R.I.P Paul Baloff you where the best thrash front man ever.

Got this on the Megadeth Rust In Peace tour.

According to the CFTC data for the week ended Tuesday, net shorts again went to a record high in the euro after last week’s modest drop. Net shorts in the pound fell a touch from last week’s record high. In contrast, net longs in the Canadian $ rose by 60% to the most since Nov ‘07 and net longs in the Australian $ rose 26% to a 7 week high. Net longs in gold rose for a 4th week, up slightly. Net longs in crude rose to a 7 week high.

Visit msnbc.com for breaking news, world news, and news about the economy

Your weekend reading assignment is this terrific long form piece by Senator Ted Kaufman, titled Wall Street Reform That Will Prevent The Next Financial Crisis.

I do not know anything about him other than to say that he understands the recent crisis and is proposing reasonable fixes.

The Senator wants to restore Glass-Steagall, and repeal the Commodity Futures Modernization Act of 2000. He supports the Volcker rule and is against TBTF. He favors cutting the behemoth banks down to size, and wants to give a “too big to fail” resolution authority to a single entity.

That’s a good start as anything else floating around D.C. . . .

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Source:
Wall Street Reform That Will Prevent The Next Financial Crisis
Senator Ted Kaufman
March 11, 2010

http://kaufman.senate.gov/press/floor_statements/statement/?id=aca5b91a-6e51-4d6b-a367-414ad9641500

WALL STREET REFORM THAT WILL PREVENT THE NEXT FINANCIAL CRISIS (PDF 163.7 KB)

In the early days pre-meltdown, there were a handful of skeptics pointing to problems at firms like AIG, Fannie Mae, Bear Stearns and most especially Lehman Brothers.

It was not the media or the analyst community that identified the frauds, but the short sellers. In this sad tale of criminality and corruption, the shorts were the heroes. They employed an army of traders, forensic accountants, and non-cheer-leading analysts to kick the tires of the major firms where something smelled funny.

When it came to Lehman Brothers, foremost in the crowd of shorts was David Einhorn. There were many others (me included), but it was Einhorn who most completely critiqued Lehmans balance sheet, and most vocally called out the shenanigans there. he is the hero in this tale.

At the time, the media gave LEH the benefit of the doubt. And for his troubles, Einhorn was often criticized — even trashed — by various people. The most vocal criticism came from usually astute Charlie Gasparino (then at CNBC, now at Fox Business).

But when it came to Fuld, Gasparino was off his usual sharp game. Whether he was too close to Fuld personally, or it was simply another case of access journalism is unknown. As I warned, and Charlie acknowledged on the air, Fuld was using him. (He disagreed).

But the bottom line is Charlie blew this one big time. And as the video (after the jump) makes clear, he did so in way that made the character of the parties’ to the Lehman debate an issue.

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“But you put up Dick Fuld versus Mr. Einhorn? Put up Dick Fuld versus Barry Ritholtz . . . ?

Its impossible to determine who is right and wrong . . . this is so muddy. But at some point, it comes down to the people: Dick Fuld, Einhorn, Dick Fuld, Barry Ritholtz.

Who do you believe?”

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Well, it turns out that we now know who was right and who was wrong. Thanks to the yeoman’s job done by Anton Valukas, the bankruptcy examiner in the Lehman Estate, we know Lehman management was a fraud, they hid losses and leverage and played their balance sheet like a fiddle.

Not only do we know who was right and wrong, we also know that relying on the sturdy character of Investment Bank CEOs — especially this one — was not the smartest way to make a bet.

And for that, you owe David Einhorn, myself and others an apology . . .

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MY SHIRTSSSSS...

BLOOMBERG TV: Brad Hintz, an analyst at Sanford C. Bernstein & Co., talks with Bloomberg’s Erik Schatzker about a report on the failure of Lehman Brothers Holdings Inc., which concluded the company used off-balance-sheet transactions to understate its leverage in late 2007 and 2008, deceiving shareholders about its ability to withstand losses.

On whether Dick Fuld knew about the financial engineering going on:

“Dick headed the risk committee of the firms and was very hands-on on the trading side. It strikes me on this one, from reading between the lines, that Dick was a very forceful personality and could easily get into a situation where he’s dominating the people around him and the information isn’t coming to him.”

“On the other hand, what you end up with in a fixed income house is a natural battle between a CFO and a fixed income division. In a yield curve environment, bigger balance sheets are better than smaller balance sheets so you’re going to have a natural battle between revenue and risk going on. What you want is a CEO to balance between the two. I think the question that you have is, over time, did Dick delegate too much to other people?

“On the risk side when I was there he was always tightly in control. He would be very comfortable calling trading desks, so it’s hard for me to see him giving up the risk side. On the balance sheet side, my experience with Wall Street has been they don’t make large radical changes, but they make a lot of…think of them as menial sins…over 10 years a lot of menial sins add up.”

Hintz’s reaction to the report:

“What surprised me was the fact that you were so late in terms of bringing down the balance sheet. The comments about shrinking Lehman’s balance sheet really wasn’t something that occurred until well after the crisis began, which if you’re facing a funding or confidence crisis , the first thing you do is put your balance sheet into a nose dive and raise cash.”

“Of course the other issues all the press is talking about the Citi and JP Morgan, but they were acting purely in their best interest, you grab every dollar of collateral you can when a counterparty gets into trouble and then you worry it with the courts later. What we have here is the courts worrying about it, and JP Morgan and Citi were pretty aggressive in grabbing collateral from them.”

