Baltic Dry Index. 3354 -05 (Friday.)
LIR Gold Target by 2019: $3,000.
“If a black cat walks towards you, it brings good fortune, but if it walks away, it takes the good luck with it.”
First it was an out of control volcano in Iceland which shut down Europe’s airspace for a week. Then BP set off the continuing oil disaster in the Gulf of Mexico, a disaster of unknowable ecological consequence at this time until the leaking oil well finally gets shut down. This morning the ash is back as Iceland’s unpronounceable volcano became active again a few days ago and is carried by the prevailing winds to bring a new ash cloud to Ireland and the Western Isles of Scotland. Will tomorrow turn into Ash Wednesday for the rest of Europe? My guess is that later today the UK’s northern airports will also close. Below, the Telegraph covers Iceland v Europe round 2. Since bad things often turn up in threes, what else could possibly go wrong this week?
“Evil spirits can't harm you when you stand inside a circle.”
Volcanic ash cloud shuts down Irish airspace
Flights in and out of Ireland will be grounded for six hours on Tuesday as the Icelandic volcanic ash cloud returns, air chiefs confirmed
Published: 10:05PM BST 03 May 2010
The Irish Aviation Authority (IAA) said restrictions will be imposed from 7am to 1pm as a dense plume travels across the island.
The authority said the decision to ground aircraft was based on the safety risks to crews and passengers as a result of the drift south of the volcanic ash cloud caused by the north-easterly winds.
It maintained that Ireland falls within the predicted area of ash concentrations that exceed acceptable engine manufacturer tolerance levels.
''Current information from the Volcanic Ash Advice Centre (VAAC) suggests that a no-fly zone will have to be imposed over Ireland tomorrow that will affect Dublin, Shannon Galway, Sligo, Ireland West (Knock), Donegal, Cork and Kerry,'' said a spokesman.
''No flights will operate in or out of these airports until at least 1300hrs local tomorrow,'' he added.
The IAA said over-flights of Ireland from the UK and Europe will not be impacted tomorrow with flights in mainland Europe operating normally.
Last month a lockdown of nearly all of northern European airspace due to a cloud of volcanic ash from Iceland stranded an estimated 10 million passengers across the continent.
But European air traffic controllers have now revised the rules governing volcanic ash, allowing flights to continue through areas of low density.
----Now planes are allowed to fly through volcanic ash provided that its concentration is not considered likely to pose any risk to aircraft and passengers.
"As things stand the dense ash cloud is much smaller than the one we were looking at last month," a NATS spokesman said.
Next, the latest on the oil spill crisis in the Gulf of Mexico. No one is coming out of this crisis looking good. Two weeks on, and no one really seems to know how much oil is actually being released into the Gulf and why. Up first, Rupert Murdoch’s London Times on the latest details and a surprising failure right from day one.
“It's good luck to find a four-leaf clover.”
May 4, 2010
US had burn-off plan for oil spills but the equipment wasn’t there
The White House faced claims last night that the Gulf Coast oil spill could have been contained and kept far from land within days of the Deepwater Horizon explosion if oil from the gushing wellhead had been burnt off in line with a plan drafted by the US Government for precisely this sort of disaster.
The plan requires the immediate deployment of specialised “fire booms” capable of burning 95 per cent of a slick— but not one boom was available on the Gulf Coast at the time of the blast, according to a supplier who eventually provided one eight days later.
“The whole reason the plan was created was so that we could pull the trigger right away,” Ron Gourget, a former federal oil spill response co-ordinator and one of those who drafted the document, said yesterday.
The disclosure came as officials analysed the bodies of 23 dead sea turtles found on Mississippi beaches to see if they were poisoned by the growing slick, and the Port of New Orleans planned to start scrubbing ships’ hulls as they enter the Mississippi River.
Thirteen days into the disaster, engineers were no closer to shutting off the flow of oil at its source 40 miles from the entrance to the river, whose lowest section is one of the world’s busiest shipping lanes. The spillage continues to run at 5,000 barrels of oil each day.
So far, merchant vessels have been guided round the slick. But if it grows to the point that they have to plough through it, they will be scrubbed with high-pressure hoses at two cleaning stations being set up in the delta region, 75 miles southeast of Louisiana’s main container port.
“The crucial question is whether the ship is transporting oil into clean water,” Chris Bonura, of the Port of New Orleans, said. Cleaning is not yet mandatory, but the US Coast Guard could require it if there were a risk of contaminating the river with the heavy oil at the centre of the slick.
