Uh oh.. Here we go...?
12 American Warships, Including One Aircraft Carrier, And One Israeli Corvette, Cross Suez Canal On Way To Red Sea And Beyond
(6/19/2010 Zero Hedge)
"Arabic newspaper Al-Quds al-Arabi reports that 12 American warships, among which one aircraft carrier, as well as one Israeli corvette, and possibly a submarine, have crossed the Suez Canal on their way to the Red Sea. Concurrently, thousands of Egyptian soldiers were deployed along the canal to protect the ships. The passage disrupted traffic into the manmade canal for the "longest time in years." The immediate destination of the fleet is unknown. According to Global Security, two other carriers are already deployed in the region, with the CVN-73 Washington in the western Pacific as of May 26, and the CVN-69 Eisenhower supporting operation Enduring Freedom as of May 22. It is unclear at first read what the third carrier group may be, but if this news, which was also confirmed by the Jerusalem Post and Haaretz, is correct, then the Debka report about a surge in aircraft activity in the Persian Gulf is well on its way to being confirmed. There has been no update on the three Israeli nuclear-armed subs that are believed to be operating off the coast of Iran currently.
"Update: it appears the Aircraft Carrier crossing the Suez is almost certainly CVN-75 Harry Truman, which until recently was in the Mediterranean according to Stratfor. According to Wikipedia, "the super carrier can accommodate approximately 80 aircraft." For some more curious information on the Truman, click here."
The Zero Hedge article has the translation of the original Al-Quds al-Arabi article.
Three US carriers and Israeli nuclear subs in Red Sea.
Saturday, June 19, 2010
Uh oh.. Here we go...?
Reuters reports that BP's embattled CEO Tony Hayward's conspicuous absence from the annual business forum in Russia this week prompted speculations from Russia's political and industry leaders.
Frankly I do not know whether to read between the lines or take them at face value. But I do know that you don't necessarily want to be wished well by a Russian leader in your absence. The CEO of a large Russian steel company (Mechel Steel; stock symbol MTL) couldn't make it to the meeting with Prime Minister Vladimir Putin supposedly due to a sudden illness. Mr. Putin wished him a speedy recovery, and the company's shares plunged 38% in one day.
BP CEO the ghost at the feast as Russia fetes big oil
(Vladimir Soldatkin, 6/19/2010 Reuters)
"(Reuters) - The leaders of the global oil industry gathered as usual at Russia's top annual business forum this week but there was one ghost at the party.
"BP (BP.L) chief executive Tony Hayward, normally a regular, was conspicuous by his absence this year and his company's woes were a constant topic of discussion among those who did come." [The article continues.]
Here's what Reuters reports they said:
Russian President Dmitry Medvedev: the Kremlin was "not indifferent to their future" and adding: "Hopefully, they can absorb the losses."
[French oil major] Total CEO Christophe de Margerie: "I think we are all at stake and I do wish BP will survive"
Rosneft CEO Sergei Bogdanchikov: "We believe that a powerful company like BP can easily form the fund and asset sales will be minimal, if any"
Gazprom Neft's CEO Alexander Dyukov: "Big losses, but it will survive. In theory, a friendly takeover is possible"
LUKOIL President Vagit Alekperov: "We are not wolves", "We don't eat the weak."
Deputy Prime Minister Igor Sechin: the spill could affect key projects such as the giant Shtokman gas field in the Barents Sea. "Every time I think of the accident I break out in a cold sweat"; "The consequences are so grave and I understand the actions of the U.S. administration, which is focusing its attention on cleanup, but I also sympathize with BP."
Friday, June 18, 2010
"...Here are the facts: After the Exxon Valdez disaster off Alaska in 1989 had been cleaned up and nearly paid for by Exxon, the oil companies lobbied the Congress for liability limits — maximum amounts that they could be held to pay for in the event of a disaster.
"A Republican Congress and President Clinton together made it the law that oil companies would be limited to pay $75 million for cleanups and the taxpayers — that would be you — would pay the rest. In return, the feds would be able to tell the oil companies where to drill.
"In the case of BP, it asked the state of Louisiana if it could drill in 500 feet of water and Louisiana said it could. The federal government vetoed that and told BP could only drill in 5,000 feet of water.