“What surprised me as the CFO was the accounting systems that were in existence back in 1996 which I thought were relatively primitive, in this thing they make it pretty clear there wasn’t a lot of money invested in the accounting systems. Although they didn’t find any accounting shenanigans, what was very clear to a reader of this was that there was an awful lot of stuff being done by hand. The battles that I fought inside the company about leverage in the 1990’s, they were still fighting 10 years later.”

On the transaction REAP0 105:

“No, it wasn’t done at the other firms, so it was clearly an accounting technical approach in order to bring a balance sheet down. But you’re not bringing the balance sheet down….If all you’re doing is hiding behind a curtain, it’s not there.”

“I would call it shenanigans. This made it worse. Remember Lehman was operating at about 31 times leverage, in terms of gross leverage. They weren’t low in terms of their leverage. They were up at Morgan Stanley’s level.”

On whether he thought this was manipulation:

“The issue is what was in that reapo book? Were there less liquid assets in that reapo book that were therefore being held on the balance sheet? The terminology would be: what was the cash capital position of the firm? Which was, could the firm stand a funding crisis? This was a calculation which had to be done daily. The answer probably was not good, but we don’t have that from the report.”

MY Guitar And pics Comment The or Die !!!!!!!!!!!!!!!

The Kellogg’s love of Indy cars started in the early 1950’s. I can remember laying in bed listening to the Indy race as it started around 9am in California. It was so exciting not only to hear the announcer’s voice for four plus hours, but also the sound of the Offy’s screaming around the track. It was a complete high for me. Moving forward half a century, I am still a racing fan. I still go to various events across California. And I still think about the great drivers from this state that always seemed to do well in the month of May.

I married my sweetheart of 52 years in 1957 and drove back to Indianapolis in 1958. We slept across the street in our 1958 Plymouth wagon, paid $10 for our standing room only seats, and even though the day featured a 16 car pileup and a death, my love for indy racing never succumbed. These were the days of drivers who risked their lives and made a difference on the track and the builders who worked as a team. If you had a shop, some ingenuity, and the drive, you had a chance to win Indy with a budget as low as $10,000.

Many years later, I started an automotive business focused around tires. The company did well and soon we found ourselves buying and selling millions of shocks, brake parts, and other items. One thing lead to another and my wife and I found ourselves “invited” to attend Indy. Gone were the days of the $10 cheap seats as we found ourselves perched in a suite next to the Hulman suite, and escorted there by police cars – often down the wrong side of the road to ensure we made the race on time. Damn lucky…

Next was the adventure of 1976 – our first Indy car. I saw an ad for an Indy roadster for sale in Hemmings. The car had finished 8th in 1960 while powered by a gorgeous Offy motor. I called and made an appointment to see the car. I had planned to trade my 300SL on the car, but the deal fell through. Months later I tried again and found the owner in Hawaii. Mr. Howard mentioned the car was in St. Louis, gave me a price, and I went for it. Not long after, my wife and I were pulling the dirty little roadster home to California. In Arizona, we were running close to 80mph when a trooper pulled along side us and gave us a thumbs up. I guess if you’ve got an Indy car, some highway laws just don’t apply.

In any case, enjoy the photos of this story. They were taken as we found the car in St. Louis, pulled it back to California, and began the reconstruction process with the help of Gordon Schroder. Gordon raced his own cars at Indy in the 1950’s and was a great man. He also introduced me to Sam Hanks – the ‘57 winner. Sam would end up taking our car on parade laps at the Ontario Speedway in 1979. Of course, we are still great friends with Sam’s wife, Alice, and she still looks as good as she did the day won that great race in 1957.

These photos are being seen for the first time and I am pleased to have them for all of you as your all nuts like myself. If this excites you for the good ole days, next month I’ll do something on fuel injection and the engines that tried the STU Hilborn system in 1948 and after.

Regards and thanks again to Ryan for putting up with this old guy.

Ron Kellogg

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Gorgeous !

Classic Driver has some fantastic photos of the latest Alfa Romeo Spyder, via Pininfarina:

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Photos: Pininfarina

The spider of the future as seen by Pininfarina. To mark its 80th anniversary, Pininfarina proposes an open Alfa Romeo that is exciting and a delight to drive.

Proving that how one feels don’t necessarily translate to how they act, the first look at March U of M confidence fell to 72.5 from 73.6 and matches a 4 month low and is 1.5 pts below expectations. Both Current Conditions and the Outlook fell. One year inflation expectations rose .1% to 2.8%, matching the highest since Oct ‘09, likely due to the slow creep higher in gasoline prices which last night hit a fresh 17 month high. The key to confidence is the labor market and notwithstanding the improvement in retail sales, the labor market picture is still uncertain. IF, however, the economy is currently turning a corner in a sustainable way rather than seeing some reversion to the mean after the late ‘08-early ‘09 earthquake, employment will pick up and confidence will follow.

Snow storm influenced Feb Retail Sales weren’t hurt by the snow storms as headline sales rose .3% vs an expected drop of .2%. Ex autos, sales rose .8% vs an expected gain of .1% and taking out gasoline sales in addition to autos saw a gain of .9% vs the forecast of up .3%. Jan headline sales were revised down by .4 of a % pt so taken with Feb makes the headline figure about in line with forecasts but ex auto’s the revision lower was only .1%. Sales of motor vehicles/parts fell for a 3rd month, by 2% and health/personal care sales were down but were both offset by a rise in every other category with electronics in particular up 3.7%. Feb is a clearance month and is thus usually shrugged off but the data is a clear positive pulse of consumer spending in light of the snow storms which I guess resulted in more people going to the mall.

