...stop me if you've heard them before...(thanks Doug)
"Nuke the faggot whales for Jesus"
"If you won't pray in my school, I won't think in your church!"
29 February 2008
26 February 2008
Oil's well?
Tories reject call for carbon tax
The Harper government has rejected a new report that calls for the introduction of a levy on pollution to be coupled with a 50% income tax break for the average Canadian. The report, released on Monday by environmentalist David Suzuki and economist Mark Jaccard, who heads a consulting firm that conducted the study, suggests that a levy on greenhouse gas emissions -- also called a carbon tax -- could be phased in, generating between $53 billion and $103.1B in new revenues without increasing the tax burden of the population. "There is a lingering misconception that a carbon price is nothing more than a tax grab," the report said. "While the receipt of substantial revenue -- more than $50B per year -- accompanies any effective carbon price, the revenue is simply the byproduct of putting a price on carbon emissions." In order for the Harper government to achieve its current goal of reducing Canada's emissions to 1990 levels in about 15 years, the report -- titled Pricing Carbon: Saving Green: A carbon price to lower emissions, taxes and barriers to green technology -- suggests a carbon tax of about $40 per tonne would be required in 2010 that would rise to about $100 per tonne in 2020. "While most Canadians have to pay about $90 a tonne to dump waste at their local municipal landfill, anyone can dump thousands of tonnes of carbon into the atmosphere absolutely free of charge," the report said. "The bottom line: we must stop using our atmosphere as a free dumping ground."
A representative of Environment Minister John Baird immediately rejected Suzuki's proposal, explaining that the government would stick with its own plan to cap pollution from large industrial facilities that requires them to reduce emissions per unit of production. "The government believes that Canadian families pay enough in tax," said Baird's director of communications, Garry Keller. "They don't need another tax imposed on them, especially a $50B tax." Under the government's proposed system, a price would be set on emissions based on a market mechanism that requires companies that do not meet their targets to buy credits from companies that exceed their required reductions. The three opposition parties have rejected the approach since the targets allow sectors to increase their pollution if they are in growth.
(Vancouver Sun 080226)
I believe a carbon tax is the only way to equitably distribute responsibility for greenhouse gas emissions. Industrial sources may be the largest contributors, but individuals and families must get an idea of how much gas they release in their role as consumers in order for true change to take place. Why shouldn't citizens be culpable along with industry? If everyone's paying their fair share, then everyone will be making an effort to lower their tax burden. The Conservatives are implying that this would be additional tax to what Canadians are already paying, but in reality they would need to phase out some of the taxes already in place and substitute these losses with carbon tax gains, like the Suzuki Foundation is suggesting. Typical of the Conservatives to dismiss the notion outright without any discussions on the topic.
Oil juniors under pressure
Lost in all the noise about Big Oil profits, related bigger government demands and even bigger green expectations, is a somber trend: Canada's junior oil sector is withering, and there's doubt it will recreate itself once again. The reasons are partly demographic. Many of the wildcatters who built the exploration-focused companies populating the bottom end of the industry are reaching retirement age. But even those who could have given it another go are pessimistic they can make it under current industry conditions -- rising royalty rates in Alberta, high costs and competition for labour and services from the oilsands, little capital market support, climate-change policy, competition from cheap imports of liquefied natural gas coming from offshore. While larger companies with diversified assets can weather adverse conditions by moving elsewhere or to different plays, junior companies don't always have the choice. "A lot of guys think it's the end of an era," said Gary Leach, executive director of the Small Explorers and Producers Association of Canada. "Those who cut their teeth in the 1970s and 1980s are about ready to say 'I am done.' The junior sector is built on optimism. But right now there is more reason to be somber about the future than excited." Canada's unique junior sector, which grew in the past few decades from a unique combination of supportive regulations, capital markets and data transparency, has repeatedly reinvented itself, as busts morphed into upswings, often lead by the same groups of oilmen. This time around, "I am not seeing the startups," said Leach, lamenting government indifference. From here, "it's a big blank page." The group's membership has shrunk 20% relative to last year, or to 400 companies, from 500. Meanwhile, consolidation is continuing at a furious pace and a large number of juniors are for sale.
(National Post 080226)
I don't think the junior 'industry' will ever be the same again. The established groups are retiring and the barriers to entry are too high for new interested parties to enter the game. The oil industry will continue to consolidate - most likely this rate will skyrocket - as easy-to-find reservoirs disappear and the only way for the industry to remain profitable will be to cannibalize itself.
Big Oil embraces wind power
After years of watching the world's fastest growing energy business from the sidelines, big oil companies are playing catch-up and investing billions developing new wind power projects. "Shell and BP see wind as an increasingly important part of the energy industry," said Randall Swisher, of the American Wind Energy Association. "They want to look for new opportunities, and wind is clearly in their sights." Shell is developing a US$4 billion wind power project in the Texas panhandle. When complete it will surpass Florida Power & Light's "Horse Hollow" wind energy facility to become the biggest in the world. Not to be outdone, legendary oilman Boone Pickens announced his own wind project in the same Texas panhandle area - a project even larger than Shell's and costing $10B. Pickens, the 131st richest person in America, amassed his fortune by betting early on promising new energy sources - his largest holdings are oil sands giant Suncor, EOG Resources and Quicksilver Resources. "I have the same feelings about wind as I had about the best oil field I ever found," Pickens said in an interview. It looks like Pickens' bet on wind energy is a good one. So far in 2008, investors in renewable energy stocks have been sipping champagne while the rest of the market has been in the doldrums. Wind energy developer Nacel Energy has seen its stock jump 70% since IPO. The company announced an 80-megawatt wind power expansion January 10th - enough energy to supply 25,000 homes. Analysts have a $3.07 target on Nacel - nearly double its $1.84 close yesterday - stating the Company is undervalued compared to its peers. Also a favorite with analysts and investors is wind turbine blade supplier Zoltek. Other power producers with significant wind in their generation mix include Xcel Energy and Southern California Edison.
(PR Newswire 080226)
Good news. I think I'm going to buy shares in Nacel.
Expected US cold snap drives oil price
Crude oil rose Monday on forecasts fuel consumption will rise because of cold weather in the northern half of the US. Home-heating demand in the Northeast will be 7% above normal for the next week, said Weather Derivatives, a forecaster in Belton, MO. Inventories of distillate fuel, a category that includes heating oil and diesel, fell 2.5 million barrels last week, according to a Bloomberg News survey. "Heating demand is a bit of an issue today, which is helping heating oil and especially natural gas," said Tim Evans, an energy analyst at Citigroup Global Markets in New York. "The entire energy complex is getting a boost." Crude oil for April delivery rose US42 cents, or 0.4%, to settle at $99.23 a barrel on the New York Mercantile Exchange. Futures surged to $101.32 a barrel on Feb. 20, the highest since trading began in 1983. Prices are up 62% from a year ago. Natural gas for March delivery rose four cents to $9.186 per million British thermal units in New York, the highest closing price since Jan. 31, 2006. Prices are up 18% from a year ago. Heating oil for March delivery rose 2.23 cents, or 0.8%, to settle at $2.7853 a gallon in New York, a record close. Futures touched $2.8005, the highest intraday price since trading began in 1978.
(Calgary Herald 080226)
What's going to happen in the spring when the prices traditionally go up even more?