"Never mind that no oil company had ever cleaned up a broken well at that depth and never mind that the feds had never monitored a broken well at that depth and never mind that BP only needed to set aside $75 million in case something went wrong. The feds trumped BP's engineers and the feds trumped the wishes of the folks who live along the Gulf Coast and the feds decided where this oil well would be drilled.
"Disaster struck. The feds did nothing. Oil gushed out in an amount that is so great as to be immeasurable. Political pressure grew.
"The president eventually panicked because he believes that his federal government can right every wrong, regulate every activity and protect us from every catastrophe. He is wrong. Louisiana Governor Bobby Jindal was ready to build barriers to protect his state's coastline and the feds said no.
"The president even invoked powers that allow him to supervise the cleanup using BP personnel and equipment. And the oil still gushes. Last week, the president stopped all oil drilling in the Gulf putting thousands out of work. Last night he demanded billions from BP so his team could decide who gets it and today a terrified BP gave him all the cash he asked for.
"So, the government that foolishly limited BP's maximum liability, the government that claimed it knew where best to drill, the government that actually stopped locals from protecting their own shoreline — that would be that same government that bankrupted Social Security, Medicare, Medicaid, the Post Office, Amtrak and virtually everything it has managed — now wants to decide who gets BP's cash.
"The last time this government had this much private cash to give away, during the GM and Chrysler bankruptcies, it disregarded well-settled law and gave it to the labor unions. To whom will it give this cash — the innocent injured or its political friends?
"The government cannot protect us from every catastrophe, especially ones its rules have facilitated. How about this: That government is best which governs least."
Emphasis is mine. The entire article can be viewed here.
by Gordon T. Long of Tipping Points.
A must read for us "small people" so that we can anticipate what is to come, prepare, and survive. (Emphasis is mine below.)
"There is something seriously wrong in America. We all sense it, but few in the mainstream media are willing to touch it or can effectively articulate it within the public’s sound-bite oriented attention span.
"It isn’t just about the remnants of the financial crisis; it isn’t the protracted jobs recession and slow recovery; it isn’t the trillions of dollars in deficit spending; it isn’t the degree of rampant financial malfeasants. It is something deeper which reaches into the soul of who we are as a people and society. It will soon be the central theme to your investment strategy and financial security.
"On the surface it might appear we have lost our optimism about the future and our confidence that America is still the ‘beacon on the hill’ that countries around the world admire and look to for leadership. Though our children mouth the platitudes taught by older generations, they ring hollow in the hallways with video surveillance, motion detectors and metal detectors when recite by them. The high minded ideals seem misplaced in unemployment lines where they stand with freshly minted advanced degrees in hand, huge education debts and little hope other than the faint possibility of a non-paying internship position.
"It isn’t that the American people have changed. Our government has changed."
Thursday, June 17, 2010
Geez that was quick.
"Rep. Joe Barton (R-Texas) is apologizing for his apology.
"After infuriating Democrats and Republicans alike with his public apology to BP and suggesting that a $20 billion escrow fund was a “shakedown” by the White House, Barton is now “retracting” his statement, made at a hearing with BP CEO Tony Hayward.
"“I apologize for using the term ‘shakedown’ with regard to yesterday’s actions at the White House in my opening statement this morning, and I retract my apology to BP,” Barton said. “As I told my colleagues yesterday and said again this morning, BP should bear the full financial responsibility for the accident on their lease in the Gulf of Mexico. BP should fully compensate those families and businesses that have been hurt by this accident.""
The moment I thought I heard the truthful speech from a politician, it was retracted.
Again, he was not denying that BP should fully compensate for the damage. He was saying the way the White House pressured BP into coughing up $20 billion fund to be managed by the Obama appointee (Pay Czar) was a shakedown and it shouldn't have happened.
But English comprehension is not practiced in the US, and people are conditioned to simply react to sound bites without context or meaning.
Good luck getting any money for the damage from this shakedown fund managed by the government. Already, the definition of "damage" is quickly broadening; one politician wants to use that money to provide health care to people who lost their jobs and lost their health care insurance coverage.
Why stop at health care? Why not food stamp program, child care program, unemployment checks, low-income housing? How about paying to retain public union workers - teachers, firefighters and policemen?
Who needs the government, if you have BP?
Maybe it's not a good idea to have the government in charge, after all.
