of life – especially in sprawling, car-crazy North Texas – depends on a steady and affordable supply of oil. It can't last, because oil is not an infinite resource." From a Dallas newspaper!

Astounding: Surprisingly, the US military says that militant attacks in Iraq are at their lowest level in four years. The horror is we've got four years in Iraq to look back on. Five, actually.

Round Robin: UBS, one of the biggest banks in the world, is essentially interchangeable with the other big banks. It has lost 40% of its market value so far this year, still has more toxic assets on the books than its total market value, and is seeking $15 billion in new capital. Does this inspire a great deal of confidence in the system's soundness?

Porn O'Graph: Good times, market version.

SAR #8147

Securitization worked wonderfully until it didn't.

Bye By Birdie: Mexico's oil output fell 9% in the first four months of the year. Their exports (nearly all to the US) fell 13%. A refresher on the Export Land Model, is here.

Round Trip: Several recent reports warn that there is a growing tide of bank failures. An examination of their history of ignoring prudent banking practices suggests the failures occurred some time ago.

Answer Sheet: The media has been asking for months now how high gasoline would have to go before it affected the American consumer. According to the Transportation Department, $3.50 - $3.75 a gallon.

Easy Street: Wall Street claims you should invest in equities to build your retirement funds. Over the last 8 years, your nest egg would have grown .45% a year invested in the S&P 500. In the Russell 2000 you'd have averaged 3% a year. In NASDAQ stocks you would have lost over 8% a year.

Spiral: The former Soviet Union's collapse into chaos and subsequent reorganization is suggestive of the future that awaits the US. But add a far greater level of civil violence, for the Russians had not been drunk on consumerism, affluence, and entitlement. Nor were they trained to maintain their privileges with a gun.

Air Conditioning: Regulators estimate that the $62 trillion CDS market is exposed to probable defaults on over 2% of the notional amount. This will produce $150 billion in defaults, leading to a chain of unmet counterparty demands which will freeze the financial system. At least it'll be summer.

Beached: Getting away from it all by lying on a tropical beach isn't really getting away from it all: upwards of 30% of the 'sand' actually is microscopic shards of plastic. According to a report in Science, this "represents only a small proportion of the microscopic plastic in the environment."

An American Prospect: Dmitry Orlov's new book is not all doom and gloom, just the immediate future. He foresees a distant future in which the US is "flourishing after the collapse."

Math, Again: For every $1 banks write off or have to bring back on their books, $10 in potential loans disappears. Meredith Whitney suggest the losses (so far) will remove $3 trillion from capital markets by the end of the year. That's $10,000 per person in the US. That's a lot of shoes.

Cracked Up: A network of cracks more than 10 miles long has been found on Ward Hunt, the largest of the ice shelves in Canada's far north. The cracks are precursors to the disintegration the ice shelf, another dramatic illustration of the hoax perpetrated by those who deny global warming.

Porn O'Graph: Delinquencies and Foreclosures, same slope.

SAR #8146

Bombing Iran is not a viable energy program.

Connections: If Americans traveled 4.3% less this March than last, why does the price of oil keep going up? Because crude oil has 20 gallons of gasoline but only 10 of diesel, and the rest of the world wants the diesel. They sell the US their excess gasoline at a discount - probably not much above cost. That is why inventories are high, lines short, and diesel more expensive than gasoline.

Watching Your Step: Police insist that law-abiding citizens have nothing to fear.

Blackmail: The US State Department says that countries which sign the treaty banning cluster bombs will no longer be eligible to receive US humanitarian assistance. The US did not bother attending a conference of over 100 nations seeking to outlaw the munition, notorious for killing children for years after they've been randomly scattered about.

Dark Ages? Soaring oil prices are bringing out the doomsters in force. Do not panic. This is not the end of the world. It is simply the end of the world as we know it.

Click Your Heels? We may not be classic 'immovable objects', but despite the clear need for immediate, fundamental changes needed to preserve a habitable world and to maintain our urban civilization, we continue to seek salvation in little things. We seek the minor tweak that will save us.

Investergatons: Greed, fraud, financial bubbles, market tops and criminal investigations follow closely one after the other. We're in the investigation phase; just ask JPMorgan, Moodys, S&P and Fitch. Someone should point out to the investigators that history suggests little comes from the effort, but that repayment is certain; ask Elliot.

Nothing to Sneeze At: Kimberly-Clark announcing it will hike consumer prices by 6% to 8% percent in the third quarter of this year. Repeat after me: "Sub-prime is contained, inflation is under control."