The Harper government has rejected a new report that calls for the introduction of a levy on pollution to be coupled with a 50% income tax break for the average Canadian. The report, released on Monday by environmentalist David Suzuki and economist Mark Jaccard, who heads a consulting firm that conducted the study, suggests that a levy on greenhouse gas emissions -- also called a carbon tax -- could be phased in, generating between $53 billion and $103.1B in new revenues without increasing the tax burden of the population. "There is a lingering misconception that a carbon price is nothing more than a tax grab," the report said. "While the receipt of substantial revenue -- more than $50B per year -- accompanies any effective carbon price, the revenue is simply the byproduct of putting a price on carbon emissions." In order for the Harper government to achieve its current goal of reducing Canada's emissions to 1990 levels in about 15 years, the report -- titled Pricing Carbon: Saving Green: A carbon price to lower emissions, taxes and barriers to green technology -- suggests a carbon tax of about $40 per tonne would be required in 2010 that would rise to about $100 per tonne in 2020. "While most Canadians have to pay about $90 a tonne to dump waste at their local municipal landfill, anyone can dump thousands of tonnes of carbon into the atmosphere absolutely free of charge," the report said. "The bottom line: we must stop using our atmosphere as a free dumping ground."
A representative of Environment Minister John Baird immediately rejected Suzuki's proposal, explaining that the government would stick with its own plan to cap pollution from large industrial facilities that requires them to reduce emissions per unit of production. "The government believes that Canadian families pay enough in tax," said Baird's director of communications, Garry Keller. "They don't need another tax imposed on them, especially a $50B tax." Under the government's proposed system, a price would be set on emissions based on a market mechanism that requires companies that do not meet their targets to buy credits from companies that exceed their required reductions. The three opposition parties have rejected the approach since the targets allow sectors to increase their pollution if they are in growth.
(Vancouver Sun 080226)
I believe a carbon tax is the only way to equitably distribute responsibility for greenhouse gas emissions. Industrial sources may be the largest contributors, but individuals and families must get an idea of how much gas they release in their role as consumers in order for true change to take place. Why shouldn't citizens be culpable along with industry? If everyone's paying their fair share, then everyone will be making an effort to lower their tax burden. The Conservatives are implying that this would be additional tax to what Canadians are already paying, but in reality they would need to phase out some of the taxes already in place and substitute these losses with carbon tax gains, like the Suzuki Foundation is suggesting. Typical of the Conservatives to dismiss the notion outright without any discussions on the topic.
Oil juniors under pressure
Lost in all the noise about Big Oil profits, related bigger government demands and even bigger green expectations, is a somber trend: Canada's junior oil sector is withering, and there's doubt it will recreate itself once again. The reasons are partly demographic. Many of the wildcatters who built the exploration-focused companies populating the bottom end of the industry are reaching retirement age. But even those who could have given it another go are pessimistic they can make it under current industry conditions -- rising royalty rates in Alberta, high costs and competition for labour and services from the oilsands, little capital market support, climate-change policy, competition from cheap imports of liquefied natural gas coming from offshore. While larger companies with diversified assets can weather adverse conditions by moving elsewhere or to different plays, junior companies don't always have the choice. "A lot of guys think it's the end of an era," said Gary Leach, executive director of the Small Explorers and Producers Association of Canada. "Those who cut their teeth in the 1970s and 1980s are about ready to say 'I am done.' The junior sector is built on optimism. But right now there is more reason to be somber about the future than excited." Canada's unique junior sector, which grew in the past few decades from a unique combination of supportive regulations, capital markets and data transparency, has repeatedly reinvented itself, as busts morphed into upswings, often lead by the same groups of oilmen. This time around, "I am not seeing the startups," said Leach, lamenting government indifference. From here, "it's a big blank page." The group's membership has shrunk 20% relative to last year, or to 400 companies, from 500. Meanwhile, consolidation is continuing at a furious pace and a large number of juniors are for sale.
(National Post 080226)
I don't think the junior 'industry' will ever be the same again. The established groups are retiring and the barriers to entry are too high for new interested parties to enter the game. The oil industry will continue to consolidate - most likely this rate will skyrocket - as easy-to-find reservoirs disappear and the only way for the industry to remain profitable will be to cannibalize itself.
Big Oil embraces wind power
After years of watching the world's fastest growing energy business from the sidelines, big oil companies are playing catch-up and investing billions developing new wind power projects. "Shell and BP see wind as an increasingly important part of the energy industry," said Randall Swisher, of the American Wind Energy Association. "They want to look for new opportunities, and wind is clearly in their sights." Shell is developing a US$4 billion wind power project in the Texas panhandle. When complete it will surpass Florida Power & Light's "Horse Hollow" wind energy facility to become the biggest in the world. Not to be outdone, legendary oilman Boone Pickens announced his own wind project in the same Texas panhandle area - a project even larger than Shell's and costing $10B. Pickens, the 131st richest person in America, amassed his fortune by betting early on promising new energy sources - his largest holdings are oil sands giant Suncor, EOG Resources and Quicksilver Resources. "I have the same feelings about wind as I had about the best oil field I ever found," Pickens said in an interview. It looks like Pickens' bet on wind energy is a good one. So far in 2008, investors in renewable energy stocks have been sipping champagne while the rest of the market has been in the doldrums. Wind energy developer Nacel Energy has seen its stock jump 70% since IPO. The company announced an 80-megawatt wind power expansion January 10th - enough energy to supply 25,000 homes. Analysts have a $3.07 target on Nacel - nearly double its $1.84 close yesterday - stating the Company is undervalued compared to its peers. Also a favorite with analysts and investors is wind turbine blade supplier Zoltek. Other power producers with significant wind in their generation mix include Xcel Energy and Southern California Edison.
(PR Newswire 080226)
Good news. I think I'm going to buy shares in Nacel.
Expected US cold snap drives oil price
Crude oil rose Monday on forecasts fuel consumption will rise because of cold weather in the northern half of the US. Home-heating demand in the Northeast will be 7% above normal for the next week, said Weather Derivatives, a forecaster in Belton, MO. Inventories of distillate fuel, a category that includes heating oil and diesel, fell 2.5 million barrels last week, according to a Bloomberg News survey. "Heating demand is a bit of an issue today, which is helping heating oil and especially natural gas," said Tim Evans, an energy analyst at Citigroup Global Markets in New York. "The entire energy complex is getting a boost." Crude oil for April delivery rose US42 cents, or 0.4%, to settle at $99.23 a barrel on the New York Mercantile Exchange. Futures surged to $101.32 a barrel on Feb. 20, the highest since trading began in 1983. Prices are up 62% from a year ago. Natural gas for March delivery rose four cents to $9.186 per million British thermal units in New York, the highest closing price since Jan. 31, 2006. Prices are up 18% from a year ago. Heating oil for March delivery rose 2.23 cents, or 0.8%, to settle at $2.7853 a gallon in New York, a record close. Futures touched $2.8005, the highest intraday price since trading began in 1978.
(Calgary Herald 080226)
What's going to happen in the spring when the prices traditionally go up even more?
24 February 2008
Cycle and cycle again
"The first panacea for a mismanaged economy is inflation. The second is war. Both bring a temporary prosperity. Both bring permanent ruin." - Ernest Hemingway
22 February 2008
Highest...price...ever...
Demand sends oil to record US$101.32
Crude oil advanced to a record US$101.32 barrel in New York on rising demand and concern inflation will erode the value of alternative investments. A weakening US dollar and increasing world demand for raw materials sent oil and commodities, including soybeans and platinum, to records this week. US Federal Reserve chairman Ben Bernanke has indicated to lawmakers the Fed will cut US interest rates if financial conditions and the availability of credit deteriorate. Crude oil for March delivery rose 73 cents, or 0.7%, to settle at $100.74 a barrel, a second consecutive record close above $100 on the New York Mercantile Exchange. Prices are up 74% from a year ago. The price of $101.32 reached Wednesday was the highest since oil futures began trading in 1983.