BP Oil Spill: Against Gov. Jindal's Wishes, Crude-Sucking Barges Stopped by Coast Guard (6/17/2010 ABC News)
"Eight days ago, Louisiana Gov. Bobby Jindal ordered barges to begin vacuuming crude oil out of his state's oil-soaked waters. Today, against the governor's wishes, those barges sat idle, even as more oil flowed toward the Louisiana shore.
""It's the most frustrating thing," the Republican governor said today in Buras, La. "Literally, yesterday morning we found out that they were halting all of these barges."
"Sixteen barges sat stationary today, although they were sucking up thousands of gallons of BP's oil as recently as Tuesday. Workers in hazmat suits and gas masks pumped the oil out of the Louisiana waters and into steel tanks. It was a homegrown idea that seemed to be effective at collecting the thick gunk."
So why was the operation stopped?
"The Coast Guard needed to confirm that there were fire extinguishers and life vests on board, and then it had trouble contacting the people who built the barges."
They needed to see the proper permit. Governor Jindal, a Republican, says he didn't have the authority to override the Coast Guard. After much wrangling, the operation finally resumed, 24 hours later.
Governor Riley of Alabama, another Republican, doesn't have much luck with the Coast Guard either.
"Riley, R-Ala., asked the Coast Guard to find ocean boom tall enough to handle strong waves and protect his shoreline. The Coast Guard went all the way to Bahrain to find it, but when it came time to deploy it?"
It went to Louisiana.
Bloomberg reports that a class-action lawsuit has been filed in federal court in New Orleans against BP and Nalco, manufacturer of the chemical dispersant that BP has been using.
The suits claims that "is four times more toxic than the oil itself", and that "the dispersant has been sprayed over the Gulf of Mexico and has caused a toxic chemical to be a permanent part of the sea bed and food chain in the bio structure"; and the chemical causes "an even more dangerous condition to exist in the Gulf of Mexico than if the oil was allowed to float to the shoreline."
Ever distrustful of trial lawyers, I decided to check what exactly are these horrific toxic chemicals.
What is a dispersant? It is essentially a detergent made up of cleaning agent, emulsifier and surfactant.
Nalco, whose largest institutional investor is Warren Buffett of Berkshire Hathaway, has the chemical components of the dispersant, COREXIT, on its website:
Common Day-to-Day Use Examples
Skin cream, body shampoo, emulsifier in juice
Sorbitan, mono-(9Z)-9-octadecenoate, poly(oxy-1,2-ethanediyl) derivs.
Baby bath, mouth wash, face lotion, emulsifier in food
Sorbitan, tri-(9Z)-9-octadecenoate, poly(oxy-1,2-ethanediyl) derivs
Body/Face lotion, tanning lotions
* Butanedioic acid, 2-sulfo-, 1,4-bis(2-ethylhexyl) ester, sodium salt (1:1)
Wetting agent in cosmetic products, gelatin, beverages
Household cleaning products
Distillates (petroleum), hydrotreated light
Air freshener, cleaner
** Ethanol, 2-butoxy
* Contains 2-Propanediol** This chemical component (Ethanol, 2-butoxy-) is NOT included in the composition of COREXIT 9500
What BP is using is COREXIT 9500, without 2-butoxy ethanol, which is used widely in household cleaning solutions (Windex, Simple Green, to name a few). It decomposes within a few days in the environment.
Hydrotreated light distillates is Mineral Oil, used as lubricant and cleaner.
Butanedioic acid is used in industrial hand cleaner, paint stripper, body soap, and as food additive. It is readily biodegradable.
Sorbitan is a surfactant used as an emulsifier (i.e. mixing two hard-to-mix substances like water and oil), and is widely used in cosmetics and personal care items like shampoo and soap.
1-Propanol is a primary alcohol used as solvent in pharmaceutical industry. It degrades rapidly in the environment, and has low aquatic toxicity.
And we are supposed to be so scared of these 'toxic' chemicals. Then we are beset with 'toxic' chemicals every day all around us, and we don't even need to dive in the Gulf of Mexico to get exposed.
Good for him.
Republican apologizes to BP for 'shakedown' by government
(6/17/2010 The Hill)
"A top Republican lawmaker apologized to BP on Thursday for what he said was a "shakedown" by the government of the oil company in forcing it to create a $20 billion fund to pay out damages resulting from the Gulf of Mexico oil spill.
"“I am ashamed of what happened in the White House yesterday," said Rep. Joe Barton (R-Texas), apologizing to the oil company.
