"We need only take our heads out of the sand to see clearly that interventionism not only has failed to provide the promised something-for-nothing, but has led to all sorts of undesirable consequences. Indeed, many are just beginning to realize that we are moving towards disaster even though we have been on a wrong heading for decades."
Leonard Read
With not much news from BP yesterday, as far as I could tell from BP’s video feeds,
the gushing blown-out oil well just keeps spewing masses of oil and gas into the Gulf of Mexico, we will have to wait another day to see if things get any better once BP’s deep sea robots get around to closing some of the deliberately open valves. Still, all the anti-BP media and political venom, currently around lead by President Obama, risks getting someone killed or injured. Whatever happened to rule of law, compensation for provable damage, properly accounted for, as provided under existing law. Isn’t it fair to also ask why States with massive oil and gas drilling off their coasts, hadn’t made response provision for a foreseeable oil leak? Hadn’t made financial provision from the good years to be in position to offer State assistance via tax rebates, emergency loans, etc to any of their citizens that might be affected by any oil leak. Hadn’t put in place emergency clean up activation plans. I suspect hard truths are the last thing politicians and mass media want to hear.
It is a good rule in life never to apologize. The right sort of people do not want apologies, and the wrong sort take a mean advantage of them.
P. G. Wodehouse.
Why We Hate Oil Companies: Former Shell President Counts the Ways
Posted Jun 04, 2010 01:56pm EDT by Peter Gorenstein in Clean Tech, Politics
It's safe to say the BP oil spill in the Gulf of Mexico isn't winning the company or the oil industry any fans. Goldman Sachs' business practices look downright cuddly compared to BP's handling of the catastrophic disaster off the coast of Louisiana.
The animosity towards Big Oil is nothing new and the subject of Why We Hate the Oil Companies, recent book from former Shell Oil president John Hofmeister, who says there are lots of reasons oil companies are almost uniformly disliked.
First is a matter of bad public relations. "The industry does a miserably poor job of explaining who it is and what it does, to the American people," says Hofmeister, who retired from Shell in 2008. This is recently exemplified by several gaffes made by BP CEO Tony Hayward.
The government is the other major reason we hate oil companies, he claims. Absent of a comprehensive energy policy, when things go wrong, “fingers are always pointed at the nasty oil companies,” says Hofmeister. "So our own political leadership has taught us to hate the oil companies."
$6 to $8 Gas? Prices Will "Skyrocket" If U.S. Stops Drilling, Says Former Shell Exec
Posted Jun 04, 2010 12:49pm EDT by Heesun Wee
Oily tar balls hit the sands of the Florida Panhandle Friday even as BP engineers adjusted a sophisticated cap over the Gulf of Mexico oil spill. The containment cap is the latest attempt to plug the worst oil spill in U.S. history, triggered when the Deepwater Horizon rig exploded April 20, killing 11 people.
Whenever the spill is eventually contained, and the best estimates are still in the "months" category, the BP disaster has major implications for the environment, America's energy policy, and consumers.
----- The BP disaster has raised questions about halting risky, domestic oil extraction procedures altogether, including deep-water programs. But Hofmeister -- a longtime advocate of more domestic drilling -- says Americans simply can't afford to stop drilling. (America's net imports of foreign oil have jumped to 58.2 percent in 2007 from 34.8 percent in 1973, accoding to the latest annual figures from the U.S. govermment.)
----- The BP disaster has raised questions about halting risky, domestic oil extraction procedures altogether, including deep-water programs. But Hofmeister -- a longtime advocate of more domestic drilling -- says Americans simply can't afford to stop drilling. (America's net imports of foreign oil have jumped to 58.2 percent in 2007 from 34.8 percent in 1973, accoding to the latest annual figures from the U.S. govermment.)
Below, we leave it to a real expert to comment on last Friday’s very scary US Employment report. I think that the US economy, just like the EU economy will double dip into recession in the second half of 2010. In effect, several trillion dollars worth of unprecedented global money creation and stimulation since October 2008, resulted in one of the weakest, if not the weakest, global economic recovery especially among the G-7. Below, John Liscio’s excellent Liscio Report covers the salient features.
US Employment Report.
"While total employment grew by 431,000, 95% of the gain came from temporary Census workers. Private employment rose just 41,000, and aside from the Census workers, government employment was off by 21,000 (down 15,000 state and 7,000 local - federal employment ex-Census rose by 1,000). Construction employment fell by 35,000, with all subsectors clocking losses, including heavy/civil – where's the stimulus spending? Manufacturing rose by 29,000, the sector's fifth consecutive gain. Private services added just 37,000. Gainers included transportation, up 11,000; professional and business services, up 22,000 (though that was more than accounted for by the temp sector's 31,000 – most of its other subsectors fell); health care, up just 8,000 (less than half its recent average); and leisure and hospitality, barely positive at 2,000. A number of major sectors fell, with retail off 7,000 and finance off 12,000. Over the last five months, manufacturing has gained 126,000 and finance has lost 58,000; we haven't seen a gap in favor of manufacturing that wide between the two sectors since 1994."
http://www.theliscioreport.com/
Next, Hungary is not the next Greece, now say the Hungarians, amazed that no one saw the funny side on their Friday joke on European Banksters and Bilderbergers. “We’re not going to default, honest we’re not. Keep buying the forints and dodgy bonds.”
“Never believe anything in politics until it has been officially denied.”
Otto Von Bismarck.