(Calgary Herald 080221)
Yesterday it was fears that OPEC was going to cut production rates at their next meeting (not like they can increase it....even if they say they can...), and today its about people investing in oil futures because no other investments will be as profitable due to inflation? Man, that's a new one. It sounds as if investment brokers are propping up the price due to their own devices. Talk about a speculation premium......oil is now at the highest inflation-adjusted price EVER.
Crude oil advanced to a record US$101.32 barrel in New York on rising demand and concern inflation will erode the value of alternative investments. A weakening US dollar and increasing world demand for raw materials sent oil and commodities, including soybeans and platinum, to records this week. US Federal Reserve chairman Ben Bernanke has indicated to lawmakers the Fed will cut US interest rates if financial conditions and the availability of credit deteriorate. Crude oil for March delivery rose 73 cents, or 0.7%, to settle at $100.74 a barrel, a second consecutive record close above $100 on the New York Mercantile Exchange. Prices are up 74% from a year ago. The price of $101.32 reached Wednesday was the highest since oil futures began trading in 1983.
(Calgary Herald 080221)
Yesterday it was fears that OPEC was going to cut production rates at their next meeting (not like they can increase it....even if they say they can...), and today its about people investing in oil futures because no other investments will be as profitable due to inflation? Man, that's a new one. It sounds as if investment brokers are propping up the price due to their own devices. Talk about a speculation premium......oil is now at the highest inflation-adjusted price EVER.
21 February 2008
How you can tell the end is near....
...is when political correctness gets to the point that more people find it ridiculous than effective. Case in point - the Quebec language police.
Irish pub in trouble with Quebec language cops for vintage English-only signs
Fri Feb 15, 6:27 PM
By The Canadian Press
MONTREAL - The latest language skirmish in Quebec is turning into a real brewhaha.
Quebec's language watchdog is frothing at the mouth because of unilingual-English signs in a popular downtown Irish pub that showcase beers such as "Harp" and "Caffrey."
Dean Laderoute and Rick Fon, co-owners of McKibbins Irish Pub, are inviting Jean Charest in for a pint and say they will remove any sign the premier believes violates Quebec's language laws.
The Office quebecois de la langue francaise is cracking down on the English promotional posters and paraphernalia adorning the pub's walls.
Laderoute and Fon say the posters are simply decor and do not advertise anything the pub is selling.
The pub could face fines as high as $1,500 for each infraction.
-
MONTREAL - The Office quebecois de la langue francaise is investigating a pub in downtown Montreal for English-only signs promoting Irish beers such as "Harp" and "Caffrey." Here are some other cases over the years that have attracted the interest of the language watchdog or people seeking to protect the French language:
1996:(at) - A woman warns the owner of a Quebec pet store she might get in touch with language authorities because Peekaboo, the parrot she wanted to buy, didn't speak French.
1999:(at) - The Old Navy chain is asked to rename its stores "La Vieille Riviere." It never happens.
2000:(at) - The owner of an Indian restaurant is told he's breaking the law by having coasters for "Double Diamond," a British beer.
2001:(at) Some people express disappointment that race-car driver Jacques Villeneuve calls his restaurant "Newtown."
2005:(at) Language authorities say they will investigate complaints that Montreal Mayor Gerald Tremblay's party used the word "Go" on its posters and pamphlets, as in "Go Montreal."
2007:(at) - Imperial Oil says it will keep its Quebec-only "Marche Express" name for its Esso gas stations after protests surfaced regarding a proposal to change the name to "On The Run" as they are known elsewhere in North America.
2007:(at) About 50 people protest outside a Second Cup outlet to demonstrate against the words "Les cafes" being dropped from "Les cafes Second Cup" at some of the chain's outlets.
2007:(at) Language activists decry the fact that callers to many Quebec government offices are told to "press nine" for English before instructions are delivered in French. Some of the departments have since changed the message to put English at the end.
Irish pub in trouble with Quebec language cops for vintage English-only signs
Fri Feb 15, 6:27 PM
By The Canadian Press
MONTREAL - The latest language skirmish in Quebec is turning into a real brewhaha.
Quebec's language watchdog is frothing at the mouth because of unilingual-English signs in a popular downtown Irish pub that showcase beers such as "Harp" and "Caffrey."
Dean Laderoute and Rick Fon, co-owners of McKibbins Irish Pub, are inviting Jean Charest in for a pint and say they will remove any sign the premier believes violates Quebec's language laws.
The Office quebecois de la langue francaise is cracking down on the English promotional posters and paraphernalia adorning the pub's walls.
Laderoute and Fon say the posters are simply decor and do not advertise anything the pub is selling.
The pub could face fines as high as $1,500 for each infraction.
-
MONTREAL - The Office quebecois de la langue francaise is investigating a pub in downtown Montreal for English-only signs promoting Irish beers such as "Harp" and "Caffrey." Here are some other cases over the years that have attracted the interest of the language watchdog or people seeking to protect the French language:
1996:(at) - A woman warns the owner of a Quebec pet store she might get in touch with language authorities because Peekaboo, the parrot she wanted to buy, didn't speak French.
1999:(at) - The Old Navy chain is asked to rename its stores "La Vieille Riviere." It never happens.
2000:(at) - The owner of an Indian restaurant is told he's breaking the law by having coasters for "Double Diamond," a British beer.
2001:(at) Some people express disappointment that race-car driver Jacques Villeneuve calls his restaurant "Newtown."
2005:(at) Language authorities say they will investigate complaints that Montreal Mayor Gerald Tremblay's party used the word "Go" on its posters and pamphlets, as in "Go Montreal."
2007:(at) - Imperial Oil says it will keep its Quebec-only "Marche Express" name for its Esso gas stations after protests surfaced regarding a proposal to change the name to "On The Run" as they are known elsewhere in North America.
2007:(at) About 50 people protest outside a Second Cup outlet to demonstrate against the words "Les cafes" being dropped from "Les cafes Second Cup" at some of the chain's outlets.
2007:(at) Language activists decry the fact that callers to many Quebec government offices are told to "press nine" for English before instructions are delivered in French. Some of the departments have since changed the message to put English at the end.
20 February 2008
Tapped Out
Big Oil struggles to maintain production
The world's three largest fully publicly traded oil firms are investing billions of dollars more, but there is little sign yet the extra spending is leading to higher production. ExxonMobil, Royal Dutch Shell and BP posted falling 2007 output, even though they upped capital spending to over $60 billion and some expect a further rise this year. The drop reflects the way higher oil prices reduce the amount of oil companies get under production-sharing agreements with governments, and declining supply from aging fields in some regions like the North Sea. Shell and BP plan increases of up to 14% and 16% respectively in 2008. But much of the boost is being soaked up by rising costs, as well as the drop in the US dollar. Also, it takes years to bring new fields into production, meaning the impact of higher spending on supply is some way off. "The lead time between exploration and production is about seven to eight years," said analyst Jason Kenney of ING. "So new investment today is not going to come through until 2015 in terms of production, cash flow and earnings."
Big Oil's lower output comes alongside a broader failure for supply to meet expectations in recent years, particularly outside the Organization of Petroleum Exporting Countries. Part of the reason for that, say analysts, is declining output at fields already in production, such as in the North Sea, which raises questions whether new supply will lead to an overall gain in output. In a Feb. 4 report, Citigroup said there are over 175 large new oil projects due to start up by 2012 worldwide, although it remains to be seen whether they will be enough to counteract declines elsewhere. "The fear remains that most of this supply will be offset by high levels of decline, pointing to genuine difficulties in building net production levels, particularly after 2012," the bank said.