Bad Moon Rising: S&P reports that Alt-A mortgages issued 2005-7 are defaulting at a 17% rate, matching subprime back when this was all contained to subprime. And the subprimes have now reached a 37% default rate. The Fed chimed in with a report that prime mortgage defaults are also on the rise.

Nice Tan: Google, Chevron, and Goldman Sachs have joined in investing in a solar energy array in the Mojave desert that uses 550,000 mirrors to make steam to turn turbines to generate electricity. They're looking ahead to 2020 when their cost will fall below that of coal-fired plants - assuming coal-fired plants aren't all bulldozed under before then..

Silly Is As Silly Says: The National Association of Realtors says "more areas are showing gains, and a reversal in mortgage policy means the market is better positioned for a turnaround." Actually, sales have dropped 18% and prices are down 8% from last year. Real estate is all about location, and if you are located in a real estate office...

Trust Me, Once More: The International Energy Agency says this time they've got it right. For a couple of years now as demand rose faster than supply, the IEA kept assuring that the supply was and would be adequate. Now it admits it might have been hasty and need to survey production and reserve data from oil producing countries in order to make a forecast. Why now, not then?

Porn O'Graph: The cupboard is not bare: houses.

SAR #8145

The US wastes 55 percent of the energy it consumes.

Retraction Pending: Energy Secretary Bodman: "The high-priced energy environment is being driven by the fact that demand has outstripped supply ... and there is no silver bullet that will immediately solve our energy challenges or drastically reduce costs at the gas pump."

Calling A Spade: The Senate Banking Committee thinks anyone in the real estate/mortgage business should be fingerprinted as though they were common criminals. Let me point out that we generally wait until after they've robbed the Grab and Run to fingerprint criminals. And no, it is not an ivasion of privacy; Herr Chertoff has decided that fingerprints are not "personal data".

Poorcast: NOAA predicts an "above normal hurricane season." Or possibly average. Hurricane predictions have a track record similar to economists and Wall Street analysts.

Queuing Up: When Goldman Sachs turns out to have been right and a barrel of crude reaches $200, the cost of the crude in a gallon of gasoline will be $4.76. Add in the costs of refining, distribution, state and federal taxes, and a little profit for the Grab & Run, and the numbers on the pump will approach $6.99. Later this year, if Goldman's right.

Acid Oceans: Greenhouse gases are turning the oceans acidic enough to dissolve the shells of sea creatures decades earlier than predicted.

A Good Idea, or Two: Taxing the very rich, especially investment bankers and hedge fund managers, is an appealing idea. . While they are both "scandalous' and "a social scourge ", there seems to be growing suspicion they are also criminal - if only in the sense that most CEOs these days are stealing from the shareholders.

Bronx Up, Battery Down: The CPI is up, while the PPI is UP. And the difference (CPI-PPI=profits) is getting smaller. This suggest appears to be "a precursor of a structural negative shift in corporate profitability, i.e. lower profit margins." I just love economist-speak.

Surge: The Pentagon has misplaced or mis-paid so much money in Iraq that they don't even know if it is $8 billion or $10 billion that's missing. They don't seem able to explain the following payments: $68.2 million to the United Kingdom, $45.3 million to Poland and $21.3 million to South Korea.

Pitchfork Parade: The United States is not going to peacefully split into two strata - with 5% living in gated communities, driving around in SUVs, throwing lavish parties, while the rest of the population are unemployed, living in abandoned cars and houses without running water. Not, that is, as long as the pretense of representative government exists.

Not Saved: According to the Energy Department, drilling in ANWAR would, after four or five years of development, lower the world price of crude by about 75 cents.

401 not OK: The Controller of the Currency says that if you are planning on using your home equity as a retirement fund, don't. And if you happen to own a bank, the accelerating losses on home equity loans means banks must build reserves to withstand the increasing losses. Returning to some sort of standard requirement before loaning money strikes him favorably, too.

Porn O'Graph: Dueling house price indexes, here .

SAR #8144

They haven't changed the rules, they've changed the game.

Encore: The House of (hopefully not) Representatives overwhelmingly voted to sue OPEC for not pandering to the US addiction to oil. Only in Washington does April 1st come 'round so often.

Terminology: Perhaps better than using a cruise missile, but a helicopter firing rockets into a family of Iraqi goat-herds, killing 8, including children, shooting at the survivors, and sending others, again including children, to the hospital, is not the type of surgery that "surgical strike" is supposed imply.