The bankruptcy report on Lehman is both revealing and damning. Once again, the investing public learns — after the fact — the basic truisms of modern markets:

-Major accounting firms are worthless to investors. They were either unable or unwilling to detect fraud amounting to 50 billion dollars. The incompetents at Ernst & Young deserve the same fiery death as Arthur Anderson; Whether they are hired guns or paid whores, they — like the rating agencies — are worthless to investors.

-Corporate management engages in fraud all too regularly: Am I reading this correctly — that Dick Fuld’s defense will be “I didn’t know that Lehman was a giant Ponzi scheme, and I was unaware we were hiding billions in bad debt and leverage off balance sheet?”

Based on the release of the bankruptcy court report, LEH was technically insolvent perhaps years before it collapsed;

-The Shortsellers turn out to be the good guys. Consider the absurdity fraud of “protecting” the bankster frauds — fromt he truth, as revelaed by Einhorn et. al.

-The SEC is utterly incapable of comprehending how markets function. They believe the criminals who commit the fraud, and ignore the whistleblowers who uncover it;

-The ban on short selling is an indictment of the inability of the SEC to understand WTF is going on, and a reward tot he criminal corporate management teams;

-The Media did a terrible job uncovering the fraud as well. Some media folk were used by CEOs. Some of the TV press who relied on access to their subjects, actually rallied to the defense of these CEOs, including Fuld, and trashed the short sellers. Most notably Charlie Gasparino from his CNBC days, but their were others as well.

-The Analyst community, for the most part, failed as well. The few who publicly acknowledged the debacle were notable for being so far outside of the herd. 95% of them were wrong.

Pathetic

All in all, the entire system failed. The situation is utterly disgusting, and if the investing public pulls its money out of the completely corrupt public markets for a generation or more, it would not surprise me . . .

If a person were to listen to Energy Secretary Steven Chu or National Geographic's Aftermath: World Without Oil, one might think that our energy problems are fairly minor and distant. We can easily add sufficiently renewable energy to substitute for fossil fuels in a fairly short time frame. All we need to do is put our minds (and pocketbooks) to it.

But if one looks at the situation more closely, one discovers that the situation is quite different. Our energy problems are close at hand, and solutions using what are optimistically called "renewables" are distant and may very well sink the country further into recession.

Figure 1- US energy consumption by source, based Energy Information Administration (EIA) Monthly Energy Review Table 1.3.
*Year 2009 estimated based on data through November.

US energy consumption is already down quite a bit--some might say due to recession, but it seems even more likely that the result is the other way around--high energy prices squeezed the financial system. This in turn caused credit availability to drop and demand for oil, gas, and coal to drop. We have put a huge amount of effort and subsidies into wind and solar, but they hardly show up on the chart. Ethanol isn't shown separately in the chart this data was taken from--instead it is combined with wood and with other biofuels in a category called "biomass" in the EIA data. The biomass line has thickened a bit, but it is still pretty insignificant.

The following are a few observations about our current situation:

1. Even though wind, solar photovoltaic (PV), geothermal, and ethanol are called "renewables", they cannot be produced without fossil fuels, and need fossil fuels for maintenance.

In many ways, these energy sources should be called "fossil fuel extenders" rather than renewables, because they are very dependent on our current system. For example, growing corn for ethanol depends on tractors run by diesel for growing the corn, and natural gas or coal to power the ethanol plant. Corn is fertilized using fertilizers which are often imported, and sprayed with oil-based insecticides. Wind turbines require regular maintenance, and need to be part of an operating electrical system with fossil fuel back-ups. Solar PV will continue to make electricity once they have been made, but will not produce round-the-clock electricity unless they are part of an electrical system (which requires fossil fuels) or have battery backups which are replaced every few years (also requiring fossil fuels).

2. World oil production appears to have peaked. If it has not reached its maximum level, its maximum level is likely only a few years away.

Figure 2. World oil production ("Crude and Condensate) from EIA Table 4.1d from International Petroleum Monthly.

World oil production was increasing quite rapidly through 2004 (except for slowing down during recessions). In 2005, the rate of increase dropped, and production has been on a bumpy plateau since--although 2009 appears to be possibly headed downward--or at most on a continuing plateau for a while, before heading downward. There is no longer oil to be found which can be produced inexpensively--most of it was found long ago, and has already been pumped.

Newer sources of oil tend to be more expensive. If economies could really afford $200 or $300 or $400 barrel oil, and had unlimited capital, perhaps production could increase some more. But at some point, we run short of capital for more and more expensive new production, and the high price of oil tips the economy into recession and dampens demand.

Many analyses are reaching the same conclusion about world oil production. Just this week, a new study from Kuwait predicted oil production may reach a peak and decline in 2014. The International Energy Agency has also been talking about the possibility of a peak before 2020.

3. Whether the peak in production is from Peak Supply or Peak Demand, the result for the consumer is equally bad--recession, reduced job availability, and increasing loan defaults.

It does not really matter whether one puts the label "supply constraint" or "demand constraint" on the resulting drop in production--the effect is the same. Prices are still high relative to historical prices, even through the world is struggling to emerge from recession, as shown in Figure 3 below.

