SAR #8243

It is astounding how many Americans

do not own mirrors.

Can You Hear Me Now? Cheney-Bush have been working to establish US dominance in the Caucasus. The Russians do not want US troops or US puppets there. They put Georgia back in its place. Polland agreed to let the US plop down part of Star Wars next door. Russia responded by (1) terminating the import from the US of nearly a million tons of pork and poultry. Big bucks. And (2) successfully demonstrating an ICBM designed to defeat Star Wars. Big Stick.

Over/Under: We're now accepting bets on the minimum extent of the Arctic ice cap in September. The previous record was 1.64 million square miles, reached in September 2007. At a slim 2.03 million square miles, 2008 is already smaller than the old second-smallest, September 2005's 2.05 million square miles.

Prophetablility: Germany has reduced its energy dependence through investment in insulation and solar/thermal projects. The US is boosting its energy consumption through investment in cruise missiles. Wonder which has the better ROI?

So Soon, So Soon: Remember 'Covered Bonds'? They were the new and improved, default-proof way to slice and dice mortgages. One of the first batches of covered bonds was by Washington Mutual and has just been downgraded to AA status. Still a sure thing, just not quite so sure.

Protein : Rat, the other white meat, has quadrupled in price in Cambodia this year. Other meats are far beyond the pocketbook of the average Cambodian. The CPI there is increasing at 37% a year. It was unclear if this was with or without the cost of energy and foods....

Job Secured-ity: Haliburton step-child KBR made money in Iraq by recruiting laborers in Nepal to work as kitchen staff in a luxury hotel in Amman, Jordan. Along the way, their passports were confiscated and they were taken to Iraq.

Define "Is": There are no uninsured people in the US - everyone has access to emergency rooms in public hospitals. Or says former McCain advisor John Goodman, who stopped being a McCain advisor right after he said that.

Fairness Doctrine: Professional arsonists have gone to court to overturn a law against setting fires. In other news, "industry groups" which contribute to the global warming that is driving the polar bear to extinction argue they should be allowed to keep emitting CO2 until everyone stops on the same day.

Gently Used: About that natural gas Shell found in the South Rub Al Khali region of Saudi Arabia: (1) They are still drilling. (2) They have not discovered a new hydrocarbon source. (3) They have drilled into and confirmed a discovery made by Aramco 30 years ago.

Roadkill: Vulture Venture capitalists like Carlyle, KKR, MorganStanley and Credit Suisse are rushing in to scoop up and privatize all sorts of infrastructure maintenance projects from local governments. Soon you'll have to pay extra to cross bridges and avoid potholes. And it'll be illegal to pick up that dead skunk - the roadkill will belong to them.

SAR #8242

The term 'freedom fighter' seems to have fallen out of favor.

Strong: The strongest thing about the GDP numbers released yesterday was their smell. Most of the magical gain came from the ridiculous 1.2% figure used for inflation. Okay, everyone's had a good laugh; now could we have the real number?

Quickly, Quickly: To a 5-year old with a hammer, everything looks like a nail. Especially in Denver.

Clarification: For those who have been at an undisclosed location, Moscow's representative to NATO has explained that Russia will view the use of the Western military assistance now being shipped into Georgia in another adventure into South Ossetia or Abkhazia will be viewed "as a declaration of war." In other words, keep your dog on a chain, Dick.

Good Question : If Iraq is a sovereign country, why does it have to negotiate an exit date for US occupation troops. Oh, 'occupation'.

Read the Instructions: Big Oil has scored a major contract to develop a major Iraqi oilfield on a production-sharing basis. The Chinese National Oil Company is paying $3 billion to revive an agreement reached in 1999 with Saddam Hussein's government. The US is spending upwards of $100 billion a year to make this experiment in capitalist democracy possible.

Accumulating Evidence: How many more children will the US kill in Afghanistan and Pakistan before sufficient data is accumulated to suggest that something's wrong with the general idea of assassinating terrorists with cruise missiles?

Before Dawn: "While U.S. home value indexes continued to decline, an encouraging sign has been the significant moderation in the rate of decline," said Freddie's VP Frank Nothaft. Translation: We're still in the handbasket and we're still going to hell, but slower.

Alchemy: Pakistani authorities have discovered a sure-fire way to get rich in the stock market - pass a law that says stocks may only go up. Hope Bernanke and Paulson are taking notes.

Orphan: Prosecutors are trying to reduce super-sleaze Jack Abramoff's jail time from a total of 17 years to a little under four. They claim this is reasonable given the help he gave the Feds in prosecuting the numerous powerful people he had corrupted. So he gets caught bribing people and gets time off for bribing people and then bragging about it to the Feds?

Fairly Un-Balanced: Fox aired just 2 minutes of Gov. Warner's keynote address to the convention, then cut to an ad, then aired a John McCain ad, and discussed Obama's ties to the Weather Underground when he was eight years old.

Default Protection: Wachovia is asking a US court to allow one of its front organizations declare bankruptcy in Bermuda in order to prevent creditors from seizing any Wachovia US assets to repay debts.