"Barton, the ranking member of the House Energy and Commerce, said that the relief fund BP created under pressure from President Barack Obama was, in essence, a "slush fund.""
The "thin-skinned, controlling" White House, along with the Congressional leaders of both GOP and Dems, immediately attacks Barton by mischaracterizing his remark. The Hill article continues:
"White House press secretary Robert Gibbs called on both parties to "repudiate" Barton's comments.
“What is shameful is that Joe Barton seems to have more concern for big corporations that caused this disaster than the fishermen, small business owners and communities whose lives have been devastated by the destruction," he said in a statement.
"Congressman Barton may think that a fund to compensate these Americans is a ‘tragedy’, but most Americans know that the real tragedy is what the men and women of the Gulf Coast are going through right now," Gibbs said."
Barton is not saying any of that. He is saying $20 billion escrow fund that BP was made to agree on by the White House amounts to nothing but a "slush fund" for the administration. If anyone thinks the money, all of it or close to it, will go to "fishermen, small business owners and communities", he/she is so naive.
Now let's look at what this $20 billion escrow fund is about. Below are some of the salient points from the announcement from the White House, with my interpretation:
- An independent claims facility will be created to process the claims, will be administered by none other than Kenneth Feinberg, Obama's Pay Czar who has been dictating the Wall Street pay in a peculiarly inconsistent manner (stripping Bank of America's Ken Lewis' salary to zero while giving the CEO of AIG, of all firms, more than $10 billion, and the Vampire Squid is free to pay its executives any amount they deserve for a great financial firm like theirs.).
- The facility will develop standards for claims. The facility is for "small people" (individuals and businesses) who are affected by the oil spill; local, state, tribal, and federal government claims will continue to be handled directly by BP. So the governments' claims are handled outside this escrow fund facility and directly by BP, assuring the speedy payout. (Good luck, "small people", filing documents after documents going through the process fighting the petty bureaucrats.)
- A panel of three judges will be appointed to hear appeals.
- BP will contribute $20 billion over 4 years to the escrow account ($5 billion each year). BP will set aside $20 billion US assets. In other words, the escrow account is secured by BP's real assets. If BP fails to contribute funds, therefore, the government will seize the collateral.
- $20 billion is not a floor, nor a ceiling on liabilities. So the amount BP will be forced to pay is essentially unlimited.
- BP will voluntarily contribute $100 million to support unemployed oil rig workers, who were made unemployed by the moratorium on drilling imposed by the government. Those jobs may not come back, as oil rigs are in demand elsewhere in the world, notably in Brazil. Oil companies are paying half a million dollars a day for a deepwater oil rig. They can't afford to have them floating idle.
It is a theft, from a private business, in the name of "small people", to empower and enrich the bureaucracy of the government.
BP has caused the world-class disaster; magnitude of which we haven't figure out yet. So the government butts in, and profits as go-between.
Never waste a crisis.
Wednesday, June 16, 2010
The more I read, the more I'm convinced that BP is still hiding the vital information to assess the situation, let alone to devise plans to tackle the leak.
And the Obama admin is not too keen on seeking that information either, judging by Obama's speech last night, in which he talked about some "post-spill" policy actions. We are still in the middle of the spill, Mr. President, in case you haven't noticed.
Take this for example: the rumor is circulating that the well casing has been either severely damaged or destroyed, and that's why BP called off the "Top Kill" quickly.
Oil industry experts say if the well casing is destroyed, there is no way to seal off the well. (See this post on Washington's Blog.)
The well casing was sealed with a relatively new type of cement - light, quicker-curing nitrogen-infused cement offered by Halliburton. According to the testimony of Halliburton's cementer Christopher Haire, the new cement was used in the deepest casing, contradicting the testimony of Transocean's Jimmy Harrell, the top drilling official on the rig when it exploded in the Gulf on April 20, who testified that the rig had only used the nitrified cement on shallower casings.
From Halliburton's website, this type of cement, "Foam Systems", is promoted as a cost-saving alternative to conventional cementing.
Nitrogen-infused cement was known to have caused problems in other rigs. Nitrogen in the cement could get in the well hole; chemicals used in the cement for faster cure "create a lot of heat, which can thaw the methane hydrate into the gas that causes dangerous kicks". (Source: The Oil Drum)
Then there is this case of a cheap ($7) rubberized plastic seal that probably broke in the Blowout Preventer (BOP), rendering the BOP useless.