Figure 3. Spot oil prices for benchmark West Texas Intermediate. Graph by EIA.

Oil is essential for food production and transportation. Consumers tend to cut back on discretionary purchases (causing recession) or to default on their loans, if their budgets are squeezed by high prices oil prices. James Hamilton was one economist showing a link between high oil prices and recession.

4. Scaling up renewables to replace fossil fuels in current quantities does not look like it has much of a chance of succeeding, even in the long term.

One issue is the point made previously--it takes fossil fuels to produce renewables like wind and solar PV. Also, Figure 1 shows our success in scaling up so far has been quite limited. Scaling up ethanol further would require taking a huge share of our corn crop. Cellulosic ethanol isn't working out to date, and may never work out. Wood and other biomass is limited in supply, limiting production if it could be perfected.

There may be some particular applications of renewables which may turn out to work out well--for example, natural gas from waste, or biofuel from waste grease. But these tend to be limited in quantity.

Even if we were to, say, discover a way of producing biofuel from algae economically, it would years to work out the details of scaling production up, and a huge amount of investment (and fossil fuels to make tanks and other apparatus) to actually produce the biofuel in quantity. One would probably be looking at more than 30 years before the process could be scaled up sufficiently to start replacing a significant share of our oil production.

5. Natural gas will not solve all of our problems.

There has been considerable publicity about the US having "100 years of natural gas" available at current usage levels. There are several issues, however:

a. Natural gas will not run in our current vehicles. Fixing vehicles to run on natural gas, and adding infrastructure to deliver the gas, is likely to be expensive and take quite a few years.

b. If we were to use natural gas for transportation, supply would run out very quickly--perhaps 20 years or use, or even less. Look at natural gas use, compared to oil use on Figure 1.

c. It is not clear that the "100 years of natural gas" is available at prices consumers can afford. If the price is high, we may very well have the same "peak demand" issue we have for oil--people will not be able to afford huge electric bills and huge home heating bills--say double today's level.

d. Scaling up natural gas faces huge challenges. Our infrastructure is only built for the current usage of natural gas. Adding more pipes, storage, and end usage is very expensive and time consuming. If the timing of the new infrastructure is slower than the increase in gas production, gas prices are likely to plunge or stay too low for profitability.

e. There are concerns regarding "fracking" near major water supplies, such as that of New York City. Expansion of natural gas may not occur to the extent that many are hoping will take place in the 100 year supply numbers.

6. If increased drilling is done in the US and offshore, is likely to have modest beneficial impact on oil supply, but it is highly unlikely that it will solve our problems.

Gary Luquette, President of Chevron North America Exploration and Production recently wrote:

The good news: the OCS [Outer Continental Shelf] has significant potential. Over time, it could add 1 million more barrels of oil and natural gas equivalent a day--potentially representing a fifth of the current total U.S. oil production. Advances in technology could increase that amount dramatically.

One million barrels of oil and natural gas equivalent is great--certainly more than what we are getting from biofuels or from wind or solar. If one adds additional onshore production, it could be more than this, perhaps another 1 or even 2 million barrels of oil and natural gas equivalent a day.

But remember, this isn't even all oil--part of this is natural gas, the problems of which were described in Item 5, above. Compared to the world's oil supply, an additional one million barrels of oil a day about 1% of world oil production. Compared to US oil usage, an additional one million barrels of oil a day is about 5%. So the additional oil supply would be helpful, (as would the additional jobs, and reduction in needed imports), but it wouldn't solve all of our problems.

Also, if the price of the new oil supplies turns out to be too expensive (because, for example, the cost of drilling in deep water is too expensive), we may find that the new supplies are really more expensive than the economy can afford. Oil prices may remain below the cost of production, bringing a fairly quick end to new production--oil companies will soon quit production, if deep sea (or other new production) is clearly a money loser.

7. Renewables tend to be high priced. If our big problem with oil is high price, renewables will not solve our problems.

Subsidies only hide high price--the cost to the economy is high, with or without a subsidy.

If we can find cheap renewables, it would be in our interested to expand them as much as possible. But expanding expensive renewables should be done with great caution, in my opinion. We have no guarantee regarding how long the renewables will last--wind is likely only to last as long as fossil fuels supplies are available. Just because an analysis is done assuming that wind (or another energy source) will have a 40 year lifetime doesn't mean it will actually last that long.

Oil Production to Peak in 2014, Scientists Predict Predicting the end of oil has proven tricky and often controversial, but Kuwaiti scientists now say that global oil production will peak in 2014.

Their work represents an updated version of the famous Hubbert model, which correctly predicted in 1956 that U.S. oil reserves would peak within 20 years. Many researchers have since tried using the model to predict when worldwide oil production might peak.

Some have said production already peaked. One earlier model by Swedish researchers suggested that oil would peak sometime between 2008 and 2018. And other researchers have argued there are decades to go before oil production goes into irreversible decline. The only thing they all agree on: Oil is a finite and very valuable resource.

Ramirez sees oil flowing despite worries Venezuelan Oil Minister Rafael Ramirez said today that the country would continue producing crude oil even if its ailing electricity system were to suffer a collapse.

"We will not stop producing oil," Ramirez said, adding that he doubts there will be any catastrophic failure of the national electricity system, so long as energy-conservation efforts continue.