Ignorance is Bliss: With gasoline ever more expensive, why are the suburbs continuing to explode over the landscape? Some say it's because 'people actually like to live there'. More likely the cause is to be found in a tax-averse, self-centered and technologically isolated population that simply does not know better. Like abused children from dysfunctional homes, the suburban generations don't know better.

Honest Economist: "The prices are falling because they're too freakin' high." Chris Thornberg, Beacon Economics, Aug 27, 2008.mn;

Porn O'Graph: Real estate - location, location, lower.

SAR #8241

Fifty percent of the fossil fuel used in the history of man
has been burned since 1985. - Randy Udall

Tweed Ring: Many of the larger investment banks have offered been forced by state regulators to repay retail investors money lost in auction rate securities scams. Now Massachusetts (with NY's Cuomo in the wings) has turned to Fidelity and asked it to do the same. Fidelity was quick to point a finger back to those that underwrote the securities and conducted the auctions - the very folks who've already paid half a billion in fines.

Comfort: Even with all the buzz about the credit crunch, the FDIC's list of problem banks increased only 30% in the latest quarter. Then again, IndyMac ($32 billion in assets - third largest bank failure ever) went bye-bye without ever being a 'problem' child.

Ah, That Freedom: In a clever PR move, Denver police arrested an ABC News producer as he and a camera crew stood on a public sidewalk, taking pictures of various senators leaving a hotel. Police refused to tell ABC lawyers the charges against the producer; seven years into the Bush administration, they don't have to.

Time Bomb: While the US views the coming crash in Mexico's petroleum exports with concern, it might give some thought to what the loss of billions of dollars in income will do to the social structure and stability of its southern neighbor.

Social - ism: Friends, let's agree to bail out the banks again. Might as well, for the FDIC is getting set to tap the Treasury (that's you wallet) for a few billion. Or tens of billions. Probably less than $100 billion. Maybe a tad more. So far the collapse of 9 banks has driven the FDIC to the wall, there are a hundred or more to go. Don't worry; the money will be repaid.

Brass Toads: If you've ever wanted to start a little retail shop, now may be a good time. There'll be 144,000 store closures by December. You might be able to lease a really good spot in a dying mall.

Beeing There: In Germany, Bayer is facing charges that it knowingly polluted the environment with a pesticide which has killed millions of honeybees. In the US, the government continues to maintain that studies that prove the allegations are proprietary and will not be released.

Pudding: After 7 years of GOP tax cuts guaranteed to produce a rising tide of increasing wealth for all, the median income is lower than when Bush started making it better. More kids got left behind in poverty. The rich got richer. But this data was before the economy went to pot; maybe we need to cut taxes on the rich a bit more.

Put It On the List: An undramatic, nearly private, discussion of phosphate production rates and reserves has been going on for some time. Maybe we should read up a bit on it, for if we don't figure out ways to recycle phosphorus on this planet, we'll have to find somewhere else to grow our food.

Clarification: For the second time in as many days I've come across reference to a 'Nobel Economist'. There is no such animal. Never has been. The title is misused to give the impression that economics is a respectable science. It isn't. The highest award in economics sould be an Oscar.

Pants on Fire: The Saudis claim they have 260 billion barrels in reserve, T. Boone Pickens does not believe them.

Three Card Monte: Paying executives large bonuses by quietly issuing them options has long been general practice. Now that stock options are underwater at 40% of Fortune 500 companies - 10% of these options are more than 50% underwater - watch and see what compensation committees do with smoke and mirrors to keep funneling unearned income to CEOs.

Baby It's Coal Outside: Russia has instructed its coal exporters that coal must be supplied domestically before any can be exported. A shortage of rail cars makes it impossible to meet both the domestic and export delivery demands; internal use comes first.

SAR #8240

SORRY ABUT THE FORMATING - BLOGGER SEEMS ILL TODAY

If a nation's laws are situational, that nation
has no laws. Wm. Gibson, Spook Country


Theme Song: McCain's got the lyric, just needs a tune. "I spent 5 1/2 years in a prison cell..." In the background, Rudy Giuliani will chant "9-11 9-11 9-11..."

Perception: For quite some time Citigroup was sweeping minor overages in customers credit accounts into their own general funds - specifically those accounts belong to "the poor and the recently deceased." Citi says it was safeguarding the funds, California's AG says it was theft.

Now You See It... With Cantarell's output declining 36% in the last year and no new oilfields in sight, Once the sixth largest oil producer in the world and a primary US source of imports, Mexico will "exhaust its current reserves in less than seven years." And cease exporting to You Know Who before that.

Been There.. Ever work for a company that suddenly started issuing paper clips by the each, rationed copier use to a select few, skipped upgrades to equipment? Were any of them able to manage their way to a profit? Any of them still around?

Mass Arrests: Again, this time in Alabama, hundreds of probable terrorists guilty of working for a living have been rounded up by blue-shirted ICE-men. No charges have been brought, but dozens have been "identified, fingerprinted, interviewed, photographed and processed for removal." Their families will be dealt with later.

You Say SIV, I Say Enron: Lehman Brothers is reportedly setting up an off-the-books enterprise to 'buy' its failing mortgage assets, thus getting them off the old balance sheet and make investors forget that it still faces huge losses.