Hopes of reactivating the blowout preventer, whose failure caused the spill, appeared to be fading yesterday as BP shifted its public focus to three giant structures being built from steel and concrete to be lowered over the three separate leaks 5,000ft (1,5000m) below the surface of the Gulf of Mexico.
-----The race to cap the well and contain a spill the size of Puerto Rico continued against a background of fingerpointing by the US Government and BP. Robert Gibbs, the White House press secretary, repeated what is becoming the Administration’s favourite metaphor, saying the Government would “keep a boot to the throat” of BP to make sure it fulfils its responsibility to lead and pay for the clean-up.
-----A single fire boom of the kind required by the “In-Situ Burn” plan drafted by the National Oceanic and Atmospheric Administration for Gulf Coast spills can burn up to 75,000 gallons of oil an hour – roughly a third of the estimated daily leakage from the Deepwater Horizon site.
“They said this was the tool of last resort,” Jeff Bohleber, a supplier of the booms, said. “No, this is absolutely the asset of first use. Get in there and start burning the oil before the spill gets out of hand.”
So far federal officials have authorised only one test burn eight days into the disaster, using a boom obtained from Mr Bohleber in Illinois, when it became clear that none was available in the Gulf region. Instead of burning, emergency workers are relying on chemical dispersants being injected by submersibles directly into the leaks in the collapsed riser pipe that connected the wellhead to the rig.
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article7115273.ece
BP pursues at least five ways to stop spill
By BRETT CLANTON HOUSTON CHRONICLE May 3, 2010, 10:18PM
BP says it is working on at least five possible approaches for halting the spew of oil from a damaged well deep in the Gulf of Mexico that is feeding one of the worst spills in U.S. history.
The company says all of the plans are moving forward simultaneously, even though some may turn out to be unnecessary or unsuccessful. But several of the ideas, once considered backup solutions, have begun to figure more prominently into the sweeping effort, including work on a subsea collection system for leaking oil and the drilling of a relief well to stop the flow from the damaged one.
That work is centered at BP's offices in west Houston, where hundreds of engineers and technical specialists, representing 160 companies, are assembled to attack the growing crisis.
-----After more than 10 days of continuous work without success, BP officials still hope to seal the well at any moment using robot submarines to activate an array of shut-off valves atop the well, called a blowout preventer.
-----Investigations are still trying to determine causes of the disaster, but Fryar said “there is nothing unique about the situation that was taking place at the time that would have prohibited the (blowout preventer) system from working as designed.”
Meanwhile, BP said Monday four other solutions for halting the flow of oil from the well are gathering momentum.
Those include installing huge containment boxes over leaks to collect the oil and send it through a mile of pipe to a ship above; using long wands to spray chemical dispersants on the leaks at the sea floor to break up oil and keep it from rising to the surface; lowering a second blowout preventer onto the damaged one to seal the well; and drilling a relief well to intercept the damaged one and plug it.
Monday night, the company planned to install a valve on the end of a leaking drill pipe — one of three leaks in equipment down below — that could help slow the flow from the well.
That would be a first step in preparing to place one of two containment boxes over a leak causing the majority of the spill by as soon as this weekend, BP officials said. A second box would be placed over a smaller leak close to the wellhead several days later.
“Over the next seven days or so, we'll be actually trying to connect all these pieces up and start up that system,” said Doug Suttles, chief operating officer of BP exploration and production, during a press briefing Monday. But he cautioned the technology has never been tried in such deep water.
In addition, deep-sea injection of chemical dispersants directly at the source of the leaks continues, and officials are hoping an aerial assessment will soon give them a sense of how effective that has been.
-----BP says it will try this week to take pressure measurements within the 50-foot tall blowout preventer atop the well to determine if it is safe to remove a top portion of the stack called the lower marine riser package. Removing the piece would allow BP to lower another blowout preventer on top of the damaged one to seal the well, but also might carry a danger of rupturing the well further.
As a last-ditch effort, BP began Monday afternoon drilling a relief well into the damaged well with the hope of permanently sealing it, though that process could take 60 to 90 days, company officials said.
http://www.chron.com/disp/story.mpl/business/deepwaterhorizon/6988333.html
Underwater Robots Probe ‘Inner Space’ to Plug Leaking Oil Well
----“Those guys are good at what they do, but they’ve got a challenge on their hands,” said Oden, who works in Houston for Ocean Corp., a company that trains oilfield divers and inspectors. “The whole world is watching.”
Oceaneering International Inc., the world’s largest provider of remote-operated vehicles, is supplying BP with equipment and workers to help stem the leak, Chief Executive Officer Jay Collins said on an April 29 conference call. He declined to give details.