FACTBOX - Pemex's deep water Gulf of Mexico exploration record (Reuters) - Mexican state oil monopoly Pemex has pinned its long-term hopes on the deep waters of the Gulf of Mexico, where the government estimates as much as 29.5 billion barrels of oil equivalent could lie.

But so far the drilling campaign has had few successes.

BP Books Tanker for ESPO Crude Oil to U.S. West Coast (Bloomberg) -- BP Plc, Europe’s largest oil and gas company, chartered a tanker to ship Russian East Siberian Pipeline Oil to the U.S. West Coast, according to fixture reports from shipbrokers.

£3bn coal power plant will test strength of Ed Miliband's environment rules The first application to build a coal plant in Britain since energy secretary Ed Miliband introduced tough new environmental rules will be submitted next week, the Guardian has learnt.

UK-based conglomerate Peel Group is pressing ahead with the £3bn project to build a 1.6GW plant at Hunterston in Scotland, which will partially fit experimental carbon capture and storage (CCS) technology. Its former partner, Dong Energy, dropped out last year, citing the recession. The application, which is expected to be submitted to the Scottish government on Monday, signals Peel's confidence that the unproven technology can work.

Study sees efficiency as key to meeting energy needs The big buzz at the CERAWeek conference may be natural gas, but a new study says it's time to light a fire under energy efficiency to meet future energy demands.

The study, unveiled Thursday at IHS Cambridge Energy Research Associates' annual meeting in Houston, says that of all the options available, efficiency is the best way to improve the supply-demand balance quickly while keeping costs low and greenhouse gas emissions in check.

“It's the one thing that's really embraced across the spectrum,” said Daniel Yergin, chairman of IHS CERA. Enthusiasm for efficiency is high “around the world, at the top of the energy agenda, whether you're talking about China, Europe or the United States.”

That enthusiasm will be needed because doubts remain about the other paths to a cleaner energy future.

In energy, let's not deny what we agree on James Mulva drew a hearty round of applause when he threw out the term.

In a speech before the energy industry faithful at the CERAWeek conference Tuesday, the CEO of Houston-based ConocoPhillips labeled those who oppose oil and natural gas at any cost as “hydrocarbon deniers.”

Mulva's point is well taken. Washington policymakers are too focused on promoting alternative fuels at the expense of conventional ones, especially natural gas.

Alberta To Cut Royalties Amid Competition The Alberta government announced plans Thursday to cut the royalty rates it charges natural gas and oil producers in an effort to make the province more attractive to investment.

Virginia Leads the Way for East Coast Offshore Drilling Offshore drilling legislation was signed into law yesterday by Gov. Bob McDonnell, who is positioning Virginia to be the first East Coast state to drill for oil and natural gas in Atlantic waters, the Associated Press reported Wednesday.

However, the bills' future will ultimately be determined by the federal government and Congress' support to drill on the outer continental shelf.

A Saudi-Turkish alliance against Iran? STRATFOR's thesis is the Saudis are looking to Turkey to act as an ally in restraining Iranian pretensions to regional hegemony. The Turks have their own leadership aspirations which involve pursuing a neo-Ottoman strategy that joins Sunnis and Shias under enlightened, of course, Turkish leadership.

New power outages hit Manila MANILA - AN ENERGY crisis in the Philippines triggered by a severe drought deepened on Friday as the nation's capital endured another round of rolling blackouts.

It was the third week this year that Manila's 12 million residents faced power outages, while the mostly rural southern Philippines has faced blackouts daily for more than a month.

Venezuelan energy crisis hits workers' income The leader of the CTV said that rather than layoffs, "the work dynamics has been restructured," especially in industries that operate with four work shifts.

For example, General Motors removed a third shift, but did not fire workers. The carmaker reassigned workers in the first and second shifts. Union leader Joel Torres said that the company is assembling vehicles from 6:30 a.m. until 11 p.m.

"This is the right way to keep production at the assembly plant without affecting labor," he said.

No country will sell fuel to Bataan nuke plant, says research exec BAGUIO CITY, Philippines - Reviving the Bataan Nuclear Power Plant today or building new nuclear facilities would be the quickest solution to the shortage of electricity most felt in Mindanao and make power rates attractive to investors, according to Department of Energy officials here.

But no country would sell to the Philippines processed uranium and plutonium to fuel these plants because the country's atomic energy laws and safety regulations are outdated and do not pass world nuclear energy standards, said Dr. Vangeline Parami, acting chief of nuclear regulations, licensing and safeguards of the Philippine Nuclear Research Institute (PNRI).

Bill McKibben - Vermont: Neighbors and Online Networks The genius of the system flows from the ways it's unlike the rest of the Web. Instead of going global, each forum is limited to a neighborhood of about 400 homes. Instead of the anonymity that lets Internet users happily flame one another, all the folks participating in these forums clearly identify themselves. "I designed it to be as simple as possible--to use plain-text e-mail, so that everyone can take part," Wood-Lewis explains. "I just heard from an 80-year-old grandmother who'd signed up. She said, 'We've been here 50 years, but all the people we know have moved away, and we want to stay connected.' That's the kind of person we want to serve."

The biggest difference between Front Porch Forum and the rest of the Web, though, is that its ultimate goal is to get you out from in front of the screen and into the world around you. "The real feedback loop is on the main street of town," says Erik Filkorn, in his eighth year on the select board in Richmond, Vermont. "You'll be coming out of the store and someone will say, 'Hey Erik, I saw the thing you wrote. Here's what I think.' You're not just creating an avatar and hanging out in a singles bar in Second Life -- not that I would do that. But this is very much grounded in the flesh-and-blood community."

