January 31, 2010

Copenhagen Climate Treaty & Climategate

Copenhagen Climate Deal Gets Low-Key Endorsement

Nations accounting for most of the world's greenhouse gas emissions have restated their promises to fight climate change, meeting a Sunday deadline in a low-key endorsement of December's "Copenhagen Accord."

January 31, 2010

Reuters - Experts say their promised curbs on greenhouse gas emissions by 2020 are too small so far to meet the accord's key goal of limiting global warming to less than 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial times.

The U.N. Climate Change Secretariat plans to publish a list of submissions on Monday. That may put pressure on all capitals to keep their promises.

Countries accounting for at least two-thirds of emissions -- led by China, the United States and the European Union -- have all written in. Smaller emitters, from the Philippines to Mali, have also sent promises or asked to be associated with the deal.

The Secretariat says the January 31 deadline is flexible.
"Most of the industrialized countries' (promises) are in the 'inadequate' category," said Niklas Hoehne, director of energy and climate policy at climate consultancy Ecofys, which assesses how far national commitments will help limit climate change.

"The U.S. is not enough, the European Union is not enough. For the major developed countries it's still far behind what is expected, except for Japan and Norway," he said.
Some developing nations, such as Brazil or Mexico, were making relatively greater efforts, he said.

The accord's goal of limiting warming to below 2 C -- meant to help limit floods, droughts, wildfires and rising seas -- is twinned with promises of $28 billion in aid for developing nations from 2010-12, rising to $100 billion a year from 2020.

Ecofys reckons that the promised curbs will set the world toward a 3.5 degrees Celsius rise in temperatures, not 2.

PricewaterhouseCoopers LLP said that on current projections the world would exceed an estimated "carbon emissions budget" for the first half of this century by 2034, 16 years ahead of schedule.

The European Union plans to cut emissions by 20 percent below 1990 levels by 2020, and 30 percent if others make deep cuts. The United States plans a cut of 17 percent below 2005 levels by 2020, or 4 percent below 1990 levels.
"Carbon prices look set to remain relatively low until economic growth picks up or until a more ambitious target is adopted," Richard Gledhill, a climate expert at PricewaterhouseCoopers, said of the EU goal.

"This will continue to delay major capital investment in low carbon technology," he said in a statement.
The Copenhagen Accord, reached after a summit on December 18 in Denmark, was not adopted as a U.N. plan for shifting from fossil fuels after opposition by a handful of developing nations such as Venezuela and Sudan.

One possible complication is that some countries, including China and India, have written to the United Nations giving 2020 targets but without explicitly backing the Copenhagen Accord. The U.N. has asked all to take sides by January 31.

An Indian document sent to the U.N. Secretariat does not mention the accord, for instance, but says it is giving details of plans to 2020 "in view of the current debate under way in the international climate negotiations."

Davos Leaders, CEOs Debate Climate Change Moves

Debate at World Economic Forum focuses on tackling climate change without breaking the bank

Associated Press
January 29, 2010

DAVOS, Switzerland – Fighting global warming and protecting the environment dominated the discussions Friday at the World Economic Forum, a month after U.N. climate change talks ended without a binding deal on curbing greenhouse gas emissions.

Mexican President Felipe Calderon, whose country is holding the next U.N. climate conference at the end of the year, was laying out his ideas in a session exploring what is next for climate talks. Renault-Nissan head Carlos Ghosn, who has championed electric cars, was also on hand.

Also Friday, Microsoft founder Bill Gates was speaking about how to better target global development aid and was expected to announce new funding to bring vaccines to poor countries.

Yvo de Boer, head of the U.N. Framework Convention on Climate Change, told The Associated Press that recent scandals over climate data have not discredited the view that global warming exists and must be countered.
"What's happened, it's unfortunate, it's bad, it's wrong, but I don't think it has damaged the basic science," he said.
Global warming skeptics have been reinvigorated since a U.N. report warning that Himalayan glaciers could be gone by 2035 turned out to be off by hundreds of years because of a typo — the actual year was 2350 — and by stolen e-mails from the University of East Anglia's climate science unit.
"Concluding that the Himalayan glaciers are going to disappear later is like being happy about the fact that the Titanic is sinking more slowly than we had originally feared, even though it's still going to sink," de Boer said.
De Boer said he was "depressed" after the climate talks in Copenhagen failed to produce a binding accord to cut global carbon emissions and pay poor countries to deal with higher sea levels. But he said it was "feasible" to get all countries on board for an accord in Mexico by the end of 2010.

A key part of the debate, however, is how progress can be made that is not just environmentally effective but also won't break the bank.

De Boer insisted that climate change was not "off the agenda" of the world after the failure of Copenhagen. He expressed confidence that the business leaders at Davos, who are starting to enjoy an economic recovery after a rough couple of years, would invest anew in renewable energy.
"Energy sector investments that were put on hold because of the crisis are beginning to be made again and I think people will take future climate change policy into account," he said.

The Right to Keep and Bear Arms

How Gun Registration and Confiscation Works in Canada

This is the sort of system the gun-brabbers want to bring to America.

January 29, 2010

Toronto Star - A pounding at the door the other morning; my windows rattled. I was upstairs at work. I don't always leave my desk to hear the good news about Jehovah.

The pounder was insistent. I went down, if only for the sake of the windows.

Oh, jeeze, the cops.

Officers Firth and Kozar in attendance. "What's up, boys?" My preference was to talk to them through the plate glass door. They wanted to come inside.

Not a chance.

I stepped onto the porch. Who wants two armed strangers in his house, and anyway it was a nice morning.

Officer K. said, "Are you aware of Project Safe City?" I hate it when a guy answers a question with a question.

"Why do you want to know?"

Officer K. said, "We have reason to believe you have a firearm." Oh, here we go again.

The last time a representative of the city showed up at my door, she had reason to believe I had a cat. How did she know? The lady cat cop peered through the window at my curtains and said, "Cat hair."

I dislike being spied on.

I also dislike armed men at the door. And then Officer K. mispronounced my name and asked if I still worked for this newspaper.

Hmm. He'd clearly done some research on me, and I had none on him, nor was I sure why my place of employment was important.

I asked Officer K. if he'd mind getting to the point. He thought I was being difficult. Not me. I am, however, uncomfortable playing 20 Questions in the morning with armed men on the porch.

The point?

Officer K. reminded me that my firearms licence had expired. He said I could turn the gun over to them for storage, or they could take the gun and destroy it.

My gun? It is a single-barrel .20 gauge shotgun. It is 40 years old. I used to take it into the woods up north to get partridge in the fall.

The last time I used it, I was walking along a hydro cut when I surprised a deer in the long dry grass. She leapt away in slow motion, flanks rippling, nostrils flaring; too beautiful.

I haven't hunted since.

I own no shells.

But it's my gun, dammit. I guess, when the Feds began the long-gun registry, I should have lied and not bothered to register the damn thing.

Officer K. pressed me about turning the gun over, there and then, for storage or destruction. For a brief moment I thought about handing it over, if only to get rid of him and his pal.

And then it just seemed wrong:

A couple of cops show up at my door, unannounced, and the talkative one says he has reason to believe, and I'm supposed to hand over my property just like that?

I hate to write this.

I know who's going to respond and how. Let me be clear: I am not one of those "pry it out of my cold, dead hands" guys. No one in the city but a copper ought to have a handgun. And so on.

But I am a fellow who grew up in Northern Ontario and who was once the scourge of the clay pigeon, feared among the partridges.

I told Officer K. I would not hand my gun over and he could take the next step, whatever that might be, and close the gate on the way out.

Did I think they were aggressive? Yes. Was my response temperate? Not especially.

An hour later Officers F. and K. showed up with their boss, Officer Nicolle. He was as angry as he was pushy and he said he wanted the gun or he'd come back with a search warrant.

I was offered no options.

No one ever said, look, you have to renew your licence; we'll give you two weeks, here's the paperwork you need; and in two weeks, if you don't have the licence we'll have to ask you for the gun.

In the absence of options, faced with a search warrant and outnumbered three to one, I said I'd get the damn shotgun.

Officer N. got in my face then and said, using his outdoor voice, "Don't you bring up any loaded firearms."

As if, copper.

I presume my gun's in storage now. The receipt does not say where or for how long.

Aren't you glad the city's safer?

