Baltic Dry Index. 1709 -81 (Down 59.3% since May 26.)
LIR Gold Target by 2019: $3,000.
'St. Swithin's day if thou dost rain
For forty days it will remain
St. Swithin's day if thou be fair
For forty days 'twill rain nae mair.
July 15th. That’ll be rain then.
Today we focus on the sorry state of Europe, or more correctly, the sorry states of Europe lead by Club Med’s Spain. But first this latest news from China. Even on the official figures China is clearly slowing. What does the shipping industry know that the Fed and their Wall Street cronies don’t? At last night’s closing value of 1709, the Baltic Dry Index is now just two and a half times its post Lehman Brothers crash lows.
“Poverty is not socialism. To be rich is glorious.”
Deng Qiaopeng
China's economy and inflation cooling, data show
July 14, 2010, 10:56 p.m. EDT
HONG KONG (MarketWatch) -- China reported a slowdown in second-quarter gross domestic product growth, as well as in a number of other economic indicators for June on Thursday, indicating the nation's rapid expansion was beginning to cool as Beijing withdrew some expansionary policies.
The annualized first-half GDP growth came in at 11.1% higher than in the same period a year ago, but slower than the 11.9% annual growth recorded in the first quarter. The size of the nation's economy grew to 17.284 trillion yuan ($2.553 trillion) as a result, according to the National Bureau of Statistics of China.
Second-quarter GDP data wasn't immediately available, though Reuters and Dow Jones Newswires put the figure at 10.3%. That's lower than the 10.5% expansion estimated by economists surveyed by FactSet Research.
The country's consumer price index for June increased 2.9%, while its producer price index expanded 6.4% from the year-earlier month. Both measures fell below economists' expectations for 3.3% and 6.8%, according to a Dow Jones Newswires survey.
In May, China's consumer and producer prices rose 3.1% and 7.1%, respectively.
June retail sales grew 18.3% and monthly industrial production expanded 13.7%, also slowing from May and dropping below estimates. China's May retail sales had expanded 18.7% while the nation's industrial production grew 16.5%.
http://www.marketwatch.com/story/chinas-economy-and-inflation-cooling-data-show-2010-07-14
Now back to the sclerotic bureaucratic states of Europe, home of 3 EU Presidents and Baroness Whatsit, dodgy accounts that the auditors can’t make heads nor tails of and a dodgy fiat currency that everyone knows is going to fail once the Germans tire of paying for Club Med’s lifestyle. Home to more useless Commissioners and flunkies than BP has beach remediation workers. Below, the big “S” of the European PIGS.
Spanish Banks Boost ECB Borrowing to Record in June
July 14 (Bloomberg) -- Spanish banks borrowed a record 126.3 billion euros ($161 billion) from the European Central Bank in June as investors shun the debt-ridden nation’s lenders.
Spanish banks increased borrowing 48 percent from 85.6 billion euros in May, according to daily averages compiled by the Bank of Spain. That compares with a drop of 4 percent to 496.6 billion euros provided to lenders by the ECB in the whole euro area.
The southern European country’s banks haven’t sold any bonds publicly in the past two months amid investor concerns about the country’s ability to cut its deficit without hurting the economy. The yield on 10-year Spanish government debt relative to benchmark German bonds has more than tripled to 200 basis points since the start of the year. A basis point is 0.01 percentage point.
“The pressure for Spanish banks will keep rising as they can’t raise cash in the bond markets at reasonable prices,” said Thomas Nyegaard, a London-based analyst at F&C Investments, where he helps manage 4 billion euros of assets including Spanish bank debt. “The lenders can hardly provide any new lending under these conditions.”
The cost of insuring against losses on Spanish sovereign debt rose five basis points to 213 basis points in the credit- default swap market, according to data provider CMA. The contracts rose as high as 274 basis points in May.