Gaming the Nations: Huber starts a discussion of Georgia vs. The Bear by assuming Georgia was "a rational actor." The first lesson in understanding Foreign Relations is the recognition that actors on the world stage often do silly things internationally so they can retain power at home. Keeping Cheney happy would qualify in this instance. After all, you can't play the game if you're not at the table.

Risk Taking: A bank in the UAE is suing Morgan Stanley for fraud, alleging Morgan Stanly misrepresentd a fund that subsequently collapsed. What gave them the idea that this was illegal?

Simpleton Math: JPMorgan is writing down its holdings of Fannie and Freddie's preferred stock by half. That's a good deal, in that they both have a negative net worth and should be valued at zero. Well, Paulson is bound to pay them something, but certainly not half.

Going For The Gold: House prices fell a record annual 15.9% in June. Not a single regional market has had a positive return over the past year. The contestants will now scoop up the data and see who can toss it into the headlines with the best spin. Larry Kudlow currently holds the world indoor record.

Safety First?: Washington Mutual is offering a 12 month CD paying 5%. Getting 4% from a bank for a one year CD is pretty rare. Wonder what the odds are you'll get your money back?

SAR #8239

The credit crisis is contained; it will not spread
beyond the known universe.

Terrorific: As I watched televised images of combat ready police and paramilitary forces deployed in Denver, I wondered why the Democrats weren't holding their convention in America.

Which number gets the headline? Sales of existing houses increased 3.1% in July, over June, but dropped 13.2% from the previous year. One third of these sales were foreclosed properties. . The house head-count, on the other hand, showed an increase of 3.9%, giving the country an 11.2 month supply - the highest ever. It will take a year to get rid of the houses now on the market, even if not another house is built or comes up for sale.

Absent: Pollyanna: According to participants at the weekend gathering of central bankers, the majority did not believe the financial and credit crises are even close to being over.

Important Arcanae: The spread between LIBOR and predicted average federal funds rate over the coming three months (LIBOR-OIS spread) is used to judge how easy or tight credit is. Over the decade before Aug 08 the spread was .11%. It is thought that .25% would indicate a postive trend back to normal. Right now it is .77% and forward markets suggest it will increase to .85% by January and not drop to the .25% level until mid-2010. Another 18 months to 2 years of tight credit isn't going to do the world's economies much good.

Bustles and Hoola Hoops: The fall of the Roman Empire took longer than the mini-series on TV ran. So too will the transition from the American Empire to whatever comes next. While waiting for Armageddon we will need to keep on living, an undertaking worthy consideration.

Truth In Advertising, Not: Proponents and the press both keep referring to hydrogen fueled cars - and the mythical 'hydrogen economy' - as 'zero-emission technology'. Not true. Just as the US has not reduced its carbon emissions, it has simply shipped its air polluting industries to China, making hydrogen is as energy consumptive and carbon emittive as burning gasoline. Instead of spreading small amounts over the interstates, producing hydrogen would concentrate it in plants, like electrical power plants. Sure, that would make carbon capture and sequestration possible, if carbon capture and sequestration were possible - but that's another fairy tale.

New Contest: For the usual prize, I'm going to begin posting just the headers to Paul Krugman's gems and you, dear reader, get to supply appropriate content. Some recent ones: A Very Good Jeer, Synchronized sinking, Mmmmm arugula.

After You: Banks extend credit only if they trust the borrower to pay the money back. In a recessionary world, the prospects of being paid back dim. Thus, not trusting they'll be paid back, banks cut their loans. With no credit to operate, the economy weakens further. Banks, fearing additional losses, seek more capital. No one trusts that banks have been honest about their losses, so capital is not forthcoming. No capital, no loans. No trust, no loans. No credit, no growth. Take the rest of the day off.

SAR #8238

It's not the loss of money that is so troubling;
it is the loss of democracy.

Define 'Lead': The MSM is full of reports that McCain leads the other guy in the polls. Yet, the WaPo has Obama ahead by 6 points (49 - 43) among registered voters, while 'likely voters' prefer Obama by 4 points (49 - 45). Rasmussen polls are Obama by 3%. Even Fox shows it as Obama by 3 points....

Bitch, Bitch Bitch: My son says I'm a pessimist. I told him to go read Ilargi's latest.

Space Warp: Petroleum tea-leaf specialists report (1) OPEC is increasing the supply of crude oil, while (2) the rates for leasing oil tankers to ship the oil are dropping significantly. The explanation is (3) a disturbance in the continuum or (4) the difference between theory and reality or (5) OPEC producers are using more oil at home.

Planning Ahead: The capitalists have done such a fine job with the US economy that Bernanke wants the Fed to begin centrally managing "the entire system" in a series of five-year-plans. It will not be called 'central planning'; the working title is "macroprudential oversight".

Points: Biden stuttered as a child. Michelle doesn't wear panty hose. Republican Chuck Hagel of Nebraska wasn't picked as the Democratic VP. Besides, McCain says Obama has dissed Hillary by not picking her! Why would anyone vote for Obama, who is not even US born!