Joe Fiorito usually appears Monday, Wednesday and Friday.
Email: jfiorito@thestar.ca

January 30, 2010


Latrines Join Food, Water on Haiti's Crisis List

January 30, 2010

AP - Relief officials are scrambling to confront a sanitation crisis that could spread malaria, cholera and other deadly diseases throughout the chaotic camps packed with hundreds of thousands of Haitian earthquake survivors.

Shortages of food, clean water, adequate shelter and latrines are creating a potential spawning ground for epidemics in a country with an estimated 1 million people made homeless by the Jan. 12 quake.

On Saturday, a single portable toilet served about 2,000 people in a sprawling camp across a street from the collapsed National Palace, forcing most to use a gutter that runs next to an area where vendors cook food and mothers struggle to bathe their children.
"We wash the vegetables first from water brought in by trucks, but a lot of times the water isn't clean," said Marie Marthe, 45, cooking a large pot of collard greens, carrots and goat as flies gathered on her daughter's diaper. "We don't have any choice."
Survivors have erected flimsy shelters of cloth, cardboard or plastic in nearly every open space left in the capital.

Women wait until night to bathe out of buckets, shielding their bodies behind damaged cars and trucks. Water is recycled - used first for brushing teeth, then for washing food, then for bathing.
"My 1-year-old has had diarrhea for a week now, probably because of the water," said Bernadel Perkington, 40. "When the earthquake happened I had 500 gourdes (about 15 U.S. dollars), which I was using for clean water for her. The money for that ran out yesterday."
The crowding and puddles of filthy water that breed mosquitoes have begun to spread diseases such as dengue and malaria, which were already endemic in Haiti. Some hospitals report that half the children they treat have malaria, though the rainy season - the peak time for mosquitoes - won't start until April.

Tight quarters also expose people to cholera, dysentery, tetanus and other diseases.

Dr. Louise Ivers, Haiti clinical director for Partners in Health, said she fears "a mass outbreak of measles, which would really be potentially devastating for a camp where there are 10,000 people living." Her organization has operated in Haiti for more than two decades and has about 4,000 medical workers in the country.

The U.N., Oxfam and other aid organizations have started to dig latrines for 20,000 people, said Silvia Gaya, UNICEF's coordinator for water and sanitation, even if that's a small fraction of the 700,000 people that officials said were living in the camps last week.
"In some parks, there is no physical space" even to dig latrines, Gaya said.
Dr. Jon Andrus, deputy director of Pan American Health Organization, said nearly three dozen organizations were joining the U.N.-led effort to build latrines and handle solid waste disposal.

Authorities also plan to build more permanent resettlement camps with plumbing and sewage, while PAHO is working with Haiti's government to chlorinate water in collapsible tanks.

Efforts to treat the injured suffered a setback, however, as the U.S. military said it had halted flights on Wednesday that had been carrying earthquake victims to the United States for emergency medical care, apparently due to a dispute between the states and federal government over who will pay.
"We can't fly anyone without an accepting hospital on the other end," said Capt. Kevin Aandahl, spokesman for U.S. Transportation Command.
But a Miami doctor involved in the relief effort said he had hospitals ready and waiting - and accused the U.S. government of endangering the Haitians' lives.
"We have 100 critically ill patients who will die in the next day or two if we don't Medevac them," said Dr. Barth Green, chairman of the University of Miami's Global Institute for Community Health and Development.
On a cot at a temporary field hospital at Haiti's international airport, 5-year-old Betina Joseph lay in a slate blue party dress, trying with waning energy to shoo a fly buzzing around her face.

Doctors said Saturday tetanus had developed in a small leg wound suffered in the quake.
"If we can't save her by getting her out right away, we won't save her," said Dr. David Pitcher, one of 34 surgeons staffing the University of Miami-run field hospital. Pitcher said two men had just died of tetanus at the hospital, which performs as many as 40 surgeries a day.
Joseph's mother, Denise Exima, 28, caressed her daughter's corn rows, apparently unaware that getting her out could mean life or death.

Green told The Associated Press that not even the U.S. Navy hospital ship Comfort, anchored off Port-au-Prince, can provide the respirator care - three to four weeks of it - that would enable Joseph to survive. The hospital ship Comfort is so crammed with patients that U.S. military officials are trying to organize a location on land where they can recover.

U.S. Ambassador to Haiti Kenneth Merten said about 435 earthquake victims had been evacuated until the flights stopped. He said the problem should be fixed.
"I'm sure the Department of Defense wants to do the right thing as do we," he said Saturday. "Look, everybody is here working on the ground trying to do the right thing for as many people as possible."
Food distribution was becoming more organized. The World Food Program on Saturday began handing out coupons that women - and women only - can turn in for food at 16 sites in the capital starting Sunday.

The coupons entitle each family to 25 kilograms (55 pounds) of rice. The idea is to ensure a dependable supply for families and prevent young men from forcing their way to the front or stealing food from weaker people in line, a common occurrence after the quake.

U.N. officials say they are still far short of reaching all 2 million quake victims estimated to need food aid.

Scenes of Survival and Death in Desperate Haiti

January 29, 2010

AP - They are the latest scenes of survival and of death in Haiti's deadliest disaster - a looter shot dead for breaking into an appliance store and crowds erecting new houses on shaky ground.

More than two weeks have passed since an earthquake destroyed much of Haiti's capital and left a vacuum of power over who should rebuild the country.

In a snapshot of the growing desperation, a private security guard fatally shot a looter who joined with others in breaking into a damaged appliance store in the commercial district Friday. As young scavengers carted away ovens, refrigerators and an air conditioner, an Associated Press journalist watched as the guard arrived firing an automatic pistol.

About a dozen soldiers from the U.S. Army's 82nd Airborne Division rushed to calm the situation but it was too late. The looter lay dead, face-down at the bottom of the stairs, splattered in blood.

Other Haitians are trying to focus on getting on with life, but the mood is grim everywhere.
"The situation is only getting worse," said Josielle Noel, 46, who was among dozens of people pooling their labor to start rebuilding in the concrete slum of Canape Vert, an area devastated by the quake.
Noel's house partially collapsed in the Jan. 12 earthquake. Two more small aftershocks shook parts of the capital Friday, although new damage is hard to spot in a landscape of buildings cracked, partially collapsed or flattened.

Tired of waiting for government help, the families lugged heavy bundles of wood and tin up steep hillsides to start rebuilding new homes on top of old ones.

Few tents have been supplied to the quake's survivors, rubble remains and signs begging for help in English - not Haitian Creole - dot nearly every street corner in Port-au-Prince.

It could take weeks to get the 200,000 tents needed for Haiti's homeless, said Marie-Laurence Jocelyn Lassegue, the culture and communications minister. Haiti now has fewer than 5,000 donated tents and coordinating the aid operation remains a problem.
"I have 44 years' worth of memories in this house," said Noel Marie Jose, 44, whose family was reinforcing crumbling walls with tin and wood in Canape Vert.
Houses on their side of a mountain were nearly all destroyed while dwellings on the other side remained intact.
"I got married here. I met my husband here. My mother braided my hair there, where these walls used to stand," Jose said. "Even if it's unsafe, I can't imagine leaving. Even if the government helps, it will come too late. This is how it is in Haiti."
Surrounding her, concrete homes were either crushed or had toppled down a hill. Jose and other families said they were worried both about the coming rainy season and fear they may lose their plots after demolitions because they either lack clear title or the government does not want them to rebuild on land it considers unsafe.

Reconstruction, resettlement and land titles are all priorities of the government of President Rene Preval - but so far in name only.

The government has been nearly paralyzed by the quake - its own infrastructure, including the National Palace, was destroyed - and so far it has been limited to appeals for foreign aid and meetings with foreign donors that have yet to produce detailed plans for the emergencies it confronts.

Its first priority is moving people from areas prone to more quakes and landslides into tent cities that have sanitation and security but have yet to be built. Preval held dozens of meetings with potential outside contractors to discuss debris removal, sanitation and other long-term needs.

Albert Ramdin, assistant secretary of the Organization of American States, has offered help in creating a new Haitian land registry - a process that could take months if not years because countless government records were destroyed in the quake.

Haitians ardently defend their property rights. If a family has occupied land for more than 10 years, they gain ownership rights even without a deed. For some families, small homes have been passed down through generations. Few Haitians have insurance, and the loss of what few assets they have has crippled countless families.

Many have tired of living in tents improvised from tarps, sheets and bedspreads, opting to rebuild their homes rather than find new plots.