The country’s lenders are increasing their dependence on the ECB as the European Union starts to examine banks’ resilience to losses after the debt crisis pummeled the bonds of Spain, Greece and Portugal. Europe’s deficit woes sparked concern about banks’ losses from sovereign debt holdings on top of the 438 billion euros already written down since the start of the global credit crisis in 2007.
http://noir.bloomberg.com/apps/news?pid=20601085&sid=aUMqxvUBVV8I
Spain 'relying on short-term funding' as councils go bust
A third of Spain's city councils are in dire straits and may be forced to suspend payments by the end of the year, replicating the woes in the US, where many states are bearing the brunt of fiscal tightening.
By Ambrose Evans-Pritchard, International Business Editor
Published: 9:59PM BST 13 Jul 2010
The great majority of councils in Andalucia are already in deep crisis – either insolvent or muddling through from day to day. More than 400 of the 8,000 councils across the country have stopped paying electricity, water and telephone bills, according to Spanish newspaper El Economista.
"I am deeply ashamed to know that I won't be able to pay our staff. They have got mortgages, children. What am I supposed to do?" said Jesus Manuel Ampero, mayor of Cenicientos, near Madrid. "We were not able to cover our payroll in June. Neither I nor our councillors have received anything for two years. I've had two heart attacks. My health is cracking. If we cannot solve this, I'm resigning."
Spain's federation of regional governments said councils were heading for slow "asphyxiation", with many facing a payroll cut-off next month. Pedro Arahuetes, mayor of Segovia and head of the federation's finance committee, told The Daily Telegraph that councils had lost up to 30pc of tax revenues because of the property and construction crash, and a further 20pc in funding cuts by Madrid.
The body has called for a moratorium until 2012 on debts to central government, which is itself slashing wages by 5pc as a quid pro quo for backing from the EU's €750bn (£626bn) rescue.
Council debt is just 3pc of Spanish GDP, so default risk is modest. The greater worry is political as Spain's depression grinds on. The latest Consenso Económico survey forecasts that GDP will contract by 0.8pc this year, with zero growth next year. Unemployment is already 19.9pc. The lesson of the early 1930s is that once slumps last much beyond two years they start to engender serious social tension.
------Analysts are split on the country's prospects. Goldman Sachs and Morgan Stanley say the economy is starting to turn the corner. Spain's €6bn bond auction last week drew large bids from Asian investors, including China's foreign exchange fund SAFE – a powerful stamp of approval.
However, RBS warned in a new report – Stress Testing Spain – that the country is caught in an "unstable equilibrium", relying on short-term funding from the European Central Bank to keep rolling over debts.
RBS said Spanish banks need to raise €50bn in fresh capital to weather the crisis under its soft test and €90bn under a severe test.
This is regardless of the EU stress tests, which may limit "haircut" simulations on Club Med debt to the trading buckets of banks rather than their much larger investment portfolios – rendering the exercise pointless.
Jacques Cailloux, the report's lead author, said a severe haircut of 30pc on all such bonds would lead to losses of €400bn for Spain (40pc of GDP) and €1.3 trillion for the rest of the eurozone (15pc of GDP). It may require "overwhelming policy intervention" by the EU in good time to prevent such a catastrophic chain of events.
In Euroland’s top economy, a lame duck government just got lamer. Below, Chancellor Merkel life just got a whole lot more complicated when it comes to defying the voters and bailing out Club Med. For the foreseeable future, Europe lacks a strong government anywhere.
Who do I call when I want to call Europe?
Van Rompuy, Sir.
Who?
With apologies to Henry K.
Blow for Merkel as Key State Elects Center-Left Government
07/14/2010
In a further setback for Chancellor Angela Merkel's center-right coalition, power in Germany's most populous state, North Rhine-Westphalia, shifted to the center-left on Wednesday. The state assembly elected Social Democrat Hannelore Kraft as regional governor at the head of minority government.
The center-left Social Democrats (SPD) and Greens took control of Germany's most populous state on Wednesday with the election of a minority government in North Rhine-Wesphalia that spells further trouble for Chancellor Angela Merkel.
The state -- Germany's most-populous, with some 18 million people -- had been ruled since 2005 by a center-right coalition of Merkel's conservative Christian Democrats and the pro-business Free Democrats headed by former Governor Jürgen Rüttgers, but it lost its majority in a regional election on May 9 and failed to build a workable coalition after weeks of negotiations with other parties.