The Electorate: Too young to retire, too old to get a new job, addicted to consumerism; mourning in America.

Suprize, Suprise: EPA associate deputy administrator Jason Burnett now reveals that the EPA denied California's request for stronger carbon emissions rules at the express insistence of the White House, and that he had been instructed not to reveal that George Bush and other White House officials played a direct role in castrating California.

Musical Chairs: The International Energy Agency projects a daily 12.5 million barrel shortfall in oil production by 2015, with output rising to only 110 mbd while demand soars to 122.5 mbd. More realistic industry experts say even 100 mbd at any time in the future is an optomistic hope. This is only 6 years from now: Who is going to be left standing?

Nixonian Moment: Global issuance of collateralized debt obligations - sliced and diced mortgages, credit card receivables, etc - dropped 94%, from nearly $200 billion in 1Q2007 to $12 billion this year. The wall Street slicers, dicers and wrappers of these products will be seeking employment, and we won't have CDOs to kick around any more.

Spoil Sport: Quick, we need to drill in ANWAR, and off the coasts - all of 'em, and in the National Parks! Unfortunately, any undiscovered oil won't reach the market for at least 10 years after it is found. Oil companies already have leases on 33 million off-shore acres where no drilling has begun. Maybe they don't think there's enough oil down there to make it worthwhile...

Business 101: Ford again gets a failing grade on that grad school basic - The Business Plan. It once more fails to grasp the basic concept of business - you should make enough profit that the CEO doesn't have to issue bonds to get paid his bonus. Dividends, sure - that's the Citibank model. But a car company really should try to sell cars people want.

Ubiquitous Piece: Ever see a piece that perfectly fit in two different jigsaw puzzles? Me neither, but the Fed has; low interest rates got us into the housing/credit problem & low interest rates are going to get us out of the housing/credit problem. Problem is, the damned piece doesn't fit either puzzle.

Peak Air? The increasing scarcity of petroleum is driving the commercial airlines out of business. That will leave Boeing's future solely to bombers and surveillance aircraft. No problem; it'll be a growing business.

Porn O'Graph: Gone, like a bad idea, Collateralized Debt Obligations.

SAR #8143

I want to go back to capitalism.

Non-Recession Receeding: Federal Reserve officials have reduced economic growth predictions for 2008 from 2% to 0.3% . This is lower than inflation, thus the projection is for negative growth in real terms a strong suggestion of stagflation. Don't tell Wall Street; it would scare them.

Up, Up, Away: With petroleum costs at $130 a barrel, no airline has a viable business model. American Airlines, admitting that "The airline industry as it is constituted today was not built to withstand oil prices at $125 a barrel", plans to cut domestic capacity by 12% this year. The airline will charge passengers $15 a bag starting in mid-June. Increases in fares and fees will continue until they have no more passengers and air travel becomes a privilege of the wealthy and the government. Those who work for airlines, those who depend on air freight for delivery of their products, and those who depend on hordes of airborne tourists are on notice.

Bad Timing: Federal Reserve vice-chair Kohn now proclaims that the US economy "is in uncharted waters". Damn, they just repossessed my boat.

Just in from Denmark: Angelo Mozilo described a Countrywide customer's efforts to avoid foreclosure were "unbelievable" and "disgusting". As Countrywide's CEO, Mozilo had an unbelievable salary of $48 million and cashed in $140 million in disgusting stock options.

New Math: In late 2004, oil industry sycophantic Daniel Yergen predicted oil would fall to $38 a barrel by November 2005. Since then there have been additons: Four Yergens equals one Pickens. Two Pickens equals one Simmons. Two Simmons equals a Kunstler. Fill 'er up.

How Safe Are The Twins : Fannie and Freddie would be bankrupt except for their use of friendly accounting rules. Don't complain; if they fail, you - in the form of implicit US Treasury backing - are on the hook for hundreds of billions. Or more.

Economic Failure: Respected economists (an oxymoron) insist that higher prices elicit greater supplies. They have been preaching this gospel to the oil markets for several years. Just today, while the faithful were proclaiming that the end (of high prices) was near, the Energy Department reported that supplies had dropped 5.3 million barrels and prices broke $130.

Blame VISTA : Moody's claims a computer programing error inadvertently led to giving AAA ratings to several billion dollars of CPODs - at least 4 notches higher than they deserved. This went on for quite a while and they've been ... reluctant? .. to disclose the error for over a year.