The last (and bottom) segment of the BP-designed well casing didn't have an O-ring seal.
Fluffy cement, a cheap plastic seal for the BOP, a missing O-ring - minor details that may have caused the blow-up and which could have easily, and cheaply been corrected.
After the speech from the Oval Office yesterday which had been much hyped by the administration and which fell flat on just about anyone, Obama met with BP officials at the White House.
For how long? It was scheduled to be 20 minutes.
According to media reports, the meeting went overtime by several hours, but the "I'm in charge, I'm responsible" president had long left the meeting.
Left after 20 minutes?
No one knows.
This is the Presidential schedule for the day, courtesy of CBS.
10:15AM: President Obama and Vice President Biden attend a meeting with BP executives
10:35AM: President Obama and Vice President Biden receive the Presidential Daily Briefing
11:05AM: President Obama and Vice President Biden receive the Economic Daily Briefing
12:15PM: President Obama delivers a statement to the press
12:30PM: President Obama and Vice President Biden have lunch
1:45PM: President Obama meets with senior advisers
2:30PM: President Obama meets with Senator Scott Brown
5:35PM: President Obama delivers remarks at the American Nurses Association House of Delegates
(Meeting with Scott Brown? That's interesting.)
(He and VP Biden have lunch together almost every day.)
(What a light-weight schedule, but on other days it is even lighter. Wonder what the schedule of George Bush was like.)
Tuesday, June 15, 2010
Look what's being resurrected from the dead, thanks to the Gulf oil spill debacle: Crap and Trap, aka Cap and Trade. Even Al Gore is back in the spotlight!
Have you seen the movie "Groundhog Day"?
Senators Lieberman and Kerry excoriate us the non-believers in Crap and Trap that if we are unwilling to shell out less than a dollar a day every single day for the rest of our lives to save the planet (and developing nations in particular) from the good old man-made global warming, we are bad, we are selfish, we are demagogues. Probably we are terrorists, too, in their eyes, if we dare insist on using oil and gas.
The "less than a dollar a day" figure comes from the EPA, an executive-branch agency (i.e. Obama's tool). That's on top of the added tax per family of over $2000 per year (calculated by none other than the Obama administration).
This is right back to one year ago, when Obama and his underlings kept pushing for agenda after agenda after agenda. No wonder the stock market is rising again, just like last year. It will keep rising for another 12 months, for sure. It was exactly one year ago that the House passed the climate bill.
(Here's the link to this blog's June 2009 archive. There I was, blogging about carbon emission allowance as new bubble. Just look through the headlines. Hardly anything has changed. Cap and trade, financial reform bill, fear of hyperinflation, ECB pouring $600 billion to prop up money market funds... This is indeed "Groundhog Day"...)
Just like Goldman Sachs gives thumbs up for the financial "reform" bill, the cap and trade climate bill is supported by three oil majors. That alone would tell you that they are the ones who will profit handsomely at the expense of, as usual, taxpayers. And also remember the nice joint venture by Goldman Sachs and Al Gore on carbon trading exchange.
There is a name for the type of government run by technocrats in bed with large corporate interests. It starts with "f".
There's an interesting article on Money Morning about much-reported BP's Gulf oil spill and far-less-reported EOG Resources' Marcellus Shale gas explosion.
They have one thing in common, says the author, Dr. Kent Moors: a thin, cheap, rubberized plastic seal used in the Blowout Preventer (BOP).
In the article "Marcellus Explosion-BP Spill: Both Involved This Faulty $7 Piece of Plastic", Dr. Moors says:
"At Clearfield, as gas production was beginning, the well experienced a sudden increase in pressure. The BOP, a cheap, rubberized seal, forms a series of redundant valves that should allow technicians to stop the flow of oil or gas, stabilize a system, or even cap a well in the event of a pressure surge.
"But the BOP connection malfunctioned; the seal was broken, and with it went any chance of preventing or controlling the blowout itself.
"It is also clear that a BOP failure brought about the sinking of the Deepwater Horizon platform in the Gulf, the destruction of the most advanced piece offshore drilling equipment, along with the deaths of 11 people and the likely destruction of an entire region's economy."
The company who manufactured those BOPs that failed in Marcellus Shale and BP's Deepwater Horizon is Cameron International (stock symbol: CAM), who maintains that an electrical problem was the cause of malfunction at Deepwater Horizon. They have evaded the scrutiny so far, much like that company who manufactured gas pedal assembly for Toyota.