------Wednesday's vote has deprived Merkel's center-right alliance in Berlin of a majority in the Bundesrat, the upper legislative chamber in which Germany's 16 states are represented, and will make it harder for her to get some legislation through.
The defeat of the CDU in the North Rhine-Westphalia election was a sign of growing public disenchantment with Merkel's government, which has been riven by in-fighting and suffered a series of setbacks since she won re-election last September.
Wednesday's parliamentary vote in North Rhine-Westphalia, home to the industrial Ruhr region and the cities of Cologne and Düsseldorf, has fuelled speculation that the center-left may try to form a minority government at the national level, tolerated by the Left Party, after the next general election in 2013.
SPD leader Sigmar Gabriel declined to rule out the option. In an interview published in Bild am Sonntag newspaper on Sunday, he said: "Such minority governments which work well together are better than governments that have a numerical majority but can't agree on anything. The best example of that is the current government."
However, Gabriel's statements drew fire from all other parties including the Greens. Renate Künast, the co-leader of the Greens in the Bundestag , Germany's federal parliament, dismissed the idea. "The heat must have gotten to him," she said. No federal government has ever started without a majority and Germans are fearful of such unstable governments.
http://www.spiegel.de/international/germany/0,1518,706532,00.html#ref=nlint
Up next, the 4 “Bs”. Blair and Brown’s bankrupt Britain. Pounds anyone? Stay long precious metals. Perfidious Albion is going to do everything in its power to devalue and inflate away as much of its unrepayable debt as possible. For the record, of course, Britain’s politicians, corrupt central banksters, and any civil servant wanting to hold on to their over generous pension pot, will swear black is white that they won’t.
But if, as we now read, the then prime minister, Tony Blair, declared that his chancellor, Gordon Brown, was "mad, bad and dangerous," might he not have considered it his duty to ensure that such an individual did not remain as chancellor, let alone get hold of the keys to Number Ten?
WSJ. 15/7/2010
Part-time workforce at record levels
The part-time workforce has reached record levels in the three months to May as people struggled to find permanent jobs in the recession, official figures showed.
Published: 10:13AM BST 14 Jul 2010
At the same time, long-term unemployment - those out of work for more than a year - grew nearly 50pc to a 13-year high of 787,000, Office for National Statistics data shows.
Part-timers rose by 148,000 over the quarterly rise to 7.82 million, the highest level since records began in 1992. The number of full-time employees is now 18.2m.
The ONS said that a record 27pc of the total workforce was now in part-time employment, with the category accounting for the vast majority of the 160,000 rise in total employment - the biggest quarterly jump since August 2006.
Long-term unemployed rose by 61,000 over the quarter and is now up 47.5pc compared with the same quarter last year.
The figures overshadowed a 34,000 fall in unemployment to 2.47 million in the three months to May and a fifth successive fall in the claimant count, which was down by 20,800 to 1.46 million in June.
The number of economically inactive workers - which hit record levels in the quarter to April - edged down by 0.2pc to 8.1 million. This is the first fall in this category since March last year.
But those classing themselves as "long-term sick" reached 2.04 million, the highest level since March
http://www.telegraph.co.uk/finance/economics/7889389/Part-time-workforce-at-record-levels.html
Britain’s debt: The untold story
By Sean O'Grady, Economics Editor Wednesday, 14 July 2010
The true scale of Britain's national indebtedness was laid bare by the Office for National Statistics yesterday: almost £4 trillion, or £4,000bn, about four times higher than previously acknowledged.
It quantifies the burden that will be placed on future generations, and it is the ONS's first attempt to draw together the "off-balance-sheet" liabilities that have been accumulated by the state. The figures imply a huge "intergenerational transfer" – broadly in favour of today's "baby boomer" generation at the expense of younger people and future generations.
The debt primarily consists of the cost of public sector and state pensions, and of payments promised to private contractors under private finance initiatives. It far exceeds any of the figures so far published for the national debt, the largest current estimate for which is £903bn. That is projected to rise to £1.3trn by 2015.