Oceaneering supplied Transocean Ltd.’s Deepwater Horizon drilling rig with an underwater robot system that was destroyed when the rig burned and sank April 22 following an explosion at BP’s well. Three of the company’s employees were rescued, while 11 rig workers are missing, presumed dead after the accident.
----The size of underwater robots range from as small as a lunch box to as big as a pickup truck and trailer, said Craig Dawe, technical support manager for the Monterey Bay Aquarium Research Institute, who has worked with the remote-controlled machines for the past 17 years.
It may be easier to work in outer space than in the deep water surrounding the spill site, said Scott Kopsick, technical sales manager at Houston-based Perry Slingsby Systems, a maker of the remote-operated vehicles.
More.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ar6m5Xjjf9aA&pos=9
We end on the oil spill for today with a little more news on the failed blowout preventer. Part of plan B is to “stab” another BOP on top of the one that failed. I’m no expert, but that sounds a very high risk manoeuvre for an oil well that’s under unanticipated great pressure.
“It's bad luck to leave a house through a different door than the one used to come into it.”
Horizon crew tried to activate BOP
MMS 'SWAT teams' target deep-water BOPs
A "SWAT team" of US minerals Management Services (MMS) inspectors are checking blowout preventers (BOP) across the Gulf today following reports that the crew of the Deepwater Horizon unsuccessfully tried to activate the BOP before evacuating.
Noah Brenner, Anthony Guegel, Anthea Pitt & Rob Watts 29 April 2010 20:26 GMT
BP chief operating officer Doug Suttles said interviews with Transocean workers on the rig revealed crewmembers tried to activate the BOP from the rig's bridge before the fire forced them to evacuate, but the BOP did not close off the well.
Suttles also revealed that BP remotely-operated vehicles (ROVs) had hit "subsea access points" that should close the BOP, but that they also failed to trigger the mechanism to shut.
"We don't know why the BOP failed to stop the flow," he said. "Ultimately we will recover the BOP, get it to the surface and find out."
"I'm sure Transocean, who actually owned blowout preventer, will be interested to find out why it didn't work," Suttles said.
An MMS official estimated that the SWAT teams would have all the Gulf's offshore drilling units inspected in the next seven days.
After that, the regulator would turn its attention to production platforms at the order of US Interior Secretary Ken Salazar.
“A rabbit's foot will bring luck and protect the owner from evil spirits if carried in the pocket.”
At the Comex silver depositories Monday, final figures were: Registered 50.73 Moz, Eligible 64.21 Moz, Total 114.94 Moz.
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Crooks & Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
No crooks in the conventional sense this morning, just a long article by Der Spiegel on the crooked end of the fiat Euro project. Fiat currency has brought the world to the edge of a great depression. The next Lehman, whether great vampire squid or another European PIIG or a collapse in Asia, takes us there. Stay long gold and silver, as Der Spiegel asks, “who rescues the rescuers.”
Below that, the ECB sets itself up to be the big loser if Greece is forced to default anyway, next year or the year after. I hope the ECB’s crystal ball is clearer than mine about what happens next.
“Knock three times on wood after mentioning good fortune so evil spirits won't ruin it.”
Huge National Debts Could Push Euro Zone into Bankruptcy
05/03/2010
Greece is only the beginning. The world's leading economies have long lived beyond their means, and the financial crisis caused government debt to swell dramatically. Now the bill is coming due, but not all countries will be able to pay it. By SPIEGEL staff.
Savvas Robolis is one of Greece's most distinguished economics professors. He advises cabinet ministers and union bosses. He is also a successful author and a frequent guest on the country's highest-rated talk shows. But for several days now, it has been clear to Robolis, 64, the elder statesman of Greece's left-wing academia, that he no longer has any influence.
His opposite number, Poul Thomsen, the Danish chief negotiator for the International Monetary Fund (IMF), is currently something of a chief debt inspector in the virtually bankrupt Mediterranean country. He recently took three-quarters of an hour to meet with Robolis and Giannis Panagopoulos, the president of the powerful trade union confederation GSEE. At 9 a.m. on Tuesday of last week, the men met behind closed doors in a conference room in the basement of the Grande Bretagne, a luxury hotel in Athens. The mood, says Robolis, was "icy."
Robolis told the IMF negotiator that radical wage cuts would be toxic for Greece's already comatose economy. He said that the Greeks, given their weak competitive position, primarily needed innovation and investment, and that a one-sided fixation on cleaning up the national budget would destroy the last vestiges of economic strength in Greece. The IMF, according to Robolis, could not make the same mistake as it did in Argentina in the early 1990s. "Don't put Greece on ice!" the professor warned.