(Calgary Herald 080220)
Finally, the oil companies are starting to realize they need to start talking the truth and quit putting their quest for profits ahead of what could be a global energy catastrophe. To top it all off, the secrecy that surrounds the OPEC nations' reserves doesn't help the situation. No one knows how much easily-accessible oil is left in the Middle East, therefore I don't know how or why the 'experts' wonder how much of the premium (as they call it) on the current price of oil is speculative and how much is truly there because of some very large unknowns. Seems pretty weird that we're 100% dependent on the stuff, yet we truly don't know with any certainty how much is left in the ground that is economically viable to extract, refine and consume.
US$100 oil adds fuel to fears on economy
Oil reached US$100 a barrel yesterday, stoking new fears that the expensive commodity will further hurt an already fragile economy in North America. However, market experts said the price of oil will likely remain high and the economic impact in Canada and the US probably won't be as severe compared with recessions in the 1980s and 1990s. The benchmark price of oil closed at just over $100 a barrel, ending the trading day at $100.01, jumping $4.51 or 4.7%. In less than 10 days, oil has increased by more than $10 a barrel — and gasoline prices in Canada have surged as well, with the average across the country jumping to $1.09 a litre yesterday, up five cents from a week earlier, according to consultancy MJ Ervin & Associates. But while high oil and gasoline prices intensify worries about a worse-than-expected recession and spiralling inflation, the prevailing sentiment yesterday was that oil prices can remain aloft even as the North American economy slows, held up by demand from countries such as China and India. “The market has realized that regardless of what happens to the US economy, the fundamental supply-demand tightness in the oil market is not going away,” said Peter Tertzakian, chief energy economist at ARC Financial in Calgary. “The emerging economies have a critical mass now, a determination to grow despite what's going on in the US.”
(Globe and Mail, Calgary Herald 080220)
How matter-of-factly. Why isn't anyone worrying about the implications of all of this? If oil continues to move up in price, doesn't that indicate that an economic recovery in North America will be all the more difficult? The only possible respite here is that the supposed recession in NA and Europe will be so severe, that demand will go down the crapper and relieve some stress on global supply. But because SE Asia's internal market is self-sustaining now (almost), we can only expect demand to continue to increase. Doesn't that mean that by the time NA and Europe get things back in order, the price could be even higher, the long-term contracts to continue the container ships could be lost to China and India, and the economic barriers to entry (because of the price of our gooey lifeblood) could make things even more difficult to get things set up in the same way again? I can only see all of this ending up very badly...
The world's three largest fully publicly traded oil firms are investing billions of dollars more, but there is little sign yet the extra spending is leading to higher production. ExxonMobil, Royal Dutch Shell and BP posted falling 2007 output, even though they upped capital spending to over $60 billion and some expect a further rise this year. The drop reflects the way higher oil prices reduce the amount of oil companies get under production-sharing agreements with governments, and declining supply from aging fields in some regions like the North Sea. Shell and BP plan increases of up to 14% and 16% respectively in 2008. But much of the boost is being soaked up by rising costs, as well as the drop in the US dollar. Also, it takes years to bring new fields into production, meaning the impact of higher spending on supply is some way off. "The lead time between exploration and production is about seven to eight years," said analyst Jason Kenney of ING. "So new investment today is not going to come through until 2015 in terms of production, cash flow and earnings."
Big Oil's lower output comes alongside a broader failure for supply to meet expectations in recent years, particularly outside the Organization of Petroleum Exporting Countries. Part of the reason for that, say analysts, is declining output at fields already in production, such as in the North Sea, which raises questions whether new supply will lead to an overall gain in output. In a Feb. 4 report, Citigroup said there are over 175 large new oil projects due to start up by 2012 worldwide, although it remains to be seen whether they will be enough to counteract declines elsewhere. "The fear remains that most of this supply will be offset by high levels of decline, pointing to genuine difficulties in building net production levels, particularly after 2012," the bank said.
(Calgary Herald 080220)
Finally, the oil companies are starting to realize they need to start talking the truth and quit putting their quest for profits ahead of what could be a global energy catastrophe. To top it all off, the secrecy that surrounds the OPEC nations' reserves doesn't help the situation. No one knows how much easily-accessible oil is left in the Middle East, therefore I don't know how or why the 'experts' wonder how much of the premium (as they call it) on the current price of oil is speculative and how much is truly there because of some very large unknowns. Seems pretty weird that we're 100% dependent on the stuff, yet we truly don't know with any certainty how much is left in the ground that is economically viable to extract, refine and consume.
US$100 oil adds fuel to fears on economy
Oil reached US$100 a barrel yesterday, stoking new fears that the expensive commodity will further hurt an already fragile economy in North America. However, market experts said the price of oil will likely remain high and the economic impact in Canada and the US probably won't be as severe compared with recessions in the 1980s and 1990s. The benchmark price of oil closed at just over $100 a barrel, ending the trading day at $100.01, jumping $4.51 or 4.7%. In less than 10 days, oil has increased by more than $10 a barrel — and gasoline prices in Canada have surged as well, with the average across the country jumping to $1.09 a litre yesterday, up five cents from a week earlier, according to consultancy MJ Ervin & Associates. But while high oil and gasoline prices intensify worries about a worse-than-expected recession and spiralling inflation, the prevailing sentiment yesterday was that oil prices can remain aloft even as the North American economy slows, held up by demand from countries such as China and India. “The market has realized that regardless of what happens to the US economy, the fundamental supply-demand tightness in the oil market is not going away,” said Peter Tertzakian, chief energy economist at ARC Financial in Calgary. “The emerging economies have a critical mass now, a determination to grow despite what's going on in the US.”
(Globe and Mail, Calgary Herald 080220)
How matter-of-factly. Why isn't anyone worrying about the implications of all of this? If oil continues to move up in price, doesn't that indicate that an economic recovery in North America will be all the more difficult? The only possible respite here is that the supposed recession in NA and Europe will be so severe, that demand will go down the crapper and relieve some stress on global supply. But because SE Asia's internal market is self-sustaining now (almost), we can only expect demand to continue to increase. Doesn't that mean that by the time NA and Europe get things back in order, the price could be even higher, the long-term contracts to continue the container ships could be lost to China and India, and the economic barriers to entry (because of the price of our gooey lifeblood) could make things even more difficult to get things set up in the same way again? I can only see all of this ending up very badly...
19 February 2008
Technologically exhaustive?
18 influential thinkers were chosen to identify the great technological challenges facing humanity in the 21st century by the US National Academy of Engineering.
The experts include Ray Kurzweil, Google founder Larry Page and genome pioneer Dr Craig Venter.
The 14 challenges were announced at the annual meeting of the American Association for the Advancement of Science in Boston, which concluded on Monday.
CHALLENGES FACING HUMANITY IN THE 21ST CENTURY
- Make solar energy affordable
- Provide energy from fusion
- Develop carbon sequestration
- Manage the nitrogen cycle
- Provide access to clean water
- Reverse engineer the brain
- Prevent nuclear terror
- Secure cyberspace
- Enhance virtual reality
- Improve urban infrastructure
- Advance health informatics
- Engineer better medicines
- Advance personalised learning
- Explore natural frontiers
The experts include Ray Kurzweil, Google founder Larry Page and genome pioneer Dr Craig Venter.
The 14 challenges were announced at the annual meeting of the American Association for the Advancement of Science in Boston, which concluded on Monday.
CHALLENGES FACING HUMANITY IN THE 21ST CENTURY
- Make solar energy affordable
- Provide energy from fusion
- Develop carbon sequestration
- Manage the nitrogen cycle
- Provide access to clean water
- Reverse engineer the brain
- Prevent nuclear terror
- Secure cyberspace
- Enhance virtual reality
- Improve urban infrastructure
- Advance health informatics
- Engineer better medicines
- Advance personalised learning
- Explore natural frontiers
Markets gone mad
Wheat market gone wild
Driven by fears of shortage, the price per bushel has shattered records.