------The ONS itemised the public sector's main liabilities as:
* Future payments for the state old age pension: £1.1trn to £1.4trn
* Unfunded public sector pensions for teachers, NHS staff and civil servants: £770bn to £1.2trn
* Payments under private finance initiative contracts: £200bn
* Contingent liabilities (eg bank deposit guarantees): £500bn
* Nuclear power plant decommissioning: £45bn
* Impact of financial sector interventions: £1trn to £1.5trn
Leaving aside the possibility of another financial meltdown that would leave the taxpayer with the liabilities of a substantial part of the banking system, the figures suggest that the realistic total liabilities of the public sector could be as much as £3.8trn (£3,800,000,000,000).
-----In research published alongside the ONS data, the National Institute of Economic and Social Research (NIESR) said that current taxpayers ought to be paying around 30 per cent more in tax to relieve future generations of that "unfair" burden. That also takes account of the additional health needs of the baby boomers as they reach their autumn years.
Failure to cut back now or raise taxes – and there is little sign of the population clamouring to make life easier for the as-yet-unborn – will leave future taxpayers with an additional burden of £200,000 each over their lifetimes to pay for the public services enjoyed by this and previous generations. Even with current plans to reduce the deficit, the tax bill would still be as high as £150,000 over the life of someone born in 2011.
http://www.independent.co.uk/news/uk/politics/britainrsquos-debt-the-untold-story-2025979.html
Over on the other side of Europe, it’s Poland joining the micro states in economic distress. Below Bloomberg covers yesterdays bad news from the Bug.
Polish Bond Draws Fewest Bids in 10 Months on Faster Inflation
July 14 (Bloomberg) -- Poland’s sale of five-year bonds attracted the lowest investor demand in 10 months after an unexpected acceleration of inflation fueled speculation the central bank will increase borrowing costs.
The government sold 2.03 billion zloty ($635 million) of the fixed-coupon security due in April 2015, according to the Finance Ministry’s Bloomberg page. Bids totaled 2.81 billion zloty, compared with 1.5 billion to 3 billion zloty offered by the ministry. That was the lowest auction demand for Polish five-year debt since the Sept. 9 offering of April 2014 paper.
The consumer price index rose 2.3 percent in June from the same month a year earlier, compared with a 2.2 percent inflation rate in May, the statistics office in Warsaw said yesterday. The median forecast of economists and a July 1 estimate by the Finance Ministry were both for inflation to slow to 2.1 percent.
“The higher-than-expected June CPI released yesterday is likely to intensify rate-hike speculations, which could dampen interest in Polish bonds for now,” Societe Generale SA analyst Esther Law in London wrote in a report before today’s auction.
The average yield at today’s auction rose to 5.37 percent from 5.14 percent on May 12, according to the ministry. The five-year bonds dropped after the auction, sending the yield up five basis points to 5.41 percent as of 1:42 p.m. in Warsaw.
http://noir.bloomberg.com/apps/news?pid=20601095&sid=a4hyitm63nR0
Below, the European “government” at its bungling bureaucratic best. Long suffering German and British taxpayers will just have to work harder for longer to keep paying for the Brussels way of life. Three EU Presidents and counting, how unlucky can a European taxpayer get?
"The most puzzling development in politics during the last decade is the apparent determination of Western European leaders to re-create the Soviet Union in Western Europe."
Mikhail Gorbachev
JULY 14, 2010, 11:15 P.M. ET
EU's Rocky Regulatory Road
Just a week ago, the European Parliament was clear: the three new European supervisory authorities it plans to establish to oversee the financial markets should all be based in Frankfurt. It was important, claimed the parliament, that the three should be in the same place "to ease interaction between the ESAs."
Never mind that this is an age when internet communication across continents is constant; when video-conferencing has reached a level of sophistication that can make thousands of miles vanish into inches, physical proximity was what the parliament demanded. Perhaps this attitude should not be surprising, since this is an institution which makes a monthly trek, at huge expense, from Brussels to Strasbourg.