Rapid Rise in Seed Prices Draws U.S. Scrutiny During the depths of the economic crisis last year, the prices for many goods held steady or even dropped. But on American farms, the picture was far different, as farmers watched the price they paid for seeds skyrocket. Corn seed prices rose 32 percent; soybean seeds were up 24 percent.

IEA Raises 2010 Oil Demand Estimate on Developing Economies (Bloomberg) -- The International Energy Agency raised its forecast for global oil demand this year for a second month as fuel consumption in Asia rises more than expected.

The IEA increased its estimate for world demand in 2010 by 70,000 barrels a day to 86.6 million barrels a day. That would mean a gain of 1.6 million barrels a day, or 1.8 percent, from 2009 levels, it said. Economies outside the Organization for Economic Cooperation and Development continue to lead the recovery in consumption, the IEA said.

“Global oil demand resumed growth on a yearly basis in the fourth quarter of 2009 after five consecutive quarters of decline,” the Paris-based agency said in its monthly oil market report today. “This year’s global oil demand growth will be driven entirely by non-OECD countries, with non-OECD Asia alone representing over half of total growth.”

Oil above $82 after IEA raises demand forecasts Oil prices moved above $82 a barrel Friday after the International Energy Agency brightened its outlook for world demand, predicting a surge in Asian economic activity will make up for a fall in developed countries.

Crude Oil May Decline on Ample Inventories, Survey Shows (Bloomberg) -- Crude oil may fall next week on rising U.S. inventories and speculation that demand will decrease next month, a Bloomberg News survey showed.

Twenty-three of 50 analysts, or 46 percent, said oil will decline through March 19. Fourteen respondents, or 28 percent, predicted that futures will increase and 13 said there will be little change in prices. Last week analysts were split, with 38 percent of those surveyed forecasting a gain and an equal number looking for a drop.

BHP, Anglo, Xstrata Ship Coal 10,000 Miles on China Price Surge (Bloomberg) -- BHP Billiton Plc, Anglo American Plc and Xstrata Plc are shipping coal 10,000 miles to China from their Cerrejon mine in Colombia for the first time this year because of surging demand and rising prices in Asia.

Cerrejon, the world’s largest open-pit mine of coal for export, started sending coal shipments through the Panama Canal to China after prices became “much better” than those in Europe, Leon Teicher, the venture’s chief executive officer, said in an interview. Cerrejon may also make its first sales to India this year, he said.

Here's Why Peak Demand For Oil Is Still Very Far Away EIA Washington produces a ton of energy data that’s very current and detailed on global energy production. But what’s harder to come by is Non-OECD oil and oil product consumption. As the calendar turns to March, alot of the annual data starts to complete for the prior years, and I found my way deep into some EIA caverns tonight, and drew up the following chart.

Shell May Raise Arrow Energy Offer, RBS Morgans Says (Bloomberg) -- Royal Dutch Shell Plc and PetroChina Co. may need to increase their offer by as much as 55 Australian cents a share to A$3.7 billion ($3.4 billion) to acquire Arrow Energy Ltd., said an analyst at RBS Morgans.

Exxon's growing reliance on expensive oil NEW YORK (CNNMoney.com) -- Exxon Mobil outlined plans Thursday that rely heavily on oil from tough to reach places, extracting it from the depths of the ocean, the frozen Arctic and the tar sands in Canada's frozen tundra.

But oil pumped in these places tends to be much more expensive than oil from more conventional sources.

Eni Expects Refining Profit in 2012, to Grow Dividend (Bloomberg) -- Eni SpA, Italy’s largest oil and gas company, expects refining to return to profit from 2012 after boosting sales and efficiency. It forecast dividend growth from 2011.

Petrofac Targets Iraq Oil After Asfari Raises Value (Bloomberg) -- Ayman Asfari, the chief executive officer whose oil and gas engineering skills guided a fourfold increase in the value of Petrofac Plc within five years, is now preparing to tap Iraq’s energy boom.

Iraq, with estimated reserves of 115 billion barrels of oil, the world’s third-largest, is set to ramp up production as companies including BP Plc, Royal Dutch Shell Plc and Exxon Mobil Corp. spend as much as $100 billion to develop fields awarded in contracts last year. A good chunk of that will go to contractors including Petrofac and larger U.S. rivals Baker Hughes Inc. and Halliburton Co.

South Africa Says Eskom’s World Bank Loan Plan Is Misunderstood (Bloomberg) -- South Africa defended state-owned power utility Eskom Holdings Ltd.’s plan to borrow at least $3.75 billion from the World Bank and said critics misunderstand its purpose.

“We are concerned that the issues related to the loan have not been properly understood,” Public Enterprises Minister Barbara Hogan said in an e-mailed copy of speech given to reporters in Pretoria today. “We are also concerned at the level of misunderstanding regarding our commitment to a transition to a low-carbon economy.”

South Africa says can't meet power needs without loan PRETORIA (Reuters) - South Africa will be unable to meet its power supply requirements if its application for a $3.75 billion loan from the World Bank is not approved, Energy Minister Dipuo Peters said on Friday.