For Example : The Latin American Organization of Small and Medium Companies reports that the high price of oil has driven at least 100,000 small Mexican companies out of business. It is called demand destruction; leaves more for the rest of us, drives down prices.

Inquiring Minds: Recession or not, it obvious that things are less than good and are headed further south, so what's the difference between a downturn and a recession? Mainly this: a downturn turns back up fairly soon. Recession is a snake that swallows itself.

Out-Sourcing: Election officials are now hiring the makers of electronic voting machines to count the votes, even where their machines are not used. Some localities, short of tax revenues, are investigating the possibility of simply submitting the names of candidates to these companies and having them generate the entire process, including results, thus freeing up the funds that have previously been squandered on actual elections and voting.

Tumbling Exhibition: When Fannie and Freddie cross the finish line into federal bailout, those who bought credit insurance against their default get to collect. The question isn't will Uncle swoop in - or be dragged in more likely - but will those who issued the insurance actually have enough money (north of $2 trillion on a nominal $62 trillion issuance) to pay off any significant part of the claims?

Giant Meets David: Mexico's Cantarell, one of the largest oilfields ever found, is crashing. Production is down 36% from last year. As a whole, Pemex's output is down 10% and exports are down accordingly. Blame it on the speculators.

SAR #8236

Hybrid SUVs are like ordering a diet soda

with a double cheeseburger.

His Master's Voice: A former adviser to China's central bank,Yu Yongding, said, "If the U.S. government allows Fannie and Freddie to fail and international investors are not compensated adequately, the consequences will be catastrophic. If it is not the end of the world, it is the end of the current international financial system."

Without Comment: U.S.-led coalition forces killed 76 Afghan civilians in western Afghanistan on Friday, most of them women and children

Qualifications: At a high level economics gathering in Wyoming, FED Chair Bernanke observed that the credit crisis is taking a toll on the economy. That's why we pay him the big bucks, the man's got insight.

Phenomena: The National Institute of Standards and Technology has issued the government's official theory on the collapse of building 7 seven hours after the twin towers came down. A brand new, never before encountered phenomenon, 'thermal expansion', was identified as the culprit. Critics suggest that this is actually a much older phenomenon, known as 'cover up'.

Public Square: What if we suddenly decided that people were responsible for themselves? Would that translate into being responsible for others, too?

Globally Local : Like politics and real estate, global warming takes place locally. Things might not have changed much at your house, but Alaska is 5ºF warmer since the 1960s - and 8ºF warmer during the winter. The permafrost melts, releasing methane. The bark beetles munch away all year and have eaten up over 3 million acres of spruce in the last 15 years. How are things at your end of the bathtub?

Because: A Justice Department plans to let the FBI investigate anyone at any time without any particular reason, and to keep the information until a prosecutable charge is discovered. How this differs from current practice was not immediately clear.

I have seen the future ... Another verse of The Export Land Model, this one citing the difference between the drop in Russian oil production ( 0.8% ) and the drop (5.2%) in Russian oil exports. To paraphrase Fulford, the future doesn't work - not if it's oil based.

Good News / Bad News: The good news is that inflation has peaked. The bad news is that deflation will follow.

All I Need... Carbon plus two oxygens both warms the world and uses up the two oxygens. A 21% concentration seemed to suit Goldilocks, but as we have fewer trees, less grass and deader oceans, the plants that made the O2 in the first place are being overwhelmed. As we will be, without "the air that I breathe"

Rucksack Religion: So General Pushup Petraeus endorsed a religious tome a year ago. Interesting. Far more interesting is why, as McCain is searching for a running mate, did this suddenly make the news? Oh.

Psst! Pass It On: TVA is raising rates 20% in September, and Duke Energy is upping the bill by 8% for NC customers with an even larger increase in store for SC customers in October. "Increasing fuel costs.... "

Better Late: Premier Election Solutions, a major voting machine maker, now acknowledges that its voting machines dropped votes. Whether it preferred to drop Democratic or GOP votes was not disclosed. Ohio will use Premier machines in the Nov. 4 election of John McCain.

Innocent Bystanders: Central bankers, having stood by and let the train wreck occur, now admit there is not much they can do to kiss it and make it better. As Galbraith pointed out, there is a long and adequate record of recessions, unemployment, inflation and collapse to suggest that central bankers are "manifestly ineffective."

SAR #8235

Cheer up; how often do you get to watch
the collapse of civilization?

Market Movers: The only possible explanation for the rise in Freddie and Fannie's shares is that everything else looked worse. How is that possible?

Ball, Home: NATO said further ties with Russia depended on Russia abandoning Georgia. Russia responded by "suspending all military ties with NATO." NATO's arrogance seems misplaced: Germany, France, Austria, Poland, Greece and Turkey are dependent on Russia for natural gas. Maybe someone should send NATO a calender.

Ugly Duckling: Even standing in the dim light of a streetlight, Lehman's was unable to sell itself. Can you spell 'desperate'?

Strained Glass: Seems that stained glass, the Medieval kind, were solar-powered air purifiers which removed pollutants from the air. Pretty, too.