Lassegue, the communications minister, said such rebuilding won't be tolerated - and the government wants to develop and implement a comprehensive reconstruction plan that might feature building codes, an anomaly in this impoverished nation.
"We've been sleeping outside but the rains will come soon," said Merilus Lovis, 27, taking wooden planks and erecting them for walls inside the foundation of his former home, where his wife and daughter died. "I'm scared of the floods on this hillside but I don't think that God would let such bad things happen twice."
Paul Louis, a 45-year-old porter, has started a business buying wood from scavengers and selling it on the street. He purchased a cracked and worn 1-by-8-foot board for about $2 and was selling it Friday for $3.
"People are afraid to build with concrete now," Louis said.
In another neighborhood, people dug through destroyed homes to salvage materials. Women did the wash amid the ruins.
"I have stayed, but I lost my home," said Thomas Brutus, who lives perched precariously on a debris-strewn hillside in a shack made from the remains of destroyed homes. "So I made this little house, even though I know it's dangerous. We have been here for 14 days and have received no help."
Many residents say they're staying because they grow vegetables on their small plots. Thousands of others have swarmed to improvised tent camps, where Elisabeth Byrs, an official of the U.N.'s humanitarian coordination office, said there is a "major concern" about sanitation.

About 200,000 people are in need of post-surgery follow-up treatment and an unknown number have untreated injuries, she said.

A Glance at Haiti Developments 18 Days after Quake

January 30, 2010

The Associated Press - A look at the latest from Haiti on Saturday, 18 days after a 7.0-magnitude earthquake devastated the capital, Port-au-Prince, and left an estimated 200,000 dead throughout the country:


Relief officials are scrambling to confront a sanitation crisis that could spread malaria, cholera and other diseases throughout chaotic camps packed with hundreds of thousands of survivors. Shortages of food, clean water, adequate shelter and latrines are creating a potential spawning ground for epidemics in a country with an estimated 1 million homeless.


The U.S. military has halted flights carrying victims to the United States because of an apparent dispute over where seriously injured patients should be taken for treatment.

It was unclear exactly what prompted the decision to suspend the flights, or when it would end. Military officials said some U.S. states were refusing to take patients, though they wouldn't say which states.


The U.S. military is assessing Haitian airports to which it can divert military traffic to allow Port-au-Prince's congested international airport to return to its civilian functions, said U.S. Army Corps of Engineers Col. Rick Kaiser.

Port-au-Prince's Toussaint Louverture International Airport is being strained by international relief efforts, with more than 160 flights a day landing at one point.


The rubble from destroyed buildings in Port-au-Prince could easily fill to the limit five football stadiums the size of New Orleans' Superdome.

U.S. Army Corps of Engineers Col. Rick Kaiser said Haiti's government could put the rubble to good use - perhaps building an artificial reef to augment fishing or using it as landfill to reinforce Haiti's many eroded mountains and ravines, thus preventing mudslides.


After temporary repairs by the U.S. Army Corps of Engineers, Port-au-Prince's earthquake-damaged port now can handle some 2 1/2 times the number of containers it was dealing with before the disaster.

The port's northern pier collapsed entirely under water in the earthquake, and the partially collapsed southern pier received further damage from aftershocks.

Climate Bills and a Green Economy

Venture Capitalist Bullish on Green Startups

January 28, 2010

Reuters - The U.S. recession and slow global economy have created big opportunities for investments in promising green startups, an area that at one time had lofty valuations, Silicon Valley venture capitalist Steve Westly said.

Westly, a former California state controller and eBay Inc executive, said he is seeing some "great quality of deals."
"Two years ago when we were investing, there was huge competition and people had bid the market higher," Westly said in an interview this week. "Because of the recession, we think entrepreneurs' expectations have moved back to reality."

He said: "It's a terrible time to raise money, but we think this is a great buying opportunity."
Westly, founder of Menlo Park, California-based Westly Group, is currently in the process of assessing business plans of green startups.

Westly Group closed its second fund, exceeding $127 million, in December and has already invested about half of that money in diverse green technology companies, including light emitting diode (LED) fixtures startup Lunera, solar cell maker Solexel and smart grid company Eka Systems.

The fund's investors include pension funds, strategic investors and high net worth families, with the principles committing over 20 percent of the capital of the fund.

Westly is especially excited about the potential of California startup Lunera, which makes ultra-thin LED lighting units for offices. The commercial market for LED lights is huge, he said, adding that Lunera is growing rapidly.

Looking forward, Westly said he expects many more investors to come into the green space in 2010.
Green technology "is not a bubble and is not going away," he said. "It has the potential to become one of the largest sectors."

"The only thing that held the industry back is a lack of IPOs," he added.
After a first round of initial public offerings, mainly by solar companies, in 2006 and 2007, the market for green IPOs has been slow. The financial market turmoil following the collapse of Lehman Bros. in the latter half of 2008 virtually shut down the IPO market. The appetite for IPOs has picked up since mid-September this year and the sector saw the successful debut of lithium- ion battery maker A123 Systems Inc.

Already a few green technology companies have filed registration statements for IPOs, including solar firm Solyndra Inc and biofuel firm Codexis Inc.

Westly says some widely expected high-profile green IPOs, such as Silver Spring Networks, would ignite the market this year. He also expects a lot of activity in the electric and plug-in hybrid vehicle sector, including lithium-ion batteries.
And: "The area I am most intrigued with is green building materials," he said. "It's not very sexy and is a blue-collar space that most people overlook."
Silicon Valley is finding high-tech ways to make age-old materials, such as energy-efficient ways to make concrete, windows that insulate better than walls, and wood substitutes.

Although the field is new, the green building materials sector is gaining attention and growing fast. Some surveys and studies estimate that the green building materials market is expected to reach as high as $500 billion in the next decade.
"The dollar amounts are huge and the opportunity is great," Westly said.

Illinois to Receive $6 Million Federal Grant for Green Jobs Training

January 24, 2010

AP - Illinois is to receive a $6 million federal grant to pay for green jobs training.

U.S. Sen. Dick Durbin on Wednesday announced the stimulus money will go to the Illinois Department of Commerce and Economic Opportunity from the federal Department of Labor. Durbin's office says the state department will use the money to train and place about 1,300 workers in energy-efficient jobs and help about another 1,700 workers earn degrees.

Projects include the Greater Rockford Solar Initiative and the Chicago Green Jobs for All Initiative.

Durbin says the money will "make a significant investment in the effort to reduce the carbon footprint of residents and businesses in Illinois."

The Final Push for World Government

Bankers in Favor of Paying Global Fee

January 30, 2010

The Financial Times - Some of the world’s most prominent bankers have come out in favour of a global bank wind-down fund, a concession from the industry after weeks of fighting proposals for new taxes in the US and Europe.

Josef Ackermann, chief executive of Deutsche Bank, told the Financial Times on Friday:

“To help solve the too-big-to-fail problem I’m advocating a European rescue and resolution fund for banks. Of course, the capital for this fund would have to come from banks to a large degree.”
Bob Diamond, president of Barclays , also supported the idea of a global levy, which could see banks contribute tens or even hundreds of billions of dollars over a period of years.
“I think every G20 country would like to have an insurance scheme that would help cover the cost of any future bank failure,” he told the FT at the World Economic Forum in Davos. “A co-ordinated global system is preferable to an unlevel playing field” ...

Sarkozy: Dollar Should No Longer Be the Primary Reserve Currency

January 27, 2010

New York Times - France wants to use its presidency of the Group of 20 next year to create a new international monetary system, President Nicolas Sarkozy said on Wednesday, adding that he believed the dollar should no longer be the primary reserve currency in the global economy.

In an expansive and lofty speech to the business and political leaders gathered here at the annual World Economic Forum, Mr. Sarkozy also called for a “revolution” in international regulation that would make labor, health and environmental standards as enforceable as trade rules.

Like Prime Minister Gordon Brown of Britain, he backed a tax on financial market transactions. But Mr. Sarkozy, pursuing his call for a more moral form of financial capitalism, suggested the proceeds be used to combat climate change and create a World Environment Organization as powerful as the World Trade Organization.

Mr. Sarkozy also took a hard line on bankers’ bonuses, saying that lavish rewards should be denied to those who destroy wealth and jobs.

But before an audience that contained many Americans and many Chinese, his comments on currencies may have had the greatest resonance.
“We need a new Bretton Woods,” Mr. Sarkozy told a packed auditorium. “We can’t have on the one hand a multipolar world and on the other a single reserve currency on a global level.”
In a thinly veiled reference to China keeping its currency at an undervalued level, he added:
“We cannot on the one hand laud free markets and on the other tolerate monetary dumping.”
During its 2011 presidency of the Group of 8 — the leading Western industrial powers plus Russia — and the wider G-20, which includes several important developing nations, France “will put the reform of the international monetary system on the agenda,” Mr. Sarkozy said.