Sinopec Changling Refinery Incur Losses on Oil Costs (Bloomberg) -- China Petroleum & Chemical Corp.’s Changling refinery in the central province of Hunan incurred losses in March as crude costs rose, the plant’s general manager Li Hua told reporters in Beijing.

The plant will break even if the price of crude is at between $70 and $75 a barrel, he said today.

Tesoro may halt refining in Hawaii The owner of the state's largest oil refinery is studying whether it should stop refining crude oil here and use the site as a terminal from which to distribute fuel.

"It lost money last year and it's continuing to lose money this year," said Lynn Westfall, senior vice president and chief economist for refinery owner Tesoro Corp. "It's something we're concerned about and are looking at."

Tesoro, like other refiners, has been squeezed by high crude oil prices at a time when demand has been dropping. Tesoro's 93,500-barrel-a-day refinery last year operated well below capacity, averaging only 68,200 barrels.

Exxon chief doubts natural gas in cars is viable move Exxon Mobil Corp. chief executive Rex Tillerson, it seems, has not joined the T. Boone Pickens army.

Pickens has been stumping for the past two years for Americans to shift to natural gas as a vehicle fuel, particularly for heavy duty trucks. He says the move would help wean the U.S. off of foreign oil, support domestic natural gas, cut energy costs and reduce pollution.

Tillerson said he doubts natural gas would accomplish all of that. And he isn't just promoting his own petroleum products — he's investing billions of dollars to boost Exxon's natural gas production. He just thinks we'll need more natural gas for power generation, not for cars and trucks.

Beijingers get back on their bikes Office worker David Dai is one of a growing army of Beijing residents returning to two-wheeled transport.

But the 28-year-old does not rely on his own pedal power - like hundreds of thousands of others, he has bought an electric bike.

A New Unit for (Saved) Energy A group of scientists has proposed creating a new unit for avoided electricity use, named for Arthur Rosenfeld.

Road fatalities curve sharply down WASHINGTON — Traffic deaths in the USA last year fell to levels not seen since 1954, and the fatality rate was the lowest since the federal government began tracking it in 1966, the Department of Transportation said Thursday.

Highway deaths in 2009 dropped to 33,963, an 8.9% decline from 2008. Road fatalities have fallen every year since 2005, when 43,510 people died in crashes.

...Some road-safety advocates are not yet ready to celebrate. They say the high-unemployment economy is still the greatest factor behind the decline in traffic fatalities.

U.S. airlines flew fewer passengers in 2009 The number of domestic and international travelers ferried by U.S. carriers for all of 2009 dropped 5.3% from the year before, according to preliminary data released by the U.S. Department of Transportation's Bureau of Transportation Statistics.

But the planes were fuller than ever, largely because airlines cut back on flights or moved to smaller planes. U.S. carriers set a record, with flights that were on average 80.4% full systemwide in 2009, according to the report.

Home Efficiency Program Poised for Growth A widely praised program to encourage homeowners to add solar panels and make their houses more energy efficient is on the verge of a ramp-up.

The model sets out to eliminate high up-front costs — a key reason why people resist making such improvements. It does so by allowing homeowners to pay for the renovations gradually, through higher property taxes, which can also be passed on to subsequent owners if the house is sold.

Water shortages may hit northern Rockies Much of the nation may be snow-weary, but farmers and ranchers who rely on winter snowpack in the northern Rockies for irrigation during the dry months of the growing season could face water shortages this summer unless more snow arrives soon.

Wet spring and summer conditions in 2008 and 2009 helped pull the region out of a decade-long drought, but now hydrologists are once again reporting below-average mountain snowpack throughout much of the northern Rockies.

Evolution, Devolution, and Revolution Devolution in the federal sense is the return of rights to states, but for the purpose of this discussion, let us use the biological definition, that is, backward evolution, or for society, a lowering of our lifestyle. Before the Grand Recession, I would guess that less than half thought that, perhaps, our civilization had peaked and will now decline. Today, I would not be surprised if more than half of Americans have an uncomfortable feeling that the combination of Peak Oil, Global Warming and our broken government is so severe that, while our economy will soon get better, there is a distinct possibility that we might have experienced the best, and future generations, beginning with our children, will only see a decline in their future life.

Reader’s Digest “10 Things to be Thankful For” and my response First, statistics depend on who’s telling which half of the story. If you forget (or positive spin, deluding yourself) about personal/national debt, excess spending/stealing, unemployment/loss of retirement savings, poverty/malnutrition, disease, ecology issues, dwindling resources, war (all mostly in developing nations, soon to be America’s problem too) then sure you’ll feel better after reading this article, but you’ll be lying to yourself. And the two source references come from conservatives. Hmm. (The Reader's Digest article is here)

Coke's Planet-Friendly Vending Machines The kingpin of soda, Coca-Cola, is changing the face--and footprint--of the refrigeration industry by replacing its conventional fleet of vending machines with a climate-friendly model. Most vending machines rely on refrigerants known as hydrofluorocarbons (HFCs), a chemical hodgepodge that has an incredible power to cool the air. HFCs can also be 1,430 times more harmful to the climate than global warming's main culprit, carbon dioxide.

Paradoxically, Coca-Cola's new refrigerant of choice is carbon dioxide.

Italy to host Europe's biggest solar plant: company MILAN — Europe's most powerful solar power plant is set to start operations in Italy later this year, the US company building the installation on an area as large as 120 football pitches said on Thursday.