The MEPs, however, are being overruled. At this week's Ecofin meeting of European finance ministers, U.K. Chancellor George Osborne won support for his argument that one of the three, the European Banking Authority, should be located in London. He had logic on his side, since London is Europe's largest financial centre and the Committee of Banking Supervisors, for which the EBA is a beefed up replacement, is currently based there.
Logic, however, is not the force that always prevails in the horse trading that goes on as legislation winds its way through the myriad corridors of Brussels. The last faint hopes of getting an agreement over the final shape of the three institutions—the other two will cover securities and markets and the insurance sector —before the summer break were finally dashed Wednesday. The parliament and EU finance ministers could not agree on the extent of the powers to be given to the new bodies. Not surprisingly, the parliament wants them to have more, the finance ministers less.
That financial supervision failed in most of Europe is unarguably the case. The parliament's position is that "the only option for effective financial supervision is one based on a thorough reform of the current system, with the establishment of European authorities capable of taking effective action to avert crises and avoid taxpayer bailouts."
Yet national authorities are being strengthened to give them the power and duty to do just that. To what extent should the new EU bodies be able to interfere with their efforts? That is the area of contention it will be hard to thrash out, even after a summer break to allow tempers to cool. In the U.K., for instance, the government is clear that the new EU regulators should not be able to overrule the current Financial Services Authority or the new regulatory regime being established under the auspices of the Bank of England.
The EU Parliament, though, wants the new bodies to be able to dictate directly to individual financial institutions where it deems a national regulator to be failing. It also wants them to have direct powers concerning important cross-border financial institutions.
National regulators warm to neither proposition. However, they do recognize that there is a potentially major problem with cross-border institutions. Banks have varying structures, inspired by various considerations, not least taxation. If their operations in a particular jurisdiction are merely deemed branches, then the national regulator's powers are limited. And as has been seen in instances such as the collapse of the Bank of Credit & Commerce, a bank that has a prime regulator elsewhere can inflict significant damage in a market place. So where there is an operation of any significance, as many "branches" in the City are, then the regulator wants their status to be changed to that of subsidiary. There are already negotiations under way as to how far and how fast such changes can be affected.
Back in Brussels, once the MEPs return from their summer break, the negotiations will resume. Behind the scenes, these are likely to take the line of "If you want the European regulator and all those jobs in your country, then how much power are you prepared to give it?"
Below, Portugal shows the future for Club Med, suggests the Journal. Portugal like Greece, will eventually figure out that they are far better off outside the Germanic Euro than in it. Unfortunately for the hapless Ports, everything else will be tried first before events make the inevitable obvious.
JULY 14, 2010
Portugal Feels Austerity's Bite
After Years of Budget Cuts, Its Economy Isn't Healed; Scenario for Others in Europe
BRAGA, Portugal—Indebted European countries from Greece and Italy to Spain have in recent weeks set off down a common path toward fiscal recovery, promising to slash spending and raise taxes.
One sobering scenario of what they may be up against comes from Europe's southwestern edge: Portugal, which embarked a decade ago on a similar journey of austerity, higher taxes and intermittent spending cuts, is still cutting—and still struggling.
On Tuesday, Moody's Investors Service cut Portugal's sovereign debt rating by two notches, to A1, citing the country's sluggish growth prospects and concerns that economic reforms in areas like labor markets won't bear fruit.
Moody's "remains concerned about the economy's medium-term growth potential," said Anthony Thomas, senior analyst at the rating agency, adding that Portugal's government debt, as a percentage of gross domestic product, has risen rapidly in the past two years.
The experience of Portugal—an early beneficiary of the euro zone's economic benefits and one of the earliest to experience the problems of being tied to a common currency—offers what some economists call a blueprint for what could be a long road to recovery for Spain, Greece and others.
"You have to be prepared that you are in for stagnant times," says Antonio de Sousa, who was Portugal's central banker in the late 1990s when the euro was created.
---- Meanwhile, after Portugal adopted the euro in 1999, its dominant textiles industry wasn't able to use cheaper loans and a large common market to build a foundation for longer-term growth. Portugal's textiles were too expensive to compete with cheaper goods from China or Eastern Europe, but also lacked the high-fashion credentials of those from France or Italy.