I just wonder: who makes those cheap plastic seals for BOPs? (searched using Aribaba.com)
I don't know whether Cameron makes those seals (I highly doubt it) or source them from Asia, most notably China as a cursory Aribaba search indicates.
Either way, I wouldn't be surprised that the seals failed: the US manufacturing capability is down the drain for a very long time now, and the Chinese are good at making something that looks like something but is actually not.
By the way, BP's well-casing didn't have an O-ring seal in it. Again, I don't know that, but I wouldn't be surprised if the O-ring seal was omitted to save cost. An O-ring is a gasket that act as a seal in the joints of an equipment. It is CHEAP.
Penny wise, multi-billion dollar stupid.
Finally, a new Czar!! (What took him so long?)
Business Insider reports that Obama's solution to the Gulf oil spill is to name his 'Oil Czar':
Oh Boy: Obama's Solution Is To Name An "Oil Czar" (6/15/2010 Business Insider)
"Obama will name an Oil Czar tonight in his live televized address (via Hot Air).
"We have no idea who it will be, but Press Secretary Robert Gibbs assures us it will be "somebody that will be in charge of a recovery plan, putting a recovery plan together.... when we get past the cleanup and response phase of the disaster."
"The Oil Czar will join the ranks of nearly 30 others czars in Obama's increasingly technocratic regime."
Technocratic? Maybe, except Obama's Czars don't seem that knowledgeable in their supposed expertise.
More and more, his regime resembles that of the czarist Russia, where dissent is not allowed by a thin-skinned despot.
The Hot Air article linked by Business Insider has an interesting remark about Obama's Czars:
"...the appointment of a “czar” is another way to outsource leadership. ...The insertion of a “czar” with an even broader mandate will not clarify the chain of command and the mission — it will make both more ambiguous and more difficult."
Ah, but at least I can now update my Obama's Czars list for the first time in a very long time...
(How many czars are needed to change a lightbulb at the White House?)
and not his Katrina. That's bad news for us.
Drudge Report's headlines are often priceless. I had to screen capture this one, past midnight on June 15.
As Louisiana governor finally stops waiting for BP or the federal government and takes the matter in his own hands, Obama visits the Gulf region, enjoys a snowcone on a white-sand beach. Come on down and have fun, people!
(I wonder how many workers it took to pretty up the beach for the presidential visit. Oh I get it. He is stimulating a job growth in the region.)
But Mr. President, the bright sandy beaches are not so much of of an issue. It is under the ocean surface. The real problem is under the ocean floor, for that matter. It sure made a nice photo op though, that sandy beach with beach umbrellas. I bet the food was excellent, too.
This segment is placed in the center column, right below the Drudge Report banner. Above the banner, a headline screams in capital letter "OBAMA SAYS: IT IS LIKE 911" which links to the article on Daily Mail UK.
9/11 enabled his predecessor to wage wars in Afghanistan and Iraq, which Obama continues, and to hoist Patriot Act on us which Obama has expanded. Now he is declaring this oil spill as his "9/11". (So BP is Al Qaeda?)
Never waste a crisis. If there is no crisis, make one, so that you can push the agendas that would never see the light of day under the normal circumstance. For having done almost nothing except for looking and talking tough for nearly two months amid two vacations, parties, and rounds of golf, he sure has created a greater crisis and disaster than what might have been.
I'm not particularly holding my breath to see what kind of agendas will be forced on us as the result of this Obama's 9/11.
Monday, June 14, 2010
Police now works for the debt collectors. Star Tribune of Minneapolis-St Paul reports:
In jail for being in debt
(CHRIS SERRES and GLENN HOWATT, 6/9/2010 Startribune.com)
"You committed no crime, but an officer is knocking on your door. More Minnesotans are surprised to find themselves being locked up over debts.
"...It's not a crime to owe money, and debtors' prisons were abolished in the United States in the 19th century. But people are routinely being thrown in jail for failing to pay debts. In Minnesota, which has some of the most creditor-friendly laws in the country, the use of arrest warrants against debtors has jumped 60 percent over the past four years, with 845 cases in 2009, a Star Tribune analysis of state court data has found.
"...Whether a debtor is locked up depends largely on where the person lives, because enforcement is inconsistent from state to state, and even county to county.