BY TOM WEBB
Pioneer Press
Article Last Updated: 02/16/2008 12:08:04 AM CST
Decades from now, farmers will still talk about this week - the moment when wheat in Minneapolis soared to nearly $20 a bushel.
Like a 100-year flood, spring wheat prices have risen relentlessly all winter, obliterating every record in sight. At the Minneapolis Grain Exchange, wheat fever pushed prices to $19.80 a bushel in trading Friday - nearly triple the record from 1996.
To grain experts, it's a warning of what happens when grain supplies don't keep up with rising demand. Fear of scarcity and shortage push markets far beyond any norm.
"This wheat market has given us a glimpse of the what-if - what if we don't deliver the goods on the production side, because the demand is here," warned Ed Usset, a grain marketing specialist at the University of Minnesota.
For the past month, the hottest market in the nation has been the Minneapolis Grain Exchange, the nation's center for trading spring wheat futures. The high-protein wheat that farmers grow in Minnesota and the Dakotas is prized for making bread, but poor crops worldwide have left wheat supplies at a 60-year low.
The impact of that shortage reaches far beyond the wheat trading pit in Minneapolis. Trading in Minneapolis has supercharged wheat markets in Chicago and Kansas City, Mo., as well. That has pushed corn and soybean prices to near-record levels - fueling a wave of uncertainty about everything from food price inflation to subsidies in the new farm bill to hunger in the developing world.
"Minneapolis, that's where this is all coming from, the shortage of the actual physical supply of spring wheat and durum," said Elaine Kub, a commodity market analyst at DTN. She suspects grain prices elsewhere will retreat, but there's little question about the clamor for spring wheat.
"People are desperate," Kub said. "You definitely heard stories from out in the country of elevators offering $20 a bushel and getting no sellers. ... You hear people tossing around the words 'wheat hoarding.' "
For decades, agriculture's great problem has been surplus, not scarcity. And ruinously low prices, not ruinously high ones. Farmers have complained bitterly about this, but consumers benefitted from the great abundance of grains and proteins. This week's action in Minneapolis previews a different sort of marketplace.
"It's telling us how close we are to that tipping point in all commodities," said Usset, a former grain trader. "Every commodity I know would like more acres: corn needs more, soybeans need more ... durum wheat, malt barley, sunflowers, they all want a little more production."
The Minneapolis Grain Exchange itself is scrambling to adjust to the explosive markets. On Friday, the maximum daily trading limit rose to $1.35 a bushel - compared with 30 cents last week - and soon, the maximum daily limit will vanish. Officials suggested they had little choice. Markets were so volatile that they locked up day after day, so nobody could trade wheat futures at all.
"Whenever you have set caps, even if they're for good intentions to help protect certain people from abnormal price swings, you're going to run into others who are affected because you have those price caps," said Layne Carlson, treasurer of the Minneapolis Grain Exchange.
On Friday, for the first time in 12 trading sessions, the March wheat contract did not close up the maximum daily trading limit. Because of the higher limits, it closed at $19.35 a bushel, up 82 cents. The return of regular trading to the wheat pit may signal an end to the greatest run-up in wheat history, with wheat prices rising fourfold in a single year.
For farmers, that puts the 2008 Minneapolis wheat market atop the list of legendary bull markets. There haven't been many: the 1970s boom fueled by Russian exports, the drought-stressed corn market of 1988, the grain spike of 1996 and the soybean market of 2004.
"Absolutely, this is one for the record books, make no mistake about it," Usset said. "This will be talked about."
Tom Webb can be reached at twebb@pioneerpress.com or 651-228-5428.
Driven by fears of shortage, the price per bushel has shattered records.
BY TOM WEBB
Pioneer Press
Article Last Updated: 02/16/2008 12:08:04 AM CST
Decades from now, farmers will still talk about this week - the moment when wheat in Minneapolis soared to nearly $20 a bushel.
Like a 100-year flood, spring wheat prices have risen relentlessly all winter, obliterating every record in sight. At the Minneapolis Grain Exchange, wheat fever pushed prices to $19.80 a bushel in trading Friday - nearly triple the record from 1996.
To grain experts, it's a warning of what happens when grain supplies don't keep up with rising demand. Fear of scarcity and shortage push markets far beyond any norm.
"This wheat market has given us a glimpse of the what-if - what if we don't deliver the goods on the production side, because the demand is here," warned Ed Usset, a grain marketing specialist at the University of Minnesota.
For the past month, the hottest market in the nation has been the Minneapolis Grain Exchange, the nation's center for trading spring wheat futures. The high-protein wheat that farmers grow in Minnesota and the Dakotas is prized for making bread, but poor crops worldwide have left wheat supplies at a 60-year low.
The impact of that shortage reaches far beyond the wheat trading pit in Minneapolis. Trading in Minneapolis has supercharged wheat markets in Chicago and Kansas City, Mo., as well. That has pushed corn and soybean prices to near-record levels - fueling a wave of uncertainty about everything from food price inflation to subsidies in the new farm bill to hunger in the developing world.
"Minneapolis, that's where this is all coming from, the shortage of the actual physical supply of spring wheat and durum," said Elaine Kub, a commodity market analyst at DTN. She suspects grain prices elsewhere will retreat, but there's little question about the clamor for spring wheat.
"People are desperate," Kub said. "You definitely heard stories from out in the country of elevators offering $20 a bushel and getting no sellers. ... You hear people tossing around the words 'wheat hoarding.' "
For decades, agriculture's great problem has been surplus, not scarcity. And ruinously low prices, not ruinously high ones. Farmers have complained bitterly about this, but consumers benefitted from the great abundance of grains and proteins. This week's action in Minneapolis previews a different sort of marketplace.
"It's telling us how close we are to that tipping point in all commodities," said Usset, a former grain trader. "Every commodity I know would like more acres: corn needs more, soybeans need more ... durum wheat, malt barley, sunflowers, they all want a little more production."
The Minneapolis Grain Exchange itself is scrambling to adjust to the explosive markets. On Friday, the maximum daily trading limit rose to $1.35 a bushel - compared with 30 cents last week - and soon, the maximum daily limit will vanish. Officials suggested they had little choice. Markets were so volatile that they locked up day after day, so nobody could trade wheat futures at all.
"Whenever you have set caps, even if they're for good intentions to help protect certain people from abnormal price swings, you're going to run into others who are affected because you have those price caps," said Layne Carlson, treasurer of the Minneapolis Grain Exchange.
On Friday, for the first time in 12 trading sessions, the March wheat contract did not close up the maximum daily trading limit. Because of the higher limits, it closed at $19.35 a bushel, up 82 cents. The return of regular trading to the wheat pit may signal an end to the greatest run-up in wheat history, with wheat prices rising fourfold in a single year.
For farmers, that puts the 2008 Minneapolis wheat market atop the list of legendary bull markets. There haven't been many: the 1970s boom fueled by Russian exports, the drought-stressed corn market of 1988, the grain spike of 1996 and the soybean market of 2004.
"Absolutely, this is one for the record books, make no mistake about it," Usset said. "This will be talked about."
Tom Webb can be reached at twebb@pioneerpress.com or 651-228-5428.
Can you hear the crumbling?
Yeah, this is one of those sites, but it does divulge a lot of good information and advice, for the paranoid among us. I'm in the camp that believes we're all on this ship together, so if it starts sinking I have no choice but to go down with it. Meanwhile, I've been busy getting out of debt - should be debt free by the end of the spring.