Aw, Uncle Dickie! Dick Cheney writes a mean business plan: (1) nominate self for VP (2) have election stolen (3) meet with the other big guys and decide whose oil to grab. (4) get the White House to approve the division of the spoils (5) start a war (6) have the Pentagon to award the spoils to your company (7) pass a law to make war-profiteering tax free both here and there. It's the newest case-study at Harvard Business; Doug Feith and Wolfowitz are team teaching. The text is the Restore Iraqi Oil plan, the White House approved pre-war edition.

Diapers: Even if this happens to be the bottom of the housing market, it's still a bottom.

God Will Know His Own : NYC police do not know who the terrorists are nor how to find them, thus everyone is a suspect. The cops plan on tracking all the people all the time, and have ordered 11 million GPS leg monitors. The law-abiding have nothing to fear. Data will be purged every 30 days, citizens more often.

Duck & Other Foods: The USDA says that once consumers swallow a 6% increase in the cost of food this year, they should be ready for a second 5.5% helping next year.

Occupation to End Indefinitely: The US and Iraq appear to be nearing an agreement that would have US troops withdrawing from the cities in 2009 and relocating to immense permanent bases hidden in the desert from which, for an indefinite period of time, excursions would be launched to support American oil interests and manipulate the puppet government.

Math Quiz: Merrill Lynch, Wachovia, and others need to raise cash. To do so, they will (a) issue bonds paying 10% or more, (b) borrow from the Fed at 2% (c) go out of business. Answer: b, then c.

One if by Land: Homemade Security is now collecting info on all citizens crossing US borders by land, permanently keeping it and using it in criminal investigations. Times change, as do the rights of free peoples.

Economics 101: The free market, where demand elicits supply and the more something costs the more there is of it, only works in an infinite space with infinite amounts of resources. Don't try it with oil, corn, or votes.

Peter Pan & Company: How is it that Fannie, Freddie, GM, Ford, Lehman Brothers, among others, do not get arrested for impersonating real businesses?

Porn O'Graph: I owe, you owe, we owe .

SAR #8234

We have spent our future.

Lottery: Fannie and Freddie will slip quietly beneath the waves __________ (next year) (next month) (next week) (tommorow) (what time is it?)

Globalization Rules! Just as "it's confined to sub-prime" turned out to be untrue, the idea that the global economy is somehow divorced from the US economy is turning out to be implausible. "Developing markets" are not going to save themselves, much less the rest of the world.

Best Of Three : Noticing that the Bush Administration has less than six months to go, the US Court of Appeals for DC has decided, 2 to 1, that the EPA's two year attempt to keep states and cities from monitoring air pollution is illegal. Like retiring generals, too little, too late.

Metric Conversion: Australian climate change expert Will Steffen says that scientific panels have seriously underestimated the speed at which the climate is changing and how quickly arctic ice is melting. He expects a four meter rise in sea levels before 2100. For the metrically challenged, that is about 13 feet. A lot of Florida is only 2 or 3 meters above sea level.

Demand Destruction? U.S. crude oil imports averaged nearly 11.0 million barrels per day last week, up 1.3 million barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged over 10.2 million barrels per day, 93 thousand barrels per day above the same four-week period last year.

Perspective: Automobile accidents claim more than 40,000 lives every year. Yawn.

Missile Excess System: Q: Why is the US putting the Star Wars ballistic missile defense system (that doesn't work) in Poland to defend against ICBMs from Iran and North Korea (neither of which have anything close to an ICBM) which would never come anywhere near the Baltic Sea? A: (1) There are big US corporations that did not get much of the spoils from Iraq and (2) Some fools will still lend the US money to waste on war toys.

Secret Diplomacy Europe depends on Russia to heat their homes. That's rule one in their foreign policy decisions. They may share values with the US; they share pipelines with Russia.

Busy As A: The EPA refuses to release the pre-approval studies on Bayer's new class of pesticides conducted 5 years ago. Since then, honeybee deaths - 'colony collapse disorder' - have become a major threat to pollination in the US. Under Bush's new rules - science doesn't matter - it is hard to understand why the bee-huggers are going through the motions.

Don't Tell The Children: When will the US citizenry awaken to the fact that US foreign policy is made by neoconservatives whose allegiance is to Israel? (a) never (b) citizens? (c) when it makes the nightly news (d) when money talks (e) after.

Exceptional: Insurance is the only branch of the financial industry that has avoided the credit collapse problems stemming from the mortgage mess. Well, except AIG. Like the single-issue monoline insurers, AIG got caught being greedy on some no-risk CDO deals. AIG is the largest insurer in the US. Exception proves the rule.

Fact Is: America is losing its greatness not because of the atrocities we commit against our enemies, but because of the atrocities we commit against ourselves.

Porn O'Graph: Climbing foreclosure mountain .

SAR #8233

Globalization is reversible.

This Old House: Housing starts are at their lowest level since 1991. Credit markets continue to shrink. Compared to July 2007, 30% fewer houses were started in July 2008.

Wake Up! In case you've been asleep, can't read, haven't turned on the TV, I've got some bad news. Maybe you'd better sit down... Yes, it's inflation. The producer price index for July (9.8%) was up the most since 1981 (10%). Remember Arthur Burns?