Mr. Sarkozy also warned that the economic recovery currently under way remained vulnerable, urging central banks against withdrawing monetary stimulus measures too abruptly, saying it could prompt a collapse of the world economy.
"We must take care to prevent too abrupt a tightening,” he said.
The powerbrokers at Davos were not Mr. Sarkozy’s only audience. Six weeks ahead of regional elections in France, which are widely expected to be at least partly a judgment on his presidency, the president has tried to reverse a decline in his approval rating, currently at a record low.
“It was an effective, quite populist speech,” said Timothy Garton Ash, a professor at Oxford and political commentator who was in the audience. “As always at Davos, national leaders are at least half talking to their own audience.”
In 2008, when France held the presidency of the European Union for six months, Mr. Sarkozy proved a dynamic — if controversial — leader, first negotiating a ceasefire that halted the war in Georgia with Russia, and then bringing together European leaders to coordinate their response to the financial crisis.

As president of the G-20, he could repeat that performance, and even observers who find his style at times overbearing applaud his tenacity and energy.
“The dynamism of the chair,” Mr. Garton Ash said, “may bring some more substance to the G-20.”
Mr. Sarkozy was the first French president to give the keynote address at the Davos forum, and it afforded him the chance to pit well-paid bankers against ordinary citizens.

He reiterated themes that have resounded in recent days, starting with President Obama, who proposed a tax on banks’ liabilities, and then went further, suggesting that their size should be limited.

The French president said he agreed with Mr. Obama, but stressed that all regulation concerning banks should be dealt with at an international level, coordinated by the G-20.

Calling the current crisis a “crisis of globalization itself,” he urged broad coordination of regulation and accounting rules.
“If competition is distorted by accounting rules that remain very different from one country to another, and one continent to another, market actors will find it normal to return to precrisis habits,” Mr. Sarkozy said. “How, in a competitive world, can we demand of European banks three times more capital to cover their risks in their activities and not ask the same of American and Asian banks?”
His aim was not, he stressed, to do away with capitalism itself but to tame financial markets. To this aim, a tax, he said, was now unavoidable.
“We can’t escape the debate about taxing speculation,” Mr. Sarkozy said. “Whether you want to rein in frenetic financial markets, finance development aid or associate poor countries to the fight against climate change, everything brings us back to the taxation of financial transactions.”

January 29, 2010

Bank Failures in the U.S.

200 Bank Failures Expected in 2010

January 18, 2010

Martin D. Weiss, Ph.D. - Washington has so thoroughly botched its supervision of the banking industry that 200 banks are likely to fail this year — easily surpassing last year’s 140 bank failures … inevitably involving the greatest bank losses in historyand already costing the FDIC ten times more than the great S&L and banking crisis of the 1980s did.

I am not basing these conclusions on conjecture. They come straight from official sources. Specifically …
In her testimony before the Financial Crisis Inquiry Commission on Thursday, FDIC Chairman Blair attacked the Fed under Greenspan for causing the housing bubble and subsequent debt crisis with its highly stimulative, low interest rate policy of the 2000s.

She slammed virtually all of Washington for allowing banks to establish a huge, high-risk “shadow banking system.”

And she made it abundantly clear that, without sweeping, far-reaching reforms, we risk another devastating debt crisis.
Each of her conclusions is abundantly obvious and thoroughly documented. What she did not mention, however, are the following equally obvious facts:
Obvious fact #1. The Fed under Bernanke is now pursuing an even more stimulative, lower interest rate policy than it did under Greenspan, threatening to create even larger bubbles and more devastating busts …

Obvious fact #2. In just the last two years, between bank bailouts and easy money, Washington has done more to encourage the growth of the shadow banking system than in all previous years combined, and …

Obvious fact #3. Despite all the talk and testimony, the nation’s powerful banking lobby virtually guarantees that, in the absence of another Wall Street meltdown, the chance of sweeping reforms is virtually nil.
So here’s America’s financial dilemma in a nutshell:

Without sweeping reforms, the nation is doomed to repeat history with another debt disaster. But without another debt disaster, the nation’s political will for sweeping reforms is dead or dying.

In the meantime, the aftershocks of the 2008 debt crisis are getting worse, as the latest news clearly illustrates …

171 actual total failures: In addition to the 140 banks and S&Ls that failed in 2009, 31 credit unions went under, bringing the total tally to 171.

Worse than the 1980s: If you’re among those who think today’s banking crisis isn’t nearly as bad as the great S&L and banking crisis of the 1980s, think again. The average bank failing today is six times larger than it was back then, producing far greater losses. Moreover, each bank failure is costing the FDIC about TEN times more than it did in the 1980s crisis, according to the Meridian Group of Seattle. As a result …

Worst FDIC losses of all time: The FDIC lost more money in bank failures ($36 billion) than it lost in the ENTIRE five-year banking crisis from 1987 through 1992 ($29.6 billion). And in 2010, with the number of failures likely to increase, the losses will be even larger.

Big banks still losing billions with consumers: Until last week, the consensus opinion on Wall Street was that the troubles at the BIG banks were over; that to close this chapter in history, the only task remaining was a mop-up operation at smaller regional and community banks around the country.

That theory was shattered on Friday when JPMorgan Chase revealed it was forced to add $1.5 billion to its consumer loan loss reserves. The big problem: When it took over Washington Mutual last year, the biggest failed S&L of all time, it inherited a cesspool of mortgages that are now going bad at an accelerating pace. Other big consumer banks — like Citigroup and Bank of America — likely face similar woes.

The trading profits of big investment banks are a bubble: What most Wall Street bank analysts still don’t seem to recognize is that the giant trading profits they’ve been so enthusiastic about are generated by the same low-interest Fed policy that created the housing bubble — and is now in the process of creating MORE bubbles.

Without the Fed’s largesse, without the low-cost financing, and without the big risk appetite it generates, most of the big bank trading profits would have been impossible. More to the point: Just as soon as the Fed finally executes an exit plan, the bulk of those profits are likely to turn to losses.

What To Do

First and foremost, do not let up your guard when it comes to keeping your money safe. Yes, I know. With all the talk of the “end” to the crisis and Treasury bills paying virtually nothing, it’s tempting to venture away from safe harbors.

But how much more yield can you get by doing so? If you switch from Treasury bills to bank CDs, for example, the most you can gain is a small fraction of a percent. And if you switch from bank CDs to low-rated corporate debt, the extra yield you get is even less attractive.

In sum …

At this early stage so soon after the worst debt crisis since the Great Depression, the TRUE RISK of putting your money in higher yielding savings vehicles is still very high. Nevertheless, banks and other borrowers are asking you to take that risk WITHOUT paying you more than pennies for it.

My recommendation: Tell them to go fly a kite!

For your keep-safe funds, use strictly short-term Treasuries or equivalent.

Second, if you do other business with a bank or if you still want to keep some part of your savings in bank CDs … at least be sure to avoid the banks most likely to fail and stick with the ones most likely to survive. (For the latest Weiss Lists of the weakest banks and S&Ls, click here. For the strongest, click here.)

Third, bear in mind that, when it comes to your investment decision-making, TIMING is everything.

Last year, the stepped-up pace of bank failures did not derail the weak-but-continuing recovery in the U.S. economy. And for now, that’s bound to remain the case. As soon as we see signs that’s about to change, we’ll do our best to alert you. Until then, we stick with our current posture: Continue to invest, but do so with great caution.

Climate Bills and a Green Economy

Weather Channel Founder John Coleman Explains the Science and Controversy Surrounding Global Warming (Videos)

KUSI - KUSI meteorologist, Weather Channel founder, and iconic weatherman, John Coleman explains the science and controversy surrounding Global Warming.
Is civilization doomed because of man-made global warming? You've been told your carbon footprint could lead to skyrocketing temperatures, melting ice caps, dying polar bears and "superstorms."

Click here to watch each segment of the KUSI Special Report, Global Warming: The Other Side.