US Credit Markets Are Collapsing
http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=1453
The U.S. credit markets, the giant growth engine that powers the American economy, are collapsing ... with few credit sectors spared from damage, few investors escaping losses, and little hope of federal action that's quick or strong enough to make a major difference.
Here's what's happening ...
First and Foremost, the Fall of The Nation's Three Largest Bond Insurers Is Accelerating
This is the "Great Ratings Debacle" I highlighted last year.
And now, the critical watershed event that I said would trigger the next phase — the collapse of the bond insurers' triple-A ratings — is here in aces and spades.
Without the triple-A rating, their whole reason to exist falls by the wayside: They cannot enhance the credit of bond issuers. They cannot do more business. They may as well close their doors and go home.
The facts:
* Financial Guarantee Insurance Co. (FGIC), the nation's third largest, just lost its triple-A rating last week. Moody's literally gutted its rating by a full six notches in one fell swoop.
* At the same time, Moody's warned that unless FGIC can raise the needed capital, it's ready to cut FGIC's rating to a hair above junk.
* To underscore that it means business, Moody's has already downgraded FGIC's senior debt to junk, threatening to drop it to deeper junk.
* Ambac's triple-A rating was zapped by all three major rating agencies in late January.
* Next, MBIA is on the chopping block, slated to lose its triple-A rating within a matter of days.
All three of the largest bond insurers are engulfed in the mess. And all three are trapped between two major business lines — their traditional business of insuring municipal bonds against default, which is supposedly still stable ... and their newer business of insuring mortgage- and debt-backed securities, which is in total disarray.
Meanwhile, the nation's banks and other big investors — the last hope for bond insurers — have so far failed to come forward with the needed capital.
So, in a surprise announcement on Friday, New York Governor Eliot Spitzer threatened to intervene with massive, radical action. He said he would take over the two bond insurers which are regulated by New York State — MBIA and Ambac - strip out all their supposedly good assets (insurance policies covering municipal securities), pack away those assets in newly formed separate companies, and leave behind strictly the bad assets (polices covering the disaster-plagued mortgage and debt sectors).
The bankers were shocked and dismayed. Instead of being the first to hear the news as part of their intense, ongoing discussions with New York State regulators, they heard about it on CNBC. And instead of responding with fear and remorse, their primary reaction is anger and rebellion.
What's next? Follow along with me, and you'll see that, like four different pathways engulfed by the same forest fire, all four likely scenarios lead to essentially the same result: Credit collapse.
Scenario A - Bank Rescue
Despite their instincts not to get dragged into the morass, bankers and other investors come through with 11th-hour capital infusions for the bond insurers.
Consequences: The banks take a big step closer to insolvency, creating an even broader threat to the financial system.
Reason: The true liabilities of the bond insurers are incalculable. The potential exposure to losses is virtually unlimited. And before the bond insurance crisis, the banks were already buckling under their subprime mortgage losses.
Scenario B - No Rescues, No Takeovers
The banks stay out. But despite his warnings, Spitzer fails to move forward promptly to take over the bond insurers.
Consequences: The current downward spiral of the bond insurers continues unabated. MBIA, the last of the Big Three to be downgraded, loses its triple-A rating. FGIC is downgraded to junk; Ambac, to near junk. The $2.6 trillion municipal bond market virtually dies.
Reason: When the bond insurers are downgraded, the hundreds of thousands of municipal bonds they cover are automatically downgraded — a ratings collapse that's so massive, it can shut off the credit spigot to all city and state governments, whether insured or not.
Scenario C - New York State Takes Over
Spitzer acts this week to take over MBIA and Ambac, promptly splitting them in half and creating new companies for each. According to plan, the pre-existing bond insurers are stuck holding the sick insurance business; the new companies get the supposedly healthy insurance business.
Consequences: The existing bond insurers are immediately downgraded to deep junk, and that's generous. By all reasonable measures, they are insolvent from day one. And any floating ships still remaining in the market for mortgage- and debt-backed securities are sunk.
Meanwhile, local governments are the winners. But it's a pyrrhic victory.
Reason: The municipal bond market isn't in trouble just because of what's happening to the bond insurers. It's also in trouble because municipal governments all over the country are suffering falling property values — and falling property tax revenues.
By sacrificing mortgage securities for the sake of protecting municipal securities, Spitzer doesn't do local governments any long-term favors. They depend on a healthy mortgage and real estate market to sustain their own finances. When mortgages and real estate go down, so do they.
Scenario D - Federal Bailout
The federal government steps in to bail out the bond insurers — either with or without the plan Spitzer's proposing. The hope is that the good credit of the U.S. Treasury uplifts the bad credit of the insurers.
Consequences: Precisely the opposite happens. The bad credit of the bond insurers — and their boundless exposure to defaulting mortgages — drags down the good credit of the U.S. Treasury.
Treasury notes and bonds fall in price, while their yields rise. And since 10-year Treasury-note yields are closely tied to the rates on 30-year fixed mortgages, rather than supporting the housing market, the federal government inadvertently drives it into a deeper hole with a spike in interest rates.
Reason: The sheer volume of mortgages outstanding in America is far bigger than the volume of U.S. Treasuries.
Moreover, with $150 billion being spent on the economic stimulus package, with inevitably huge federal deficits in a recession, and with looming seas of red ink in Medicare ... the U.S. Treasury Department's long-term credit is not exactly fool-proof.
Bottom line: There's no scenario that ends in a soft landing for the bond insurers. The underlying assets are rotten. The credit markets are sour. And no type of bailout — public or private — can cover up the stench.
Meanwhile ...
At Least Five More Credit Market Sectors Are Now Collapsing
You've no doubt heard about the disasters in subprime mortgages, Alt-A (intermediate quality) mortgages, prime mortgages, credit cards, auto loans and student loans.
Now, brace yourself for five more credit sectors that are falling victim to collapse:
The nation's largest mortgage insurers — responsible for protecting lenders and investors from defaults on millions of homes — are being ravaged by losses. MGIC Investment Corp., swamped with claims, just posted a $1.47 billion loss. Triad Guaranty, a much smaller mortgage insurer, reported a $75 million loss.
Municipalities, public hospitals and other institutions have been slammed by the failure of nearly 1,000 auctions for their "auction-rate" securities. Their borrowing costs have tripled and quadrupled — to 15%, 20%, even 30%. Survival money is drying up.
Low-rated corporate bonds, which had fueled a wave of leveraged corporate buyouts in recent years, are being abandoned by investors. Their prices are plunging to the lowest levels in history. Property and casualty insurers, among those loaded with corporate bonds, are taking it on the chin.
More hedge funds are getting slammed. CSO Partners, for example, has lost so much money and suffered such a massive run on its assets, its manager (Citigroup) was recently forced to shut the hedge fund's doors to further withdrawals by investors.
Commercial real estate credit is collapsing. Regional and super-regional banks are taking big hits. Life and health insurance companies will get smacked.
Even some sectors of the short-term money markets are affected. Treasury-only money funds are safe. But beware of money funds that put your money in commercial paper, CDs and other non-Treasury instruments.
The End of an Era
This is no longer just one institution in trouble — like Long Term Credit Management, which threatened to shatter the financial markets in 1998.
Nor is it just a crisis in one corner of the credit markets — like the near collapse of Penn Central Railroad and Chrysler in 1970 ... the collapse of Franklin National Bank in 1974 ... the junk bond debacle of 1989-90, the S&L crisis of the 1980s or the insurance company failures of the early 1990s.
No. This has all the earmarks of a sweeping and devastating credit paralysis that threatens to end decades of U.S. economic expansion.