ACT I: The first stop on the Bush administrations Last Chance Tour is the Endangered Species Act. By executive fiat, there no longer is one. The political appointees at the head of federal agencies will now determine whether the highway, dam or mine their prospective employers want to build would adversely impact any endangered species. This will keep those anti-growth revisionist scientists from assessing the impact the project - strip mining, new coal-fired power plants - would have on global warming and thus on protected species, like humans. As the Tour winds down, be prepared for further outrages announcements.

Technical Difficulties: John McCain, "In the 21st century, nations don't invade other nations." He's right, if you consider that the US invasion of Iraq started back in Daddy's days.

Comments, Please: "The Justice Department has proposed a new domestic spying measure that would make it easier for state and local police to collect intelligence about Americans, share the sensitive data with federal agencies and retain it for at least 10 years. " Anonymous submissions will be accomodated.

Neo-Confrontation: In another fine rant, Jeff Huber explains that Those In The Shadows, grown bored with lobbing cruise missiles from nuclear submarines into Pakistani wedding parties, want US troops to pursue chimeras into Pakistan. Casus belli, anyone?

Roll Your Own: Go read the second column of numbers - the net borrowed reserves data - down from the top. Slowly. They are in millions, so that last figure is -$123.3 billion.

Peak Oil or Just Peak Exports? Russia is the world's largest oil exporter, slightly ahead of the Saudis. But Russia's oil exports from January to June this year are down 5.2% over the previous year, while production declined about 0.8%. The shoemaker's children seem to be getting new shoes.

Eye of the Beholder: The gov is giving $7,500 tax credits (to some people, under some conditions, yada yada). Well, not quite "giving" - it has to be paid back (a) without interest, (b) over 15 years starting 2 years after the loan is granted, or (c) out of the profits when the house is sold. Investment banks get a better deal, regularly. Like when they buy other investment banks with taxpayer monies.

Class Dismissed: New debt = inflation. Mortgage lending = Fannie & Freddie. Wave bye bye to Fannie and Freddie. Credit contraction = deflation. Wave bye-bye.

Mmmmmmm 3: There used to be something called M3, which was a good lead indicator of asset prices. It became embarrassing, so the government no longer keeps tract of how much money is being created. Or destroyed. Other folks have kept up with M3 and report that it has fallen from an annual growth rate of 19% to 2%. The first is inflationary, the second deflationary. There's a chart; it too is depressing.

Porn O' Graph: All boats, rising ?

SAR #8232

What kind of denial shall we try today?

Repo Man: You don't make the car payments, Danny Devito comes and takes the Caddy away. You can't make the mortgage payments, Bank America comes and takes Countrywide away. How many payments can Uncle Sam miss before Rocky shows up to break his leg?

Preview: Asking prices for houses in London fell 5.3% in August, a $40,000 drop in value per home, in a single month.

First Do No Harm: In 1985, famine killed over a million Ethiopians. The developed world responded with massive aid, and an extensive social welfare system was built to prevent recurrence - and it has. But what it has also done is enshrine a system that reduces more and more Ethiopians to dependence on food aid from abroad. If the exporting nations supplies dwindle, as they are doing, what will happen to all those Ethiopians who cannot be fed from local production?

Rhetorical Question: To the headline question: Did Washington Waste Millions On Faulty Voting Machines? I refer you to the 2004 results in Ohio.

Un-rosy Glasses: Breaking with Wall Street's long tradition of smiling optimism, Morgan Stanley's president is predicting that things are not getting better, but progressively worse and will continue on the downward slope until late 2009.

Sticks and Stones and Numbers: Barron's estimates that Fannie and Freddie each have a negative net worth exceeding $50 billion, guaranteeing some $5.3 trillion in mortgages.

Chose One: There is growing doubt over the US Energy Information Agency's data. They were previously caught overstating OPEC oil production. Now it seems they are overstating natural gas production - for example, EIA estimates Texas produced an average of 21 BCF a day for Jan-May 2008, while actual production reports for the same period shows only 17.6 BCF a day, a 15% exaggeration. Cui Bono?

Night of the Living Dead: The Efficient Market Hypothesis, beloved of certain economists and most market appologists, has been among thw walking dead forever. Would somebody get a silver bullet and a stake and get rid of this thing? Bury it right next to that othe favorite of economics texts - the rational investor.

Fine Print: While the spotlight has been on Fannie and Freddie and their possible bailout (ie nationalization) by the Treasury Department, about half of US mortgage originations last month went to FHA, which is backed by Ginnie Mae, which is and always has been 100% backed by you-the-taxpayer. Ginnie used to do about 25% the business that Fannie did. I guess 'promises' of Treasury support don't quite match legislated Treasury support.

Spoor: Your slip is showing. We all know that criminals lead all sorts of "trace evidence" behind. Turns out that very modern Millie does, too. In Britain the government gathers over 3,200 pieces of personal information on the average person in an average week. Telephone calls, credit card swipes, traffic cameras, bank cameras, transportation records, emails, websites... Good thing we've got the right to privacy in the US.

Porn O'Graph: Our Financial Leaderslip.

SAR #8231

The only 'free market' in America
is held in someone's driveway.