NASA has issued the following statement in response to the KUSI Special Report. This statement is from Dr. James Hansen, Director of the NASA Goddard Institute for Space Studies in New York City:
"NASA has not been involved in any manipulation of climate data used in the annual GISS global temperature analysis. The analysis utilizes three independent data sources provided by other agencies. Quality control checks are regularly performed on that data. The analysis methodology as well as updates to the analysis are publicly available on our website. The agency is confident of the quality of this data and stands by previous scientifically based conclusions regarding global temperatures." (GISS temperature analysis website)

Founder of The Weather Channel to File Lawsuit Against Gore and Climategate Cohorts

January 23, 2010

Hernando Today - Founder of The Weather Channel to file lawsuit against Gore and Climategate cohorts:
"Finally, efforts are being made by the founder of The Weather Channel, John Coleman, to sue Al Gore and his cohorts for perpetrating "the greatest scam in history" - the fraud of global warming. Thirty thousand others, comprised of scientists and experts, are also willing to join in that lawsuit.

So how did this fraud all get started? It all started in Chicago shortly after Earth Day, April 17, 1995, when Al Gore went to Fall River, Mass., to give his green sermon speech. He was soon joined by Maurice Strong and Peter Knight, a registered lobbyist and Gore's former top Senate aid.

It didn't take long before the Chicago Climate Exchange was formed and "a veritable rat's nest of cronyism" was formed. The largest shareholder in the Exchange is Goldman Sachs, and Chicago Mayor Richard M. Daley is its honorary chairman. The Joyce Foundation, which funded the Exchange, also funded money for John Ayers' Chicago School Initiative. John is the brother of William Ayers who was one of the founders of the Weathermen."

Obama, at the time, was active in this scam and knew darn well what was going on, but three years later that did not stop him from funding these leaders in the man-made global warming movement. The first attempt to improve the environment was a grant of more than $25 million in U.S. Department of Energy (DOE) for research and development. That turned out to be a failure, so they were awarded another $8 million in federal taxpayer's cash. That, too, was a failure. Present major funding is courtesy of Edward Rothschild's World Bank.

Now who was this Maurice Strong who wielded so much power? Strong was born in Oak Lake, Manitoba, Canada, on April 29, 1929. He started mostly in the petroleum industry in the 1950s. His career in that sector brought him large rewards and he soon became a billionaire. He managed to receive some appointments in 1999 from UN Secretary-General Javier Perez Cueller and later, from 2003 to 2005, Strong served as personal envoy for UN Secretary-General Kofi Annan for development of the Democratic People's Republic.

As if he hadn't amassed enough money for himself and probably Annan, Strong received a personal kickback check of $1 million from Tongsun Park, who was convicted of bribery to rig oil-for-food in favor of Saddam Hussein. Today, Strong lives, well guarded, in the people's Republic of China and has been given a number of important titles and accolades because the Chinese are banking on him to make China a world power, to weaken the United States and our economy, and to devalue the dollar so that it can be replaced by world currency -- which, incidentally, is what the United Nations wants.

In the meantime, Gore and the rest of the carbon credit schemers are positioning to buy up the carbon credits so that they can amass billions of dollars through a scheme to trade them to manufacturers who exhaust their limit. Gore receives $200,000 for the garbage he spews at all his speeches. He received more than $1 million for the Nobel Prize (two of the members of the committee have asked for it back), and he has received an Academy Award for the for the factitious special effects movie he utilized to make that monstrosity.

Needless to say, passing the Cap-and-Trade Bill that is pending in Congress is designed to ruin our economy, raise taxes, create more job losses, make billionaires out of schemers and make us less than a Third-World power. Why do we tolerate this corruption? That shining castle on a hill is beginning to look like an outhouse in a dump!

And if carbon dioxide is the cause of global warming because we exhale carbon dioxide when we expire, the dinosaurs must have created global freezing when they inhaled.

January 28, 2010

Bankrupting the Common People

Game Over for the American Middle Class

Inflation adjusted wages are up 20 percent in last 20 years while housing costs are up 56 percent and healthcare costs are up 155 percent.

January 28, 2010

mybudget360 - ... We are at an inflexion point and the middle class is largely being squeezed out. A recent study from the Commerce Department shed some light on an issue that we already know. Over the past 20 years the middle class has been falling behind ... Incomes have gone up during this time but the cost of housing, healthcare, and access to education have outpaced income gains in some cases by four to one. Money is only worth what you can buy with it.

The grand housing bubble of this decade lured many into buying homes that they simply could not afford. Banks and Wall Street were more than willing to provide access to this dream since they knew if all bets crashed, and they did, that they would call on their connected politicians to bail them out and send the bill to taxpayers for their adventures in finance.

Housing price changes have wiped out any gains in income. The relative amount of income needed to buy a home has put many two income households on the brink of bankruptcy. And the 4 million foreclosure filings in 2009 alone tell us that many Americans are unable to hold onto one cornerstone of the American Dream.

The middle class is absolutely vital to having a sustainable and flourishing economy. The massive debt machine coming from the big banks has created a new form of debt servitude. Some would argue that this is a personal responsibility issue and I will be the first to agree with that. People should live within their means. But think of the FICO score that has become like a permanent financial report card. Some employers actually screen for credit scores before hiring applicants. Want to rent a home because you don’t want to over extend and buy a home? You better hope that FICO is up to par. And many insurance companies base their analysis on this score. So even if you never had a credit card or any debt, you would be in a bad spot because so many people rely on this number.

This is only one example of how people are actually forced to use debt simply to pursue the avenues of the middle class.

... The idea of a middle class life is slowly drifting away as each and every day we realize that our nation is becoming more of a corporatacracy.

The housing nightmare really played on both ends of this middle class dream. Banks were more than willing to lend trillions of dollars to people that really could not afford the homes they were buying. This created the biggest housing bubble the world has ever witnessed and the bursting ramifications are being felt throughout the economy. Yet if you look at the equation, who is really being punished? Average Americans are being punished as they have their homes foreclosed on. Yet banks who are in the supposed position of financial experts, have not only garnered trillions in bailouts but are now back to their speculative ways. This is disturbing because it is highlighting a marked shift and a near game over for the middle class.

... The average American is simply working to stay on track or face being thrown off the treadmill. Jobs are so important to keeping a solid middle class. This should be obvious but current policy being driven by the corporatacracy is simply focusing on keeping prices inflated for the big ticket items (i.e., housing and healthcare).

At this point in the game, housing values have gone up to points that are clearly unsupportable. This being the biggest budget item for most households, you would assume that lower prices would be welcomed from the government seeing that many Americans are underemployed and those with jobs have seen stagnant wages.

The middle class dream is at risk. This is a question of what we want out of our country. Are we simply obsessed on keeping home values inflated so banking giants could keep gaming accounting rules and claim billion dollar profits?

If we want to prosper in the next decade, there will need to be a radical change to preserve what once was envied by the world. Otherwise, you can expect banks and their political allies to keep selling away the middle class of America. On the path we are traveling on the middle class is largely at risk for a big game over in the next decade.

Housing Might Drag Economy Down Again

January 22, 2010

Seeking Alpha - Other than high unemployment -- a lagging indicator in fact -- the economy does seem to be improving, but there is now a renewed threat from the housing sector, suggesting that sector could again face further and significant declines in price. It was the housing sector that dragged us down and threw us into recession the first time. It also collapsed Wall Street’s house of cards. It might well do it again. Here is the problem.

The 10-City and 20-City Composite Home Price Case-Schiller Indices declined 6.4% and 7.3%, respectively, in October compared with a year earlier. As David M. Blitzer, chairman of the Index Committee at Standard & Poor’s put it:

The turnaround in home prices seen in the spring and summer has faded with only seven of the 20 cities seeing month-to-month gains, although all 20 continue to show improvements on a year-over-year basis. All in all, this report should be described as flat.

Others disagree and see a sequential decline in prices in the numbers, claiming the Case-Schiller indices showed only a very slight increase currently and only because each report is an average of the preceding three months, meaning the strong August market was still a component of the October report. Also, they claim seasonal adjustments tend to hide any weakness in the cooler months as the pace of home-buying slows.

The change from improving and rising prices to now flat or falling prices raises ominous possibilities, especially inasmuch as mortgage rates have risen in the last four weeks from 4.71% to 5.14%, making it harder to afford housing.

Karl E. Case, the Wellesley College economist who helped design the Case-Schiller housing index, is alarmed and was recently quoted as expressing his very pessimistic outlook:
"I’m worried. Everyone’s worried. If [housing] prices sink 15 percent from here, which is a possibility, and the 2008 and 2009 loans [also] go bad, then we’re back where we were before — in a nightmare."
In short, loans written more recently would succumb to a similar fate as subprime and ALT-A loans written earlier. A whole new set of write downs or write offs would be needed if the FASB or IASB standards were strictly applied and there was a reversion to the mark to market rule. We would be awash in another large quantity bad debt.