We will survive. It is not the end of the world. And there are practical, prudent strategies immediately available to protect yourself.
But for most Americans, the credit collapse will bring about a rapid transition that is both terrifying and traumatic — a shocking shift from growth to contraction ... reckless spending to forced thrift ... wealth to poverty.
My mission is to make sure you're not among them; to help you join a growing minority of foresighted individuals who are building their wealth through the worst of times, keeping it safe, and preparing for the future day when they can invest it in some of the greatest bargains of our time.
Your goal: To do well, but also to do good — to be one of the few who can accumulate a treasure-trove of liquid resources for yourself ... and also join those with the courage and means to pick up the pieces later, trigger a lasting rally from the bottom, and ultimately help lead the nation on the path to a true recovery.
Take These Urgent Steps! It Could Be Your Last Chance!
We told you to get the heck out of danger over a year ago. If you haven't, it's not too late to do so now, provided you act immediately ...
Step 1. Get up to speed on what's going on...for real.
Step 2. Get rid of bonds and mortgages: Don't wait for the next shoe to drop in the credit markets. Get out of all fixed instruments that could be seriously impacted, including Mortgages and mortgage-backed securities, regardless of duration and rating
Corporate bonds, whether rated "junk" and already collapsing or investment grade on the verge of becoming junk Tax-exempt municipal and state securities, whether high grade or low grade, short term or long term, insured or not Money market funds that invest in bank deposits, banker's acceptances, commercial paper, or short-term tax-exempt securities. Any other instrument invested in the now-uncertain future of the U.S. credit markets
Step 3. Sell real estate: Don't get stuck with sinking properties just because you can't get the price you hoped for. If you're selling your home, price it like you mean it. Instead of cutting your price in dribs and drabs and always trailing the market, cut it aggressively now. If you're looking for a new home, rent for now if possible. If that's not a viable alternative and you must buy now on credit, favor a 30-year fixed-rate loan. But make sure you have enough cash for a decent down payment. If you invest in commercial property, get out now while the market is still not far from its peak. Commercial property valuations got nutty during the recent boom, while capitalization rates plunged sharply. It's going to take a sizable drop in property values to get the cap rates back up to anything near normal.
Sell REITs. The recession will drive vacancy rates up and absorption rates down, while keeping a lid on rents, especially in the office and retail sectors. If you are still exposed to the risk of falling real estate — whether residential or commercial — seriously consider a protective hedge, using the UltraShort Real Estate ProShares.
Step 4. Get out of bank, brokerage and insurance company stocks: Use any Fed-inspired rally to sell. Don't let big names lull you into complacency. Stocks like Merrill Lynch, Capital One Financial, Washington Mutual and AIG could actually be among the most vulnerable. If you cannot sell, at least consider buying some protection with an inverse ETF that's tied to the financial industry, such as the UltraShort Financials ProShares.
Step 5. Unload other stocks: Use rallies to sell retail stocks, semiconductors, transportation stocks, Dow stocks and most S&P stocks.
Some investors protest: "I can't sell now. I can't afford to take the loss." My answer: If your stock portfolio is in the red, you've already taken the loss. Remember — the value of your brokerage account is marked to market every day. It doesn't distinguish between paper losses and realized losses, and you shouldn't either.
Other investors say: "But, I can't sell now. I can't afford to take the profit and pay the taxes." My answer: Your true net worth is always after taxes. So avoiding taking profits now buys you little. Better to write a big check to Uncle Sam on your profits than to write no check due to losses.
Step 6. Build cash: As you do this, park it in the one place that is still the single safest in the world — 3-month Treasury bills or Treasury-only money market funds.
Step 7. Buy hedges against inflation: To the degree that the Fed and Congress throw more money at the credit collapse, inflation will be a continuing — and growing — danger. So stick with your inflation hedges.
And above all, stay safe!
US Credit Markets Are Collapsing
http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=1453
The U.S. credit markets, the giant growth engine that powers the American economy, are collapsing ... with few credit sectors spared from damage, few investors escaping losses, and little hope of federal action that's quick or strong enough to make a major difference.
Here's what's happening ...
First and Foremost, the Fall of The Nation's Three Largest Bond Insurers Is Accelerating
This is the "Great Ratings Debacle" I highlighted last year.
And now, the critical watershed event that I said would trigger the next phase — the collapse of the bond insurers' triple-A ratings — is here in aces and spades.
Without the triple-A rating, their whole reason to exist falls by the wayside: They cannot enhance the credit of bond issuers. They cannot do more business. They may as well close their doors and go home.
The facts:
* Financial Guarantee Insurance Co. (FGIC), the nation's third largest, just lost its triple-A rating last week. Moody's literally gutted its rating by a full six notches in one fell swoop.
* At the same time, Moody's warned that unless FGIC can raise the needed capital, it's ready to cut FGIC's rating to a hair above junk.
* To underscore that it means business, Moody's has already downgraded FGIC's senior debt to junk, threatening to drop it to deeper junk.
* Ambac's triple-A rating was zapped by all three major rating agencies in late January.
* Next, MBIA is on the chopping block, slated to lose its triple-A rating within a matter of days.
All three of the largest bond insurers are engulfed in the mess. And all three are trapped between two major business lines — their traditional business of insuring municipal bonds against default, which is supposedly still stable ... and their newer business of insuring mortgage- and debt-backed securities, which is in total disarray.
Meanwhile, the nation's banks and other big investors — the last hope for bond insurers — have so far failed to come forward with the needed capital.
So, in a surprise announcement on Friday, New York Governor Eliot Spitzer threatened to intervene with massive, radical action. He said he would take over the two bond insurers which are regulated by New York State — MBIA and Ambac - strip out all their supposedly good assets (insurance policies covering municipal securities), pack away those assets in newly formed separate companies, and leave behind strictly the bad assets (polices covering the disaster-plagued mortgage and debt sectors).
The bankers were shocked and dismayed. Instead of being the first to hear the news as part of their intense, ongoing discussions with New York State regulators, they heard about it on CNBC. And instead of responding with fear and remorse, their primary reaction is anger and rebellion.
What's next? Follow along with me, and you'll see that, like four different pathways engulfed by the same forest fire, all four likely scenarios lead to essentially the same result: Credit collapse.
Scenario A - Bank Rescue
Despite their instincts not to get dragged into the morass, bankers and other investors come through with 11th-hour capital infusions for the bond insurers.
Consequences: The banks take a big step closer to insolvency, creating an even broader threat to the financial system.
Reason: The true liabilities of the bond insurers are incalculable. The potential exposure to losses is virtually unlimited. And before the bond insurance crisis, the banks were already buckling under their subprime mortgage losses.
Scenario B - No Rescues, No Takeovers
The banks stay out. But despite his warnings, Spitzer fails to move forward promptly to take over the bond insurers.
Consequences: The current downward spiral of the bond insurers continues unabated. MBIA, the last of the Big Three to be downgraded, loses its triple-A rating. FGIC is downgraded to junk; Ambac, to near junk. The $2.6 trillion municipal bond market virtually dies.
Reason: When the bond insurers are downgraded, the hundreds of thousands of municipal bonds they cover are automatically downgraded — a ratings collapse that's so massive, it can shut off the credit spigot to all city and state governments, whether insured or not.
Scenario C - New York State Takes Over
Spitzer acts this week to take over MBIA and Ambac, promptly splitting them in half and creating new companies for each. According to plan, the pre-existing bond insurers are stuck holding the sick insurance business; the new companies get the supposedly healthy insurance business.
Consequences: The existing bond insurers are immediately downgraded to deep junk, and that's generous. By all reasonable measures, they are insolvent from day one. And any floating ships still remaining in the market for mortgage- and debt-backed securities are sunk.