Building the world's longest ethanol pipeline (Fortune Magazine) -- John D. Rockefeller figured out a long time ago that the most efficient way to transport liquid fuels long distances wasn't on wheels but in pipelines. Today POET, the privately held Sioux Falls, S.D., company that is the country's largest producer of ethanol, and Tulsa pipeline-builder Magellan Midstream Partners are poised to make the same leap.

They want to build a $4 billion ethanol pipeline -- the first in the U.S. and the longest in the world -- linking cornfields and refineries in the upper Midwest to fuel-hungry markets on the East Coast, while boosting transport efficiency (equivalent to reducing the carbon footprint) 30% compared with rail and nearly 90% compared with trucks.

New Study Debunks Myths About Vulnerability of Amazon Rain Forests to Drought ScienceDaily — A new NASA-funded study has concluded that Amazon rain forests were remarkably unaffected in the face of once-in-a-century drought in 2005, neither dying nor thriving, contrary to a previously published report and claims by the Intergovernmental Panel on Climate Change.

Japan’s Cabinet Endorses Cap-and-Trade Climate Bill (Bloomberg) -- Japan’s Cabinet has endorsed a climate-protection draft law today that would cap industrial emissions and thrust the second-biggest economy into the $125 billion market for trading carbon credits.

Some polluters will be subject to a flat ceiling on emissions while others may face a limit per unit of production, according to a copy of the bill, distributed to reporters by the Environment Ministry today. The draft leaves open which industries will be affected.

Five Countries Fall Behind on European Renewable Energy Goals The European Commission said on Thursday that five countries were failing to meet goals for renewable energy but that they could make up their quotas by buying electricity from North Africa and the Balkans.

Fight splits backers of ballot initiative to suspend state's global warming law Ted Costa says his group, People's Advocate, has been shut out of efforts to suspend AB 32, which would force oil companies to slash emissions of greenhouse gases.

Wacky winter a signal of years to come: Climatologist From the balmy Arctic, to the open water of the St. Lawrence and snowless western fields, this winter has been the warmest and driest in Canadian record books.

Environment Canada scientists report that winter 2009/10 was 4 C above normal, making it the warmest since nationwide records were first kept in 1948. It was also the driest winter on the 63-year record, with precipitation 22 per cent below normal nationally, and down 60 per cent in parts of Alberta, Saskatchewan and Ontario.

"It's beyond shocking," David Phillips, a senior climatologist with Environment Canada, told Canwest News Tuesday. Records have been shattered from "coast to coast to coast."

A storm is coming If these new findings are correct, we may thus be living through the calm before a potential climatic storm. No-one yet knows when this period of grace will end, but it seems we may already be a decade into it. We should not count on staying shielded for much longer.

“The demands for collateral by Lehman’s lenders had direct impact on Lehman’s liquidity. Lehman’s available liquidity is central to the question of why Lehman failed.”

-Anton Valukas, the bankruptcy examiner

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Not exactly. As is so often the case, determining the precise cause of death is an exercise in subtlety, something we Americans tend to do poorly — and the media does even worse.

Consider, for example, immune deficiency diseases. What typically causes the actual death is a pneumonia or some other opportunistic infection. But there was first an underlying disease that created the condition.

So what actually kills the patient — the disease that ravages the body, destroys its naturally ability to fight off invaders, and leaves it totally vulnerable? Or whichever random infection finally does them in?

In the case of Lehman Brothers, the disease that left them vulnerable was a mad embracing of risk, the excess use of leverage, an extensive exposure to mortgage and real estate, and the enormous usage of derivatives — concurrent with a lack of intelligent risk management.

Citi and JPM were merely the opportunistic infections that came along at when Lehman’s immune system was compromised. That is why you never want to allow yourself to become that vulnerable on Wall Street.

Here’s Bloomberg:

“JPMorgan Chase & Co. and Citigroup Inc. helped cause the failure of Lehman Brothers Holdings Inc. by demanding more collateral and changing guarantee agreements, according to a court-ordered report on the biggest bankruptcy in U.S. history.”

One other thing: Based on the findings of the Bankruptcy court, we may be seeing criminal indictments for these C-level executives:

“Former Lehman Chief Executive Officer Richard Fuld, ex- Chief Financial Officer Erin Callan, former Executive Vice President Ian Lowitt and former Managing Director Christopher O’Meara certified misleading statements about the bank’s finances, according to the report. Fuld, 63, was “at least grossly negligent,” Valukas said. New York-based Lehman collapsed in September 2008 with $639 billion in assets . . .

Lehman’s executives engaged in conduct ranging from “non- culpable errors of business judgment” to “actionable balance sheet manipulation,” as they used “accounting gimmicks” to move assets off the balance sheet without disclosing that to the government, rating-agencies, investors or Lehman’s board.” (emphasis added)

Let the frog marching begin!

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Source:
JPMorgan, Citigroup Helped Cause Lehman Collapse, Report Says
Linda Sandler, Bob Van Voris and Don Jeffrey
Bloomberg, March 12 2010
http://www.bloomberg.com/apps/news?pid=20601087&sid=ab1XUybpK4Vg

Sacrifice Forward to Termination Thrash Metal

The Dow is at 10,600, the SPX is at 1150. The Russell 2000 has regained 2/3rds of its price drop.

Inquiring minds want to know: The start of something real, or a mere chep money, government induced binge?

Is the move ending or beginning? What and why do you think?

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What say ye?