But the tall Dane was not very impressed. He has negotiated aid packages with Iceland, Ukraine and Romania in the past, and when he and his 20-member delegation landed in Athens on April 18, they had come to impose a rigorous austerity program on the Greeks, not to devise long-term growth programs.
Thomsen's mandate is to save the euro zone. And any Greek resistance is futile.
-----If the emergency surgery isn't successful, there will be much more at stake than the fate of the euro. Indeed, Europe could begin to erode politically as a result. The historic project of a united continent, promoted by an entire generation of politicians, could suffer irreparable damage, and European integration would suffer a serious setback -- perhaps even permanently.
And the global financial world would be faced with a new Lehman Brothers, the American investment bank that collapsed in September 2008, taking the global economy to the brink of the abyss. It was only through massive government bailout packages that a collapse of the entire financial system was averted at the time.
A similar scenario could unfold once again, except that this time it would be happening at a higher level, on the meta-level of exorbitant government debt.
-----European governments agree that saving Greece is imperative. They are worried about the euro, and the Germans are concerned about their banks, which, lured by the prospect of high returns, have become saturated with government bonds from Greece and other southern European countries. They are also terrified that after a Greek bankruptcy, other weak euro countries could be attacked by speculators and forced to their knees.
There are, in fact, striking similarities to the Lehman bankruptcy. This isn't exactly surprising. The financial crisis isn't over by a long shot, but has only entered a new phase. Today, the world is no longer threatened by the debts of banks but by the debts of governments, including debts which were run up rescuing banks just a year ago.
The banking crisis has turned into a crisis of entire nations, and the subprime mortgage bubble into a government debt bubble. This is why precisely the same questions are being asked today, now that entire countries are at risk of collapse, as were being asked in the fall of 2008 when the banks were on the brink: How can the calamity be prevented without laying the ground for an even bigger disaster? Can a crisis based on debt be solved with even more debt? And who will actually rescue the rescuers in the end, the ones who overreached?
more
http://www.spiegel.de/international/europe/0,1518,692666,00.html#ref=nlint
ECB Comes to Greece’s Aid by Waiving Collateral Rules
May 3 (Bloomberg) -- The European Central Bank joined the international rescue of Greece, saying it would indefinitely accept the country’s debt as collateral regardless of its country’s credit rating, underpinning gains in the bond market.
The decision came less than a day after Greece agreed to a 110 billion-euro ($145 billion) package of emergency loans from the International Monetary Fund and its euro-region allies. Under the plan backed by the ECB, Greece pledged 30 billion euros in budget cuts to bring a deficit of 13.6 percent of gross domestic product within the EU limit of 3 percent in 2014.
“The ECB is a key player in the rescue package designed to help Greece and it is clearly buying insurance against the likelihood of further multiple downgrades of the Greek debt, something that might lead to a halt of ECB financing to the Greek banks,” said Silvio Peruzzo, an economist at Royal Bank of Scotland Group Plc in London.
Further downgrades from credit-rating companies had threatened to render Greek bonds ineligible for collateral for ECB loans after Standard & Poor’s last week cut the nation to junk status. Had Moody’s Investors Service and Fitch Ratings followed suit, Greece’s debt would have no longer been accepted under the previous rules, threatening to inflict further pain on the economy and its banks.
-----The ECB’s Governing Council said Greece’s commitment to the terms of the bailout was “appropriate,” the Frankfurt-based bank said in an e-mailed statement. “This positive assessment and the strong commitment of the Greek government to fully implement the program are the basis, also from a risk management perspective, for this suspension.”
Today’s decision was a reversal for ECB President Jean- Claude Trichet, who began the year saying the ECB would not change its “collateral policy for the sake of any particular country.”
That prompted Christoph Rieger, co-head of fixed-income strategy at Commerzbank AG in Frankfurt, to say today’s announcement “leaves a sour taste with regards to the ECB’s long-term credibility.”
http://www.bloomberg.com/apps/news?pid=20602007&sid=aTAygysllnxM
“A mirror should be covered during a thunderstorm because it attracts lightning.”
Why A UK Hung Parliament is Likely. Stay long precious Metals.
http://www.ukpollingreport.co.uk/blog/
The monthly Coppock Indicators finished April:
DJIA: +245 UP. NASDAQ: +448 UP. SP500: +276 UP. The great Bull market goes on with the all three continuing higher in positive numbers.
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