Portugal's deficit soon exceeded the zone's limit. In 2002 it became the first euro-zone member to be slapped with an excessive-deficit warning.
At a time when Spain, Ireland and Greece were sailing through the early years of the euro on housing bubbles and debt-fueled spending, Portugal began to retrench.
Lisbon went through modest austerity drives every few years beginning in the early 2000s. These included civil-service wage freezes and increases in value-added taxes that further weighed on the economy. When that wasn't sufficient, Lisbon also pushed through pension changes, including greater penalties for early retirement.
Portuguese voters tired of the measures, leading to political upheaval. The country had four prime ministers from 2001 to 2005.
Many economists say the cuts haven't gone far enough.
Government spending still accounts for more than half of Portugal's GDP. Portugal's budget deficit last year, at 9.4% of GDP, is lower than those of Greece, Ireland or Spain, but still more than three times as high as euro-zone rules permit.
---- Portugal's central bank on Tuesday raised its growth forecast for 2010 but cut its 2011 forecast to 0.2% from 0.8%, citing deficit-reduction efforts and an ailing labor market.
"If Portugal is a blueprint, we have to look for several years of underperformance in Spain," says Ralph Solveen, economist at Commerzbank.
We end for the day with Europe sleepwalking its way to reinventing the old Soviet Union. Below, “are you now or have you ever been a member of a Swizz Bank?”
They seek him here. They seek him there. They seek that tax cheat everywhere. Is he in heaven? Is he in hell? Is he in a Zurich tax hotel?
With apologies to Charles Dickens and The Scarlet Pimpernel. (???)
Credit Suisse’s German Offices Raided in Tax Probe
July 14 (Bloomberg) -- Credit Suisse Group AG’s offices in Germany were searched today in a probe into allegations that its employees may have helped clients evade taxes.
Thirteen Credit Suisse (Deutschland) AG locations were raided as part of the investigation, Johannes Mocken, spokesman for the Dusseldorf prosecutors’ office, said in a phone interview. Investigators seized substantial amounts of data during the day, Mocken said.
“There is a lot of material to go through, so we won’t be able to finish all searches today,” said Mocken. “At least in the Frankfurt Credit Suisse offices, we will have to continue to work tomorrow.”
Germany has been rattled by probes that showed people hid assets in accounts in Switzerland and Liechtenstein to avoid paying taxes. Former Deutsche Post AG Chief Executive Officer Klaus Zumwinkel in January received a two-year suspended sentence and must pay a 1 million-euro ($1.27 million) penalty for avoiding about 970,000 euros in taxes.
German government officials bought disks containing bank data that have helped them locate possible tax evaders. The purchases stirred debate over whether it is legitimate to acquire data that must have been stolen from the banks and use it for law enforcement.
Data Disk
The case that prompted today’s raids began after German authorities obtained a disk with data that prompted probes against some 1,100 customers of Zurich-based Credit Suisse, Switzerland’s second-biggest bank. Dusseldorf prosecutors are investigating 175 cases, including some against Credit Suisse employees. The rest of the cases were referred to other prosecutors based on where the suspects live.
The bank is cooperating with the authorities, Credit Suisse spokesman Bjoern Korschinowski said by telephone.
http://noir.bloomberg.com/apps/news?pid=20601090&sid=a4kz9KrVbY8Y
"There is no means of avoiding the final collapse of a boom brought about by credit (debt) expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit (debt) expansion, or later as a final and total catastrophe of the currency system involved."
Ludwig von Mises
At the Comex silver depositories Wednesday, final figures were: Registered 52.47 Moz, Eligible 60.11 Moz, Total 112.58 Moz.
+++++
Crooks and Scoundrels Corner.
The bent, the seriously bent, and the totally doubled over.