"In Illinois and southwest Indiana, some judges jail debtors for missing court-ordered debt payments. In extreme cases, people stay in jail until they raise a minimum payment. In January, a judge sentenced a Kenney, Ill., man "to indefinite incarceration" until he came up with $300 toward a lumber yard debt.
""The law enforcement system has unwittingly become a tool of the debt collectors," said Michael Kinkley, an attorney in Spokane, Wash., who has represented arrested debtors. "The debt collectors are abusing the system and intimidating people, and law enforcement is going along with it."
"How often are debtors arrested across the country? No one can say. No national statistics are kept, and the practice is largely unnoticed outside legal circles. "My suspicion is the debt collection industry does not want the world to know these arrests are happening, because the practice would be widely condemned," said Robert Hobbs, deputy director of the National Consumer Law Center in Boston."
"...The laws allowing for the arrest of someone for an unpaid debt are not new.
"What is new is the rise of well-funded, aggressive and centralized collection firms, in many cases run by attorneys, that buy up unpaid debt and use the courts to collect." [Emphasis is mine. The article continues.]
It looks like 'ambulance chasers' have found a more secure, if less lucrative, line of business.
These collection firms are not much different in what they do from high-flying hedge funds like Paulson & Co. They buy distressed assets from the banks (credit card debt for the former, residential mortgages for the latter) at a huge discount. Now it is up to them to collect more than the discounted amount that they pay to the banks.
Hedge funds and wealthy investors who purchase discounted mortgages have the US government (i.e. taxpayers) as backstop. The debt is secured by the property.
Unlike mortgage debt, credit card debt is unsecured. So the new owners of this debt have to be aggressive if they want to maximize their return on the investment. That's where the police and the court system come in. Instead of protecting citizens from predatory firms who abuse the public justice system to increase their profits, the system works for these firms.
You think Chris "Friend of Angelo" Dodd's so-called financial 'reform' bill has anything to say about this new breed debt collectors and to actually protect consumers?
As for the banks who sell distressed/delinquent unsecured debts to these collection firms (Bank of America, Chase, Citigroup, etc.), they have nothing to complain, as far as I'm concerned. They issued those unsecured credits; no one compelled them to. They simply created 'money' from thin air, and put the digits in the borrowers' accounts. It cost them zero to create the money. On their balance sheets they recorded them as 'assets' (magic of fractional-reserve banking), so when they write them down the balance sheets get hit. So what? It still didn't cost them anything, they got some money when they sold these assets to debt collectors, and they have the government backstop.
As Simmons & Co upgrades BP to 'buy' while its CEO Matt Simmons says BP will seek Chapter 11 in a month, the CEO may get his wish sooner.
BP May Lose U.S. Oil Leases, Contracts as Gulf Spill Punishment
"June 14 (Bloomberg) -- BP Plc may lose control of its U.S. oil and natural gas wells and be barred from doing business with the federal government as punishment for the worst oil spill in U.S. history, industry and regulatory analysts said.
"President Barack Obama and lawmakers are debating penalties that would cripple the company’s ability to do business in the U.S. as public outrage intensifies. In addition to BP’s culpability in the Gulf of Mexico spill, a 2005 explosion at BP’s Texas City refinery that killed 15 workers and a 2006 pipeline leak that dumped 200,000 gallons of crude at Prudhoe Bay, Alaska, will figure in the debate, said Michael Wara, associate professor of environmental law at Stanford University in Palo Alto, California.
"“The government weighs whether there is a pattern and practice,” Wara said. “They’ll consider whether BP runs these incredibly complicated systems, where accidents can and sometimes do happen, or whether the company has a culture that disfavors safety and environmental compliance.” " [The article continues.]
One expert quoted in the article says of the potential government move: “It’s exceedingly possible and exceedingly unwise,” McKenna said. “You engage in the economic deterioration of a company that’s already under stress.”
Therefore it is likely to happen. That's the government way.
Just so that Obama can appear in the eyes of adoring environmentalists who thank Obama for being "the best environmental president" the country has had since Teddy Roosevelt (cognitive dissonance, anyone?) that he is kicking ass.
An increasingly imperial federal government's all-out war on a private business.
And his government was going to give a pollution prevention and safety award to BP. (BP was one the three finalists.)
Obama hasn't returned campaign donations from BP. (He refused to return $1 million campaign donations from Goldman Sachs.)