Several elements reinforce this concern. Housing demand is weak. Median income continues to drop because of unemployment and a long term trend toward flat wages. Also, income is shifting from the labor force to top management and special interests, aided by Congress. The demand for housing is also being hit by selected vastly higher expenses that are driving many into bankruptcy — like medical costs which account for 50% of all bankruptcies. Also, population growth in the relevant cohorts is not adding to housing demand materially.

The net result is housing prices are vulnerable to further declines which could well drag the economy down with them, just as it did the first time. In part, this is the legacy of ill-advised tax laws which favored excessive investment in the housing market for many years in the first place, coupled more recently with Fed policies which aided formation of the housing bubble. Those problems are a lot to dig out from. Regardless, recent developments do not afford an encouraging prospect.

UK Families Face Shocking 20% Rise in Heating Bills as Gas Giants Cash in on Big Freeze

Gas bills will rise by 20% as families battle to keep warm during the cold winter

January 15, 2010

Daily Mail - Families face record winter gas bills averaging £360 as power companies reap a huge windfall from the big freeze.

The 'big six' energy suppliers have refused to pass on a steep fall in wholesale prices to customers. They are collecting a profit bonanza of £846million in a single month by charging over the odds to keep homes warm.

Householders have had no choice but to turn up the heat to cope with the coldest spell in 30 years, with snow and ice blanketing the entire country.

Domestic demand for gas over the last month is predicted to be 60 per cent higher than in a normal winter. This increased consumption will result in average bills of £360 for the three-month period from November through to the end of January, compared with £300 a year ago.

Greedy suppliers decided to reduce the tariff to customers by less than 10 per cent -- even though the wholesale price of gas came down by some 60 per cent between 2008 and 2009.

Separately, heating oil companies, which provide fuel to thousands of rural communities, have been accused of putting up their prices by more than 50 per cent since November. The evidence of apparent profiteering has brought calls from consumer groups and MPs for inquiries by both the Competition Commission and the Office of Fair Trading. At the same time, there is a mounting clamour for a windfall tax from pensioner groups, Labour MPs, unions, think tanks and the Local Government Association, which represents councils from all parties.

Analysts at the TheEnergyShop.com suggest the bill in the coldest period over Christmas and New Year would have been at least £36 lower if suppliers had cut their prices by a further 10 per cent, as they easily could, before the winter began.

Multiplying this across the nation's 23.5million households suggests the big six -- British Gas, Scottish & Southern Energy (SSE), RWE nPower, Eon, EDF and Scottish Power -- are making an extra £846million in a month.

SSE recently revealed a 36 per cent increase in profits for the period before the temperatures plummeted. UK suppliers owned by German, French and Spanish firms are enjoying a similar bonanza.

Andrew Hallett, energy expert at the official customer body, Consumer Focus, said:

'As energy firms failed to fully pass on wholesale price cuts before winter, they will be cashing in on the cold snap... Consumers are paying over the odds for their increased heating needs, giving a profits boost to suppliers.'
Joe Malinowski, founder of TheEnergyShop.com, said:
'This year's record winter bills will come as a real shock to many people, particularly when you consider that wholesale gas prices fell by over 30 per cent in 2009 and are 60 per cent lower than their 2008 peak. 'In freezing conditions, turning down the heating is not always an option.'

Apart from the cost, there is a real threat to the health of elderly customers who are too scared to turn on their heating. It is feared the cold temperatures, which exacerbate many underlying health problems, could contribute to some 60,000 deaths.

The National Pensioners' Convention said:

'We know that energy firms are quick to put up prices yet very slow to bring in the reductions... Energy companies, particularly in this cold winter, will be making huge profits out of very vulnerable customers. That raises the serious question as to whether they should pay money back through a windfall tax to fund things like home insulation.'
The Local Government Association has argued the need to raise an extra £500million a year for ten years from both oil and gas firms to fund a massive home insulation scheme.

Christine McGourty, director of Energy UK, which represents the major gas and electricity suppliers, rejected allegations of profiteering and advised anyone struggling with bills to contact the supplier for help. She said much of the gas being used this winter was bought up to two years ago, when wholesale prices were higher.

Copenhagen Climate Treaty & Climategate

Watchdog: UK University Hid Climate Data

January 28, 2010

Associated Press – The university at the center of a climate change dispute over stolen e-mails broke freedom of information laws by refusing to handle public requests for climate data, Britain's data-protection watchdog said Thursday.

A cache of e-mail exchanges between leading climate scientists that were stolen from the University of East Anglia's climate research unit and recently made public show that the institution ignored at least one request from the public for data, the Information Commissioner's Office said.

The watchdog said it received complaints about the university from David Holland, a retired engineer, in 2007 to 2008, but it has only recently come to light that his requests for data were ignored.
"The e-mails which are now public reveal that Mr. Holland's requests under the Freedom of Information Act were not dealt with as they should have been under the legislation," it said in a statement.
The thousands of leaked e-mails — made public on the Internet just before the U.N. summit on global warming in Copenhagen in December — sparked an international debate over whether scientists had exaggerated the case for man-made climate change.

Climate skeptics — including Republican lawmakers in the U.S. — claimed that the e-mails showed scientists secretly manipulated climate data and suppressed contrary views about climate change.

One of the e-mails disparaged climate skeptics, and a scientist said "the last thing I need is news articles claiming to question temperature increases."

Another complained about "getting hassled by a couple of people" to release temperature data that suggests uncertainties about climate change.
"Don't any of you three tell anybody that the U.K. has a Freedom of Information Act," Phil Jones, the director of climate research unit, wrote in one e-mail.
Jones temporarily stepped aside as unit director as an investigation into the matter proceeds. He has said the comments have been taken out of context and there never was an intent to manipulate data.

The Information Commissioner's Office said it could not prosecute the university for its breaches because it was too late to do so — it said the law requires action within six months of the offense taking place.

Edward Acton, the university's vice chancellor, denied that it hid data from the public and said there may have been a "misunderstanding." He told the BBC on Thursday that most raw data at the climate research center have long been publicly available.

Climate Control Supporters Focus on 'Clean Energy' Job Creation

January 27, 2010

Reuters - The four-letter word that will dominate President Barack Obama's State of the Union address on Wednesday -- jobs -- could be the savior for faltering climate control legislation, or at least that's environmentalists' latest hope.

Supporters of a global warming bill have failed to captivate the country with warnings of drought, disappearing polar ice caps, refugees fleeing floods and worsening disease. So, they are ramping up a more positive-sounding argument.

Forget environmental benefits and saving the planet. Clean energy they say, could create millions of new jobs, a potentially powerful argument amid a 10 percent U.S. unemployment rate, the worst in more than a quarter-century. [Editor's Note: 'Clean energy,' 'green jobs' and 'green technology' are the current catch phrases of the 'going green propaganda machine.']

There are opposing opinions, however, on whether jobs would blossom by requiring factories and utilities to use less oil and coal, or whether the rise of more expensive solar, wind and other "green" energy would kill jobs.
"We know that clean energy is a proven job creator," Senate Environment and Public Works Committee Chairman Barbara Boxer recently told reporters.
She cited a 2009 study by researchers at the University of California Berkeley, the University of Illinois and Yale University that concluded between 918,000 and 1.9 million jobs would be created over 10 years by the climate bill passed last year by the House of Representatives.

Those added jobs would ripple through the economy, giving it a $39 billion to $111 billion boost, the researchers said.


Similarly, a study by the Center for American Progress and the University of Massachusetts economics department looked at the combined effects of the House-passed climate control bill and last year's economic stimulus law. The latter included tens of billions to encourage alternative energy investment.

Around 2.5 million new jobs would be created, this study concluded. But with a projected 800,000 jobs lost in connection with the declining use of fossil fuels, there would be a net 1.7 million new jobs, it said.

Neither study included the possibility of a significant expansion of construction jobs if a climate control bill is coupled with new incentives to build additional nuclear power plants, as many Senate Republicans demand.

Currently, there are about 130 million jobs in the United States. A 1-2 million jump in jobs "is not insignificant," said Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics. It would help recoup some of the 7.7 million jobs lost over the past two years.

But Hufbauer, who has written extensively about global warming and economics, is no fan of pegging climate control legislation to job creation.
"To me, selling climate change as a job-creating measure is the modern equivalent of selling building the pyramids as a job creating measure in Egypt," Hufbauer said.
While jobs were created, he said the "actual increase in the amount of employment is questionable," as workers in Egypt could have been engaged in a variety of other activities, such as "growing more food."