No crooks today just scoundrels, but what scoundrels! Today, US Senators get all worked up over BP’s dealings with Libya. While they are investigating BP’s actions regarding the release of convicted Lockerbie bomber Megrahi, they might want to look a little closer at home into what the CIA knows of the dodgy fabricated forensic evidence that was used to convict him, and at the eye witness testimony that was used that changed over time, groomed until it eventually matched Mr. Megrahi. But why stop there. What about the CIA’s Cyprus connection to Hezbollah in the Bekka Valley, that allegedly caused the Agency to alter its agents travel plans to avoid Pan Am planes at Frankfurt airport. And just why was Megrahi forced to irrevocably drop his appeal in the Scottish courts that was nearing hearing and would have brought up the many other inconsistencies that point to Iran? As time has gone by, the whole case against Libya has weakened and that against Iran has strengthened. Someone has a whole lot to hide but it doesn’t look from London that it’s BP playing fast and loose with the American public’s emotions. Libya paid out, but never admitted responsibility, exactly as the US paid out for the Vincennes shooting down Iran Air flight 655. In our new-world-order age of fiat money, it’s now cheaper just to pay off the victims and move on. Another unintended consequence of fiat money.
The US government issued notes of regret for the loss of human lives and in 1996 paid reparations to settle a suit brought in the International Court of Justice regarding the incident. The United States government never admitted wrongdoing, nor apologized for the incident. In August 1988 Newsweek quoted the vice president George Bush as saying "I'll never apologize for the United States of America. Ever, I don't care what the facts are."
http://en.wikipedia.org/wiki/Iran_Air_Flight_655
BP to Start Drilling Off Libya as Senators Seek Lockerbie Probe
July 14 (Bloomberg) -- BP Plc plans to start drilling off Libya’s coast in the next few weeks as its links with the North African country come under scrutiny from U.S. lawmakers.
The London-based company has a rig in place to start a well in the Gulf of Sirt after completing a seismic survey last year. BP also plans to drill onshore in the 13,000 square kilometer Ghadames basin by the end of the year, Robert Wine, a spokesman for BP, said today.
BP, under political pressure to stop and clean up the worst oil spill in U.S. history, signed an exploration agreement with Libya’s National Oil Corp. in May 2007 during a visit by then U.K. Prime Minister Tony Blair. Four U.S. senators yesterday asked Secretary of State Hillary Clinton to investigate whether BP helped secure the release of Lockerbie bomber Abdelbaset al- Megrahi from a Scottish jail to facilitate the drilling deal.
“Evidence in the Deepwater Horizon disaster seems to suggest that BP would put profit ahead of people,” Senators Frank Lautenberg and Robert Menendez of New Jersey and Charles Schumer and Kirsten Gillibrand of New York wrote in the letter. “The question we now have to answer is, was this corporation willing to trade justice in the murder of 270 innocent people for oil profits?”
Libya has proved oil reserves of 44.3 billion barrels, the most in Africa, according to the BP Statistical Review of World Energy. BP’s worldwide operations have come under examination after an unstable well caused an explosion on the Deepwater Horizon rig in the Gulf of Mexico on April 20, killing 11 and starting an oil spill.
‘Checks Underway’
“Libya due to start in a matter of weeks,” Wine said today in an e-mail. “Rig is being made ready, final preparations and checks are underway.”
In August 2009, the Scottish government freed al-Megrahi on compassionate grounds. He was the only person found guilty of the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, that killed 270 people.
“It is a matter of public record that in late 2007 BP discussed with the U.K. government our concern at the slow progress in concluding a Prisoner Transfer Agreement,” the company said today.
“We were aware that a delay might have negative consequences for U.K. commercial interests, including ratification of BP’s exploration agreement. However, we did not express a view about the specific form of the agreement, which was a matter for the U.K. and Libyan governments,” it said in statement e-mailed to Bloomberg News.
http://noir.bloomberg.com/apps/news?pid=20601087&sid=ap8M5AS3HAVo&pos=6
“Those who don't know history are destined to repeat it.”
Edmund Burke.
The monthly Coppock Indicators finished June:
DJIA: +269 Down. NASDAQ: +460 Down. SP500: +290 Down.
The bull market (or bear market rally) that commenced on Nasdaq on 30/4/09 at 1717 has ended. (30/5/09 SP 500 at 919, 30/5/09 DJIA 8500.) While the indicators can flip flop at market turns, this action is rare on the slow monthly indicators.