Quoted : "... for the 40% of UK households with negative weekly cashflows, things can get far worse." How, shorter rations?

Tautology: Home Depot Inc. reported a 66% drop in fiscal first-quarter net income, indicating no improvement in the improvement business.

Revisions: Once upon a time the US stood for “truth, justice, and the American way.” No more. There's little truth in Washington these days, and the country is more into punishment than justice, but that's the American way. The government is building family internment camps in the US and expanding the capacity of a prison in Iraq from 20,000 to 30,000.

Take Two Quinine: The business elite who enforced the shock doctrine on so much of the world are now intending to force this bitter medicine on the US.

Porn O'Graph: How far down will down be in house prices? 80%?

SAR #8142

Capitalism is an efficient way of deciding
who lives and who dies.

Explanation: How high will oil go? What's the market price for surgery when your child cannot breathe?

Trust Me Us: Google wants you to post all your medical information on its website so it can sell it to insurance companies help you manage your healthcare more effectively. The will hold your data in strictest confidence and will not share your records "except in certain limited circumstances" such as for a profit or to help out Homeland Security.

False Dawn: Iraq suddenly realized it has 350 billion barrels of oil reserves - more than Saudi Arabia! Add that to the recent discoveries in Brazil of 300 billion, Indonesia, 300 billion, nearly 200 billion barrels in the Gulf of Mexico and a magical 400 billion barrels in the US without drilling ANWAR and the price of crude becomes $3.75 a barrel next week.

Bush Polls: Bush may not be popular; but he is not a failure. He has succeeded at turning the USA into a fearful quasi-fascist state with an immense security apparatus, lowered taxes on the rich, started two wars and doubled the defense budget, overseen the abolishment of fair elections, delivered the US Treasury to Wall Street and married off a kid. Not bad for eight years of bike riding.

Friendship: The Pentagon is selling F-16's to Romania in order to help it defend itself from the jets we've sold its neighbors. It's also a way of slipping $4.5 billion into Lockheed's pocket.

For The Very First Time: Ice core analysis going back 800,000 years again confirm the link between greenhouse gas levels and temperature. Carbon dioxide concentrations varied from 200 to 300 ppm between ice ages and warm interludes. Today's level is over 380 ppm. Methane, an even more powerful greenhouse gas, over that time period ranged from 400 - 700 ppb. It now stands at 1,800 ppb.

Crystal Bawl. The ratio of house prices to rents is at historic levels, indicating that further price declines are likely. The Case-Shiller composite index suggests a further 15 to 20 % decline in the second half of this year. Construction spending and house prices seem likely to continue to decline well into 2009. Don't cry.

Mexican Standoff: Mexico's petroleum output is falling sharply and will virtually cease within 6 years. Mexico was once the number two supplier to the US. Of oil. Still number one in immigrants.

Finally: At $4.00 a gallon, a minimum wage earner driving the average 15,000 miles a year will spend 25% of his/her after-tax income on gasoline. The US is shipping $2 billion a day - three quarters of a trillion dollars a year - overseas in exchange for oil. Neither is sustainable.

Blind Dates: Harsh climate conditions apparently killed off all but a few tiny groups of humans who then lived in isolated groups for 100,000 years - half of our existence. Mitochondrial evidence shows the groups reunited about 60,000 years ago, giving rise to modern humans.

Porn O'Graph: Oil prices, 1861 - 2008. Interesting

SAR #8141

Expansion is no longer a good idea, if it ever was.
Wendell Barry

Pot/Kettle: George Bush yesterday told leaders of the oil-rich states of the Middle East that they must face up to a future without their precious hydrocarbons. Alone, apparently.

On Tap: Faced with too many people and not enough water and the odds that neither problem is going to diminish, Los Angeles will build treatment facilities to recycle sewage into drinking water.

Windfall: The pandering class wants to tax Exxon's windfall profits. After all, out of nearly $4.00 a gallon, the government gets about 50 cents, while the oil company gets about 22 cents - about 1.4 cents a cup for a liquid they had to drill a mile into the ocean floor for, pump ashore, refine, pump through a thousand miles of pipe then truck to the corner station. Think of that over with your morning latté, $2.95, and 14 cents of pure profit.

Summer Break: There are 31 million kids who qualify for free breakfast and lunch at school, plus getting something to tide them over the weekend in the Backpack programs many schools run. During the school year.