Bottoming: Ah, the real estate market is turning around. That's what the pundits say. Ought to tell Lehman Brothers, which is trying to sell its $40 billion in real estate holdings for $35 billion.

The Lost Nail: American shoppers have powered the economy for the last decade or more through borrowing, through debt. Refinancing overpriced houses, home equity loans, six year car loans, credit card debt. All that and more. The American way and standard of life is built on debt. But there's to be damned little debt extended for the near future; the horse is about to lose a shoe.

Score: While you were watching Michael Phelps win 8 golds, Merrill Lynch was busy losing $29 billion in its London office.

Contagion: Four of the worlds five largest economies - US, Europe, Japan and the UK - are in recession. Can China escape if their customers all collapse? The stock market in Zimbabwe continues to reach new highs.

Crime Doesn't Pays: Although charged with "multibillion-dollar consumer and securities fraud" and with overwhelming evidence proving it, Wachovia, JPMorgan, Morgan Stanley, UBS and others have gotten 'do-overs'. They buy back the auction-rate securities, pay minimum (and tax-deductible) fines of about one-half of one percent of the amounts involved, and promise not to get caught again.

Tit for Tat: If you have free will, so do the smallest particles of matter - or so some mathematicians at Princeton have chosen to prove. Makes the uncertainty principle a bit more principled.

Pudding's Proof: Some see the fall in the demand for oil and the consequent fall in the price per barrel as proof that there is no problem with our oil supply. But what if the fall in demand is 'demand destruction' due to the high price of oil due to demand exceeding supply (peak oil)? That would suggest that even a moderate up-tick in demand will once again speed the price upwards. And we are all familiar with the attention span of the average American when it comes to economizing.

Uncomfortable Truth: Mervyn King, Governor of the Bank of England, said yesterday that government authorities could do little to prevent a housing crash.

How Big Is 'Some': Big Oil's friends say one thing, the Greens something else. Congress wants to help, which is always dangerous. Does drilling here (off-shore) or there (ANWR) make sense? After a long and thorough review which finds some support for nearly all the views, the conclusion is: Yes, drilling OCS and ANWR would produce more oil. And no, the amount produced wouldn't amount to a hill of beans.;

Half-full Faith and Credit: Having the US bail out Fannie and Freddie is (a) socialism (b) fascism (c) necessary because the US needs foreigners to keep buying the GSE's debt. Okay, that was easy. Now explain why even with the 'full faith and credit' pledge behind Fannie and Freddie they still have to pay 215 baisis points over the yield on Treasuries.

The Oscar Goes... GM will not be advertising on the 2009 Acadamey Awards show. Or much of anywhere else, most likely; GM's $29 billion in bonds are now expected to be worth about 25 cents on the dollar when if GM defaults.

Porn O'Graph: Personal Savings Rate, Not .

SAR #8229

The euphoria over falling oil prices sounds
a lot like nervous giggling.

Fudge: OPEC says Saudi May production was 9.15 mbd, the EIA says they produced 9.4 mbd. OPEC claims total production for May was 1.5 million barrels a day less than the EIA claims. Who's making the brownies?

The Profit : Back in 2006, Nouriel Roubini came out of his Ivory Tower and made a bunch of predictions, which no one took seriously. Go back and read them. The first half have come true. We'd better pray to whatever gods there are that the second half do not.

Horse and Cart: It is anticipated that by 2050 - 40 years away - population will increase by 50%, food demand will increase by 100%, and arable land will fall by 50%. How they gonna do that?

Door #1 or Door #2: Investment firms seem to have but two options: Dump the bad loans for whatever they'll bring - even 17 cents on the dollar, but report it in ways that seem more like 85 cents on the dollar. That's the Citigroup/Merrill Lynch approach. The other is to hold on the trash, praying that one day soon the dross will turn to gold. That's the approach taken by Lehman and JPMorgan - the willing suspension of disbelief. And was also Bear Stearns' approach, but we don't want to talk about that.

Privatization: It's not just military support activities in Iraq that are getting privatized, nor the State Department's security, nor the Border Control's fences. Privatization has come to the Treasury, too. Morgan Stanley has been hired to tell the Treasury how shaky Freddie and Fannie are and how the government should go about rescuing them

Strategy: The Long War against Everybody, begun back in 2002 and going strong today, will be going on for the next 20 years or more, with two or three or more Afghanistans at a time, everywhere. And that will take lots and lots and more and ever more tax dollars. Which is the whole point. Bachman Turner Overdrive warned us.

Same-old Same-old : Foreclosures are up 55% from a year ago. Sales of existing houses fell 16% from 2007 to a 10-year low in the second quarter, while the median price of a single-family house fell nearly 8%. Falling sales, falling prices, falling consumer spending, mortgage rates up, one-third of all house sales in the quarter were foreclosed units or sales that lenders lost money on. The stock market rose again today.

Priorities : As the world's economies slow, any 'extra' funds that might have gone into R&D to counteract global warming are drying up, while the production of CO2 continues apace. We apparently have decided it is too costly and too much trouble to build lifeboats.

Porn O'Graph: Workers de-Ployed.

SAR #8228

Price trumps Principle.