Part of the problem in projecting job creation, according to some economists, is that there are many unknown factors that could intercede over the next decade.

The University of California study, for example, noted that efficiencies encouraged by climate legislation would reduce energy and transportation costs, saving families and businesses money "they can spend on domestic goods and services, which will create jobs for Americans."

That does not address the possible increase in consumer and business costs from using alternative energies, which are still much more expensive than coal or oil. Republicans, who mostly oppose climate legislation mandating lower carbon emissions, argue that manufacturing jobs will flee to countries that haven't imposed stringent global warming laws.


China will build green factories and create jobs for windmills and solar power if the United States doesn't, green advocates say. In fact, China is expected to have pulled ahead of the United States in installed wind power in 2009.

Also unknown is whether the Federal Reserve, during a period of accelerated consumer spending the UC study envisions, might have to use monetary policy to put the brakes on spending to stave off inflation.

As politicians, economists and environmentalists battle it out, the climate-jobs debate has not been bolstered by firm government statistics.

At the international climate meeting in Copenhagen last month, U.S. Commerce Secretary Gary Locke touted the prospects of "millions of blue- green- and white-collar jobs" by "reinventing" power generation, transportation and manufacturing with alternative energy.

But Locke told Reuters his agency had not done any detailed analysis of job creation and instead was relying on estimates from industry and foreign countries.

Hufbauer said that to be "really intellectually honest," legislation controlling carbon emissions should be framed as a way of buying an insurance policy against possible climate-related disasters.

In a closely watched State of the Union speech, that's unlikely to score the applause line of a jobs pitch though.

Government Corruption and Treason

Grayson: Fight Now or 'Kiss Your Country Goodbye' to Exxon, Wal-Mart

Congressman says of recent Supreme Court ruling removing decades of campaign spending limits on corporations "opens the floodgates for the purchases and sale of the law."

January 22, 2010

AlterNet.org - Responding to the Supreme Court's ruling Thursday to overturn corporate spending limits in federal elections, progressive firebrand Rep. Alan Grayson (D-FL) immediately highlighted a series of moves to "avoid the terrible consequences of the decision."
"If we do nothing then I think you can kiss your country goodbye," Grayson told Raw Story in an interview just hours after the decision was announced.

"You won't have any more senators from Kansas or Oregon, you'll have senators from Cheekies and Exxon. Maybe we'll have to wear corporate logos like Nascar drivers."
Grayson said the Citizens United v. Federal Election Commission ruling -- which removes decades of campaign spending limits on corporations -- "opens the floodgates for the purchases and sale of the law."
"It allows corporations to spend all the money they want to buy and sell elected officials through the campaign process," he said. "It allows them to reward political sellouts, and it allows them to punish elected officials who actually try to do what's right for the people."
Fearing this decision before it became official, Grayson last week filed five campaign finance bills and a sixth one on Thursday. Grayson said the bills are important to securing the people's "right to clean government."

The bills have names like the Business Should Mind Its Own Business Act and the Corporate Propaganda Sunshine Act. The first slaps a 500 percent excise tax on corporate spending on elections, and the second mandates businesses to disclose their attempts to influence elections. More details are available on the congressman's Web site.
"These bills will save us from drowning in corporate money and special interest money," Grayson said. "They should have been passed a long time ago but after the Supreme Court opened those floodgates, I think it's imperative we get these things done."
Reforming campaign finance laws has been a daunting task, as senators Russ Feingold (D-WI) and John McCain (R-AZ) have made concerted attempts and failed.
"I'm very optimistic," Grayson said. "I discussed the bills with the leadership when I filed them, which was a week ago in the case of the first five."

"The bills are short and readable, which frankly is pretty unusual these days," he said. "The longest one is four pages long and there are six of them."
Grayson has created the Web site SaveDemocracy.net to gather petitions in support of his bills. On Friday at 8:30 AM EST there were nearly 40,000 signatories.

'Worst Supreme Court decision since the Dred Scott case'

The first-term congressman from Florida had an ominous view of the consequences of embracing the decision.
"Anytime Exxon feels like it, Exxon can go and claim one of the 435 Congressional districts in this country, and drop $100 million in cash to pay for ads to knock off anybody they don't like. To them, that's an insignificant amount of money" ...

Geithner Told to Quit After E-Mails Reveal Involvement in AIG Cover-up

January 27, 2010

Prison Planet.com - Treasury Secretary Timothy Geithner’s denial that he played any role in the AIG cover-up is contradicted by emails which confirm that both Geithner and the New York Federal Reserve were both intimately involved in keeping details about payments to banks including Goldman Sachs from the public.

Geithner told lawmakers today that he had no involvement in withholding information about the bailout of AIG, much to the chagrin of House Oversight Committee Ranking Member Darrell Issa, who wasn’t buying it for a second.

“He has asserted complete ignorance of the Fed’s efforts to cover up the bailout details,” said Issa, R-Calif. “Many Americans, including members of this Committee, have a hard time believing that Secretary Geithner entered an absolute cone of silence on the day that his nomination was announced.”
John Mica of Florida went further, calling for Geithner to quit as a result of the scandal.
“Why shouldn’t we ask for your resignation?” Mica asked Geithner. “We’re not getting the whole story, we’re getting the blame story. You’re either incompetent on the job or you knew what was taking place and you tried to conceal it, and I think that’s grounds for your review.”
Mica characterized Geithner’s denials as “lame excuses” as the Treasury Secretary became visibly angry.

In November and December 2008, The Federal Reserve Bank of New York, headed up by Geithner, instructed the bailed out AIG to hide from the public details regarding payments the insurance giant made to banks, including Goldman Sachs Group Inc. and Societe Generale SA.

Using Fed secured taxpayer bailout money, AIG paid several banks 100 percent of the face value of credit-default swaps, as other financial institutions were negotiating deep discounts for the unregulated paper assets that do not have to be backed by cash.

The decision to pay the banks in full may have cost AIG, and therefore taxpayers, at least $13 billion over the odds.

The “backdoor bailout” of the banks, as it has been dubbed was exposed in March 2009 after the SEC challenged AIG’s filing, however, e-mails obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee, reignited the situation after they conclusively exposed a collusion between AIG and the Fed to deceive the public.

The e-mails between company and regulator show that The New York Fed crossed out reference to the payments and that AIG also omitted the details when the Securities and Exchange Commission filing was made public on Dec. 24, 2008.

The emails, the content of which are highlighted in this Bloomberg News article, also show that the Fed wanted numerous other details about the AIG bailout withheld or delayed from public oversight ...

January 27, 2010

Reduce the Size and Power of the Feds

Figures on Government Spending and Debt

January 25, 2010
Associated Press

What Is Public Debt?

Public debt is the outstanding amount of money the United States government has borrowed to cover its spending. In general, the public debt grows when there is a budget deficit. The government, through the U.S. Treasury, borrows money to finance the deficit by selling Treasury securities. The government then has to pay interest to the people and organizations it borrows from, just like when businesses and consumers get a loan from their bank.

Often the government runs an annual deficit, but not always; budget surpluses, as occurred from 1998 to 2001, may be used to pay back that debt and reduce the total amount of outstanding public debt.

To gain a better understanding about which groups purchase U.S. government securities (that is, who the government is borrowing from), it is helpful to break down ownership of U.S. Treasury securities into two broad categories of debt: (1) the amount held by the Federal Reserve and Government accounts and (2) the amount that is privately held. Privately-held government debt can be subdivided into the following holders of U.S. Treasury securities:

  • Depository institutions
  • U.S. savings bonds
  • Pension funds – private
  • Pension funds – state and local governments
  • Insurance companies
  • Mutual funds
  • State and local governments
  • Foreign and international institutions
  • Other investors
To Whom Do We Owe the National Debt?

The Department of the Treasury publishes The Debt to the Penny and Who Holds It. This up-to-date information divides the debt into two sections: Public and Intergovernmental Holdings. The former grouping includes domestic and foreign owned portions of the debt. The U.S. Treasury publishes Ownership of Federal Securities which is another break-down of the composition. Through combining these two data sets, as of December 2006, the composition of the U.S. National debt was:

U.S. Total Cumulative Debt Per Person

There are some suggestions that the total cumulative debt [the sum of all governmental debt plus corporate debt plus personal debt divided by the total U.S. resident population (around 305 million)] in the U.S. may be around 700,000 USD per person or about 2.17 million per U.S. census household (2.28 people per household).