Hungary Backtracks on Talk About Default
By THE ASSOCIATED PRESS Published: June 5, 2010
BUDAPEST, Hungary (AP) -- Hungary's government on Saturday tried to calm investors and distanced itself from earlier comments by officials claiming that the country was close to defaulting on its debts.
State Secretary Mihaly Varga, a former finance minister, described talk of a default ''exaggerated ... and unfortunate,'' adding that the new, center-right government of the Fidesz party was committed to the 2010 budget deficit of 3.8 percent of GDP set by the previous administration even if ''immediate and urgent'' steps were needed to achieve it.
''The situation is consolidated and the planned budget deficit can be met,'' Varga said, adding that declarations putting Hungary in the same group as Greece or other countries struggling with huge deficits ''do not give a credible view of Hungary's status.''
Statements Thursday and Friday from several Fidesz and government officials, which compared Hungary's situation with that of Greece and raised the possibility of a budget gap twice as big as planned, shocked financial markets and were seen as one of the reasons the euro fell to four-year lows, while the Hungarian forint fell around 5 percent and the Budapest Stock Exchange ended Friday 3.3 percent lower on the day.
Analysts seemed perplexed by the chilling comments and European officials also sought to allay market fears that Hungary was on the edge of insolvency.
''Hungary has made serious progress in consolidating its public finances over the last couple of years,'' Olli Rehn, Europe's commissioner for economic and monetary affairs, told reporters after a meeting of the Group of 20 in South Korea on Saturday. Any talk of a risk of default ''is widely exaggerated,'' he said.
Next, a sick Greek joke. As announced last week, Greece is looking for buyers of loss making railways, and minority stakes in the Greek Post Office and two water companies. Whatever happens, the Greek “government” will retain a 51% stake in all. Any billionaires out there, tired of tipping cash into a bottomless pit called the English Premier football league, are invited to consider doing the same in much a warmer climate with similar temperamental, overpaid, under talented hired help, but without the upside of the occasional free ticket to a Champions League game. Alternatively, they might just hire me for a fraction of the loss to suggest suitable mining stocks in precious metals and rare earths.
“Well, fancy giving money to the Government! Might as well have put it down the drain.”
A.P. Herbert.
Greece to sell stakes in railways, utilities
Cash-strapped Greece to sell off state ownership in railways, utilities to plug debt gap
Wednesday June 2, 2010, 11:33 am EDT
ATHENS, Greece (AP) -- Greece's cash-strapped government will sell off stakes in a string of state-owned companies -- including a rail operator, two water companies, the Post Office and several casinos -- to pay off debt, officials said Wednesday.
Finance Minister George Papaconstantinou said the rail company is losing euro1 billion ($1.2 billion) a year and that routes causing the greatest financial losses will be scrapped.
Greece narrowly avoided defaulting on its huge debt burden last month, after European countries and the International Monetary Fund cobbled together a euro110 billion ($134.4 billion) rescue package. In exchange, the center-left government agreed on extensive pension and salary cuts -- combined with consumer tax hikes -- meant to cut the budget deficit from 13.9 percent of annual output to 2.6 percent in 2014.
Papaconstantinou and other ministers did not say when the sales are scheduled and how much money they plan to raise. But Greece has said it wants to raise euro1 billion per year between 2011-13 through privatization projects -- under commitments made to receive the rescue loans.
-----Under the planned sell-off announced Wednesday, Greece will sell a 49 percent stake in rail operator Trenose and yield management control. It will also reform the broader Hellenic Railways group, which has accumulated debts of some euro10 billion and runs daily losses of close to euro3 million.
"Clearly this situation with the railways cannot be allowed to continue," Public Works and Transport Minister Dimitris Reppas said.
He said the government would reevaluate Hellenic Railways workers' skills, keep those who were needed and transfer others to different public sector jobs -- as Greek law forbids the sacking of civil servants.
The government will also sell a 10 percent stake in the greater Athens water company and a 23 percent stake in the water company in Greece's second largest city, Thessaloniki.
Papaconstantinou said the state would sell 39 percent of the country's Post Office. The state will retain a 51 percent stake in all the companies named Wednesday in the privatization bid, and proposes to fully privatize a string of state-owned casinos.
The government also intends to catalogue and evaluate its extensive real estate assets, with a view to development.
http://finance.yahoo.com/news/Greece-to-sell-stakes-in-apf-1063932023.html?x=0&.v=3
More tomorrow, but first this. Euros anyone?
"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."
William F. Rickenbacker
Euro 'will be dead in five years'
The euro will have broken up before the end of this Parliamentary term, according to the bulk of economists taking part in a wide-ranging economic survey for The Sunday Telegraph.
By Edmund Conway Published: 10:23PM BST 05 Jun 2010
The single currency is in its death throes and may not survive in its current membership for a week, let alone the next five years, according to a selection of responses to the survey – the first major wide-ranging litmus test of economic opinion in the City since the election. The findings underline suspicions that the new Chancellor, George Osborne, will have to firefight a full-blown crisis in Britain's biggest trading partner in his first years in office.
Of the 25 leading City economists who took part in the Telegraph survey, 12 predicted that the euro would not survive in its current form this Parliamentary term, compared with eight who suspected it would. Five declared themselves undecided.
http://www.telegraph.co.uk/finance/financetopics/budget/7806064/Euro-will-be-dead-in-five-years.html
Stay long precious metals.
GI.
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