Senseless Census: Nearly 30% of all wildlife species have become extinct in the last 40 years. Land-based species have fallen 25%, marine species by 28% and 29% of freshwater species have become extinct. Not counting the polar bears.

Good News/Bad News: The administration wants to close the torture center detainment facility at Guantanamo, while the military is building a 40-acre detention complex in Afghanistan. Maybe they'll name it in honor of John McCain.

You Bet Your Life: Americans have dropped from 11th place in life expectancy to 42nd. Over 30 of the countries with longer life expectancies have those awful, second-rate socialized single- payer healthcare systems.

Concentrate: ICE - gotta love the acronym - wants to build three more "detainment facilities" for families, as the two existing ones are both full and godawful places to put kids. These are separate facilities from the camps Haliburton already built. One new 'family' facility would be on each coast and one on the Southwestern border. Canadians seem to know better.

Killing Fields: Legal use of medically prescribed marijuana is punishable by death - if you need a transplant.

Think It's Going To Rain? Surveys show increasing unhappiness about the increasing disparity in income throughout the world. Overwhelming majorities - 76% in Spain, 80% in the US, 87% in Germany, 80% in China - favor increasing taxes on the rich and expect the inequality to grow more obscene. And it will, as long as the politicians stay bought.

Hot Air: Before you get too excited about global warming not causing an increase in the number and strength of hurricanes you might want to remember "Garbage In/Garbage Out" in computer models, then go to Real Climate and read the science behind the hoo-ha.

Coming to Terms : Today's newbie is PIK, which stands for Payment In Kind, which is what Claire's Stores is doing: Instead of paying the interest due on $350 million in bonds, it is going to give bondholders IOUs for the missing interest. They are called "toggle bonds."

Porn O'Graph: Housing starts are stopping, here.

SAR #8140

Financial numbers seem to come out of
rabbit-filled hats.

Peace In Our Time: On Sunday, Deutsche Bank Chief Executive Josef Ackermann said "I believe we are getting closer to the end of the financial crisis."

von Clausewitz: Oil will soon be the central theme of politics. We have reached the point where there simply isn't enough to go around and the only way to stay in power is to promise to get 'more'. Instead of promoting ways to adapt to having less oil, politicians will run on some variant of " Arabs have lots of oil and they are bad people."

Co-Conspirator: In areas where house prices are plummeting, Fannie Mae will no longer require down payments. Wouldn't want the new suckers to have negative equity before they get the locks changed. This is a Good Idea because Fannie Mae has changed its computer model to predict fewer defaults. No, no; they really said that.

Rhetorical Question: Johann Hari, in The Independent, asks "Are There Just Too Many People in the World?"

Only The Guilty: The folks at Internal Security want to use the far-reaching abilities of military satellites and 'other monitoring technology' to gather data on Americans and to then share that data with the local cops. Chertoff assures that the information will only be used to ensnare lawbreakers and conspirators.

California Humor: A proposal to ration water to customers, including two oil refineries, in San Francisco's East Bay, as a 'temporary measure' to remain in force only until the problem, which was caused by the lack of rain for the two previous winters, is cured by next winter's rains. The system's name: "East Bay MUD".

The Big Un-Easy : Nearly half the oil industry's experienced staff is nearing retirement. With them go irreplaceable knowledge, experience and skills. Replacement petroleum engineers, petro-geologists and roughnecks have not been identified, much less trained. Maybe Army recruiters could moonlight.

Psychic Bailouts : Now they want the taxpayer to bail out the Alt-A, subprime, pay-option householder because the loss of a house causes psychic trauma. Why not just issue them the same pamphlet on How To Live In A Cardboard Box we give veterans ?

Table of Contents: The ABX - Asset Backed Index, is the benchmark reflecting the value of mortgage-backed derivatives. It tracked ABS in series, by date of issue. The 08-1 ABX was scheduled for January 2008, but not enough sub-prime mortgages have been issued base a guess as to value on. The volume has dropped from billions a measly few hundred million - not enough to bother with.

Docked: A German studying graduate oceanography at MIT on a National Science Foundation grant has been told by Our Protectors that he can't work around ships and docks in the US because he poses a security threat. Five thousand such letters have gone out from Homeland Security. Sure don't want no over-educated German scientists working 'round here.

Costume Party: Turns out that General Petraeus' big cache of Iranian weapons weren't Iranian after all. Good thing, too. If Bush&Co. had even a scimitar with Farsi on it the war would be underway already.

Porn O'Graph: Banks borrow reserves.... big deal?