Extended Warranty? With exquisitely bad timing, Poland agreed on Thursday to let the US plop down some ballistic missiles on the Russian border. The Ukraine, another recent US acquisition on Russia's borders, said it will require formal requests for permission from the Russians before Ukraine will permit Russian ships based at Ukrainian ports to maneuver. Meanwhile, the Russians have told the government of Georgia that the separatist provinces will not be returning to Georgian control, and Georgia's leader is trying to con the US into having the US military operate Georgian ports and airports.

Wide: Countrywide's mortgages are deteriorating at ever growing rates. The statistics are devastating but boring. Countrywide says the worst news will not show up for another 2 or 3 years..

Virginia Wolfe? Inflation at the consumer level is increasing at the fastest pace in 17 years. Meanwhile indications suggest an increasing slowdown in the economy. To fight inflation, the Fed will raise interest rates. To stimulate the economy, the Fed will lower interest rates. Alternate side of the street parking regulations remain in effect.

Yes, But: The US suggests it would be peachy keen to exempt India from the restrictions on expanding nuclear technologies. It wasn't immediately clear what the US was getting in return.

Heavy Fighting, Long Struggle Seen: General Dynamics is gearing up for a long struggle to recapture ground lost to Boeing as the Army plans to transfer hundreds of billions of dollars from General Dynamics' tanks, Strykers and APCs to Boeing's Future Combat Systems. Office-to-office fighting on Capital Hill is expected to intensify.

Selling the Sizzle: Researchers forecast that the US Midwest will have routine summer temperatures above 105 degrees Fahrenheit long before 2100. That's the optimistic forecast.

Smoke 'em If You've Got 'em: Saudi Arabia is the world's second largest producer of crude oil. It is the world's largest exporter of petroleum, but its consumption is growing at the world's fastest rate. It is producing a little less each day. It is using a little more each day. What's left, it exports.

Circular Logic: Even as higher gasoline prices were panicking the public into driving less, state and federal transportation officials were panicking over the loss of gasoline tax revenues needed to build more highways so people could drive more.

Elephant in a China Shoppe: GOPers are foaming at the mouth at the news that Iraq sells oil and keeps the profits. They want Iraq to pay to rebuild the infrastructure that two US-led wars, 10 years of US-led sanctions, and 5 years of US-led occupation have destroyed. The US broke it and killed a lot of Iraqis doing so. Least the US could do is replace the replaceable. Have the Iraqis stolen a lot of the reconstruction monies? Sure; after all, we're teaching them democracy.

SAR #8227

A war could make everything different.
Not better, just different. Ilargi

Distinction: The US helped Kosovo gain independence from Serbia; dropped bombs, sent troops. Russia is helping South Ossetia in its struggle for independence from Georgia; dropped bombs, sent troops.

Handouts: The only way the GOP can reduce taxes on most US companies would be to give them money, for two-thirds of them pay no federal income taxes and haven't since 1998. Foreign companies pay even less US taxes than homegrown ones do.

Creative Lying: Say a bank is stuck with unsold LBO paper. Loan is pretty risky. Loan is reported as sold for 85 cents on the dollar. Bank gives buyer a loan for 80% of the purchase, buyer puts up 20% - 17 cents on the dollar. Buyer agrees to eat the first 17 cents in loss (from face value?) and the bank agrees to eat the rest. Bank has sold the LBO loan paper at 17 cents on the dollar and reports getting 85 cents on the dollar. Bank lies.

Vive la Difference: Alt-A; the new subprime. Or “We’re all subprime now!”

Pulp Friction: Set aside the comics and pay attention; you won't learn the truth in the Pentagon propaganda outlets, print or television. Facts: The dust-up between Georgia and Russia was started by Georgia. Georgia is a police state run by a US-backed president. Georgia would not have invaded South Ossetia without US permission. Class dismissed.

Simpleton-ification: In a preemptive strike to keep scientists from blaming global warming on the emissions causing global warming, the Bush administration has decreed that the politically appointed heads of federal agencies can decide for themselves if dams, mines, mountaintop removal, power plants and such might harm endangered profits. This reverses 35 years of required environmental reviews of the environmental impact of greed.

They Laughed When Bill Sat Down To Play The Piano: On December 31, Bill Miller (Legg Mason's Value Trust hedge fund manager) owned 15 million shares of Freddie Mac at $34.07. By March 31, they had fallen to $25.32 and Bill had lost $131 million. But by then he owned 50 million shares. By July 31st, those 50 million shares were valued at $8.17 each and Bill had lost another $857 million while increasing his holding to 80 million shares. As of today those 80 million shares have dropped to $5.37 and Bill's down another $220 million. Maybe Bill does better in bull markets.

Musical Chairs: As credit markets continue to close down and banks raise their lending standards, no-one seems eager to extend credit for a house mortgage, a car, a student loan. Without expanding credit, without debt increasing, the US consumer economy will simply stop.

Money Talks : Even with significant domestic investments, oil producers sovereign wealth funds will keep growing and growing, like the Energizer bunny. The returns on their investments in dollar denominated capital markets have been very disappointing. How long before they become more active in managing their investments and our economy?

Porn O'Graph: The Alt-A Re-Cast Schedule.