He hasn't even met the CEO Tony Hayward. (He's meeting the BP chairman after almost two months since the spill. But he had plenty of time for golf, again.)
Senate Dems wants BP to set up $20 billion escrow account from which to pay for damages.
(There goes some analysts' optimistic assessment that BP's liability is likely to be limited to less than $10 billion total.)
BP's market cap as of last Friday is $106 billion. Only a few weeks ago it was bigger than Chevron ($148 billion). BP has $236 billion in assets on its balance sheet.
Growing public anger toward BP? Or toward Obama's government? Or environmental groups like Sierra Club?
Sunday, June 13, 2010
Government workers earning almost twice as much as private sector workers is not enough for him.
Wait, is this $50 billion on top of the provisions in the latest jobs bill ($23 billion) and FY2010 Supplemental Appropriations Bill ($25 billion) that would be used to 'save' those same jobs? If it is, Obama wants to give away another $100 billion total for these public union workers.
Obama pleads for $50 billion in state, local aid
(Lori Montgomery, 6/13/2010 Washington Post)
"President Obama urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid "massive layoffs of teachers, police and firefighters" and to support the still-fragile economic recovery.
"In a letter to congressional leaders, Obama defended last year's huge economic stimulus package, saying it helped break the economy's free fall, but argued that more spending is urgent and unavoidable. "We must take these emergency measures," he wrote in an appeal aimed primarily at members of his own party.
""I think there is spending fatigue," House Majority Leader Steny H. Hoyer (D-Md.) said recently. "It's tough in both houses to get votes."
"Democrats, particularly in the House, have voted for politically costly initiatives at Obama's insistence, most notably health-care and climate change legislation. But faced with an electorate widely viewed as angry and hostile to incumbents, many are increasingly reluctant to take politically unpopular positions.
"Obama asks lawmakers to be patient on the deficit, noting that a special commission is at work on a comprehensive deficit-reduction plan.
""It is essential that we continue to explore additional measures to spur job creation and build momentum toward recovery, even as we establish a path to long-term fiscal discipline," Obama wrote. "At this critical moment, we cannot afford to slide backwards just as our recovery is taking hold."" [The article continues.]
I'm sure his commission will come up with a winner. (How about disbanding itself to save money?)
So to summarize: to help save the jobs of teachers at public schools which are not educating kids, and police and firefighters who will retire with fat pensions courtesy of tax payers will spur job creation and boost the economic recovery.
Make sense, doesn't it?
Maybe the 'newly discovered' $1 trillion mineral deposits in Afghanistan will pay for all this and more. (Remember, oil from Iraq was supposed to pay for the recovery of Iraq.)
Never waste a good crisis (even when the crisis - BP oil spill - has nothing to do with lifestyle behavior modification).
It's all for our own good. As increasingly cynical Zero Hedge reports:
Obama Begins "Lifestyle Health Modification" Program, Mandating Behavioural Changes Within US Society (Tyler Durden, 6/13/2010 Zero Hedge)
"Last week, with little fanfare, among the ever deteriorating oil spill crisis, the White House quietly noted the issuance of an executive order "Establishing the National Prevention, Health Promotion, and Public Health Council", in which the president, citing the “authority vested in me as President by the Constitution and the laws of the United States of America” is now actively engaging in "lifestyle behavior modification" for American citizens that do not exhibit "healthy behavior." At least initially, the 8 main verticals of focus will include: smoking cessation; proper nutrition; appropriate exercise; mental health; behavioral health; sedentary behavior; substance-use disorder; and domestic violence screenings."
The actual executive order that's linked in the paragraph above does say "lifestyle behavior modification". It establishes the Council as in the title of the order, plus the advisory board. These are on top of the huge and numerous councils and boards to be established by the health care "reform" bill that was passed and signed into law, unfortunately for majority of Americans who still oppose it.
Zero Hedge as this observation at the end:
"Tangentially, we wonder if the president and the head of the House Financial Services Committee have kicked their respective tobacco/KFC habits yet."
Probably haven't. That may be why they want to drag the entire nation in kicking their respective habits. Much like ancient kings and emperors demanded that his wives, slaves, their favorite horses and hapless subjects selected for the occasion, be killed so that they could accompany him when he died.
BTW, just so you know, the federal officials wants to ban peanuts on commercial flights to alleviate fears of 1.8 million Americans who has peanut allergies.