The Collapse of the U.S. Economy

Commercial Real Estate Surpassed Residential Real Estate as Worst Performing Property Class in 2009

January 15, 2010

mybudget360 - Some of you are probably not aware that the commercial real estate market has crossed a dreaded line in the sand. Commercial real estate (CRE) that includes apartments, industrial, office, and retail space is now performing worse than residential real estate. Not just by a little but by a good amount.

While the CRE bust took about a year longer than the residential housing bust, once problems started hitting in this market prices have been steadily collapsing. At the peak, it was estimated that CRE values hit $6.5 trillion in the country. With $3.5 trillion in CRE debt outstanding, this seemed to provide a nice equity buffer. That buffer is now erased ...

Putting together all CRE values we find that the market has fallen by a significant 42 percent. Now assuming this figure, that $6.5 trillion is now “worth” approximately $3.7 trillion giving us an equity cushion of $200 billion for all CRE properties in the U.S. I doubt this figure is even that high.

It is safe to say that commercial real estate is now in a negative equity position. The U.S. Treasury has discussed plans on bailing out this industry but not much has been done on this front since all the bailout funds have been concentrated on residential real estate and protecting the too big to fail banks. Many CRE loans are held in the smaller regional banks that are actually small enough to fail.

... If we look at residential real estate, prices are down 32 percent from their peak. Keep in mind it is likely to fall further because many items like the Fed buying up $1.25 trillion in mortgage backed securities and keeping rates artificially low cannot go on forever. Also, is the government going to give our a tax credit forever? This is highly unlikely and when each program is phased out, we can expect minor shocks back into the market. Plus, we have to remember that many homes have been in a state of purgatory because of moratoriums and other patchwork programs. These only delay foreclosure and once they hit the market prices will continue moving lower.

Yet commercial real estate is falling with no support. And what would be the support given that our economy is contracting so viciously? Why would we need any more retail space near sub-divisions where people didn’t even move in? With housing there is a price point where people will move in.

Take for example the college student graduate that is only making $10 an hour because of the poor employment situation. He may need to move back home even though this isn’t what they want. If apartment rents are $1,000 a month, then renting on their own won’t make any sense. But if apartment rents are $400 in this area he may consider moving out.
This is the new calculus of the market. And apartment pricing is seeing pressure to the downside because of massive vacancies ...

And it gets even worse when we look at rental vacancies and this is where apartments fall under ...

This is the highest rate on record and tells us that we have over built and the market is still unable to sop up the excess properties. So what will happen is competition for cheap housing by lowering rents. This is the only way to drive demand in a market where average Americans are becoming more price conscious every day.

The problem with many of the CRE projects is that they were expecting peak value rents and will have no ability to service their debt with new market rental rates. That is, they are insolvent. And many bankruptcies will happen because of this. Or if you are a too big to fail bank you can simply walk away from your commitments . ..

And companies are not building any more properties as you might expect. This in turn means millions that derived their income from the building and housing industry will have years to wait before any recovery begins to take place. The CRE bust is now in full force even surpassing the disaster in residential housing. What we can get from this massive bubble burst is our near religion with all things real estate has led us to the economic abyss.

Home Building is Going Nowhere

January 17, 2010

MarketWatch - After plunging by about 75% from the lofty levels during the housing bubble, new home construction has finally stopped falling.

But, despite massive healing efforts by the government and the industry, home building hasn't shown any real improvement since bottoming early last year.

Through November, housing starts were essentially flat for the past year at an average annual pace of about 550,000, bouncing higher in one month and drifting lower in the next.

Economists expect little change when the government reports on December's starts activity on Wednesday of the coming week. The housing number will be the major economic release of the week.

The consensus forecast of economists surveyed by MarketWatch calls for a 3% decline in starts to a seasonally adjusted rate of 555,000 from 574,000 in November.
"Activity in the residential construction sector is still essentially unchanged relative to where it bottomed out in early 2009," wrote Meny Grauman, an economist for CIBC World Markets.
It is quite possible that housing starts will see the first year-over-year increase since early 2006; starts hit a pace of 556,000 in December 2008.

Weather could play a factor in this December's figures, economists for IHS Global Insight said. The numbers are seasonally adjusted, but unusual weather can extend the building season, or shorten it. In November, starts increased nearly 9%, in part because it was the one of the warmest and driest Novembers on record.
"As a result, some homes that would have been started in December were instead started in November," said Brian Bethune and Nigel Gault of Global Insight. December's weather was the opposite: cold and wet.
Home building is really two markets: single-family and multifamily. Building of single-family homes has actually improved, rising by about 30% from the lows of last year. In the meantime, starts of multifamily dwellings have collapsed, dropping over 50% from November 2008 to November 2009.

The industry has slashed production of new homes to work off a massive inventory of unsold homes. As of November, the number of new homes on the market had fallen about 60% to just 235,000, the fewest since 1971. And many of those homes are simply not salable. If it wasn't sold before, it's taking nearly 14 months on average to sell a home once it's completed.

The government, at the bidding of the builders, Realtors and bankers, subsidized buyers. But most of the first-time home buyers went for more-affordable existing homes, not new ones. However, repeat buyers are now eligible for the taxpayer-funded subsidy.
"The expansion of the program to include buyers who have previously owned homes could benefit the new market," wrote Peter D'Antonio, an economist for Citigroup Global Markets.
The new-home market is still at a disadvantage because of the number of foreclosures and short-sales.

In this environment, builders aren't eager to expand production, particularly because they don't know how the housing market will fare once the extraordinary support from the federal government wanes after the first half of the year, when the tax credit goes away and the Fed stops propping up the secondary market for mortgages.
"Residential construction should not be a significant driver of economic output in 2010, or even 2011 for that matter," Grauman predicted.
Another reason to believe that the economy won't boom.

Companies Flashing Financial Danger Signs

January 22, 2010

Forbes - ... Last year saw 207 bankruptcies of publicly traded companies. If there's a double-dip recession, this year's count could easily be as high. Leverage is still a big feature of American business.

We asked Audit Integrity, a research boutique in Los Angeles, to rank 2,700 companies for financial risk. The group consists of all public nonfinancial companies with market values of at least $100 million and $150 million in assets. Focusing on the 100 firms at the top in risk, it calculates an average 8% probability of going bust over the next 12 months.

ArvinMeritor is among the high-risk companies. More likely than not, it will sail through 2010 without any financial trouble. But the risk is higher here than at 99% of public companies, in AI's opinion.

AI's risk model incorporates the usual factors that go into credit ratings, like balance sheet strength and earnings. But it also figures in a measure of "accounting and governance" quality. The idea is that historical data can uncover push-the-envelope accounting and help predict which firms are likely to undergo financial restatements, regulatory troubles, class actions or severe financial distress.

James A. Kaplan, chairman of AI, set up the firm eight years ago after building and selling two other financial data crunchers: Capital Management Sciences, a bond analysis outfit, and the online financial portal MarketWatch. His inspiration for the latest venture came in 2002 as Enron was falling apart. Was there something that might have flagged this firm as a likely target of a Securities & Exchange Commission enforcement action? While studying SEC cases he deciphered common patterns involving such things as doing lots of acquisitions, divestitures, restructurings and share repurchases, or relying heavily on stock price gains in determining the boss' pay. From that he created his firm's Accounting & Governance Rankings.

AGRs are now used by big investors, director and officer liability insurers and others to gauge the chances that a public company will restate financials, face SEC action or get hit with shareholder litigation. Forbes.com publishes AGRs on its company tear sheets.
"Companies rated 'Very Aggressive' or 'Aggressive' have proved much more likely to face class action litigation and financial restatements and to suffer severe equity loss," Kaplan says.
Recently Audit Integrity began assessing bankruptcy risk as well, using not only accounting indicators like liquidity and leverage but also the AGR metrics and market measures like stock volatility.
"We find governance and transparency correlate with bankruptcy," says Kaplan.
Under AI's model 81% of the public companies that went bankrupt last year would have been classified among the riskiest 10%.

Not surprisingly, many of the companies now dubbed risky find fault with AI's methodology. One criticism is that the model doesn't capture some recent balance sheet or earnings improvements. Another is that the calculations don't give companies enough credit for making debt nonrecourse or for extending maturities. ArvinMeritor notes that its bonds are trading above par and its stock has soared.

All valid arguments. Yet at a time when markets are giddy and the riskiest assets the hottest, investors would do well to recall that bad things can happen--even to companies with credible arguments about why the naysayers are wrong.