Meanwhile, local governments are the winners. But it's a pyrrhic victory.
Reason: The municipal bond market isn't in trouble just because of what's happening to the bond insurers. It's also in trouble because municipal governments all over the country are suffering falling property values — and falling property tax revenues.
By sacrificing mortgage securities for the sake of protecting municipal securities, Spitzer doesn't do local governments any long-term favors. They depend on a healthy mortgage and real estate market to sustain their own finances. When mortgages and real estate go down, so do they.
Scenario D - Federal Bailout
The federal government steps in to bail out the bond insurers — either with or without the plan Spitzer's proposing. The hope is that the good credit of the U.S. Treasury uplifts the bad credit of the insurers.
Consequences: Precisely the opposite happens. The bad credit of the bond insurers — and their boundless exposure to defaulting mortgages — drags down the good credit of the U.S. Treasury.
Treasury notes and bonds fall in price, while their yields rise. And since 10-year Treasury-note yields are closely tied to the rates on 30-year fixed mortgages, rather than supporting the housing market, the federal government inadvertently drives it into a deeper hole with a spike in interest rates.
Reason: The sheer volume of mortgages outstanding in America is far bigger than the volume of U.S. Treasuries.
Moreover, with $150 billion being spent on the economic stimulus package, with inevitably huge federal deficits in a recession, and with looming seas of red ink in Medicare ... the U.S. Treasury Department's long-term credit is not exactly fool-proof.
Bottom line: There's no scenario that ends in a soft landing for the bond insurers. The underlying assets are rotten. The credit markets are sour. And no type of bailout — public or private — can cover up the stench.
Meanwhile ...
At Least Five More Credit Market Sectors Are Now Collapsing
You've no doubt heard about the disasters in subprime mortgages, Alt-A (intermediate quality) mortgages, prime mortgages, credit cards, auto loans and student loans.
Now, brace yourself for five more credit sectors that are falling victim to collapse:
The nation's largest mortgage insurers — responsible for protecting lenders and investors from defaults on millions of homes — are being ravaged by losses. MGIC Investment Corp., swamped with claims, just posted a $1.47 billion loss. Triad Guaranty, a much smaller mortgage insurer, reported a $75 million loss.
Municipalities, public hospitals and other institutions have been slammed by the failure of nearly 1,000 auctions for their "auction-rate" securities. Their borrowing costs have tripled and quadrupled — to 15%, 20%, even 30%. Survival money is drying up.
Low-rated corporate bonds, which had fueled a wave of leveraged corporate buyouts in recent years, are being abandoned by investors. Their prices are plunging to the lowest levels in history. Property and casualty insurers, among those loaded with corporate bonds, are taking it on the chin.
More hedge funds are getting slammed. CSO Partners, for example, has lost so much money and suffered such a massive run on its assets, its manager (Citigroup) was recently forced to shut the hedge fund's doors to further withdrawals by investors.
Commercial real estate credit is collapsing. Regional and super-regional banks are taking big hits. Life and health insurance companies will get smacked.
Even some sectors of the short-term money markets are affected. Treasury-only money funds are safe. But beware of money funds that put your money in commercial paper, CDs and other non-Treasury instruments.
The End of an Era
This is no longer just one institution in trouble — like Long Term Credit Management, which threatened to shatter the financial markets in 1998.
Nor is it just a crisis in one corner of the credit markets — like the near collapse of Penn Central Railroad and Chrysler in 1970 ... the collapse of Franklin National Bank in 1974 ... the junk bond debacle of 1989-90, the S&L crisis of the 1980s or the insurance company failures of the early 1990s.
No. This has all the earmarks of a sweeping and devastating credit paralysis that threatens to end decades of U.S. economic expansion.
We will survive. It is not the end of the world. And there are practical, prudent strategies immediately available to protect yourself.
But for most Americans, the credit collapse will bring about a rapid transition that is both terrifying and traumatic — a shocking shift from growth to contraction ... reckless spending to forced thrift ... wealth to poverty.
My mission is to make sure you're not among them; to help you join a growing minority of foresighted individuals who are building their wealth through the worst of times, keeping it safe, and preparing for the future day when they can invest it in some of the greatest bargains of our time.
Your goal: To do well, but also to do good — to be one of the few who can accumulate a treasure-trove of liquid resources for yourself ... and also join those with the courage and means to pick up the pieces later, trigger a lasting rally from the bottom, and ultimately help lead the nation on the path to a true recovery.
Take These Urgent Steps! It Could Be Your Last Chance!
We told you to get the heck out of danger over a year ago. If you haven't, it's not too late to do so now, provided you act immediately ...
Step 1. Get up to speed on what's going on...for real.
Step 2. Get rid of bonds and mortgages: Don't wait for the next shoe to drop in the credit markets. Get out of all fixed instruments that could be seriously impacted, including Mortgages and mortgage-backed securities, regardless of duration and rating
Corporate bonds, whether rated "junk" and already collapsing or investment grade on the verge of becoming junk Tax-exempt municipal and state securities, whether high grade or low grade, short term or long term, insured or not Money market funds that invest in bank deposits, banker's acceptances, commercial paper, or short-term tax-exempt securities. Any other instrument invested in the now-uncertain future of the U.S. credit markets
Step 3. Sell real estate: Don't get stuck with sinking properties just because you can't get the price you hoped for. If you're selling your home, price it like you mean it. Instead of cutting your price in dribs and drabs and always trailing the market, cut it aggressively now. If you're looking for a new home, rent for now if possible. If that's not a viable alternative and you must buy now on credit, favor a 30-year fixed-rate loan. But make sure you have enough cash for a decent down payment. If you invest in commercial property, get out now while the market is still not far from its peak. Commercial property valuations got nutty during the recent boom, while capitalization rates plunged sharply. It's going to take a sizable drop in property values to get the cap rates back up to anything near normal.
Sell REITs. The recession will drive vacancy rates up and absorption rates down, while keeping a lid on rents, especially in the office and retail sectors. If you are still exposed to the risk of falling real estate — whether residential or commercial — seriously consider a protective hedge, using the UltraShort Real Estate ProShares.
Step 4. Get out of bank, brokerage and insurance company stocks: Use any Fed-inspired rally to sell. Don't let big names lull you into complacency. Stocks like Merrill Lynch, Capital One Financial, Washington Mutual and AIG could actually be among the most vulnerable. If you cannot sell, at least consider buying some protection with an inverse ETF that's tied to the financial industry, such as the UltraShort Financials ProShares.
Step 5. Unload other stocks: Use rallies to sell retail stocks, semiconductors, transportation stocks, Dow stocks and most S&P stocks.
Some investors protest: "I can't sell now. I can't afford to take the loss." My answer: If your stock portfolio is in the red, you've already taken the loss. Remember — the value of your brokerage account is marked to market every day. It doesn't distinguish between paper losses and realized losses, and you shouldn't either.
Other investors say: "But, I can't sell now. I can't afford to take the profit and pay the taxes." My answer: Your true net worth is always after taxes. So avoiding taking profits now buys you little. Better to write a big check to Uncle Sam on your profits than to write no check due to losses.
Step 6. Build cash: As you do this, park it in the one place that is still the single safest in the world — 3-month Treasury bills or Treasury-only money market funds.
Step 7. Buy hedges against inflation: To the degree that the Fed and Congress throw more money at the credit collapse, inflation will be a continuing — and growing — danger. So stick with your inflation hedges.
And above all, stay safe!
Damage Control
Oilpatch new international whipping boy
A new image of Canada--and particularly Alberta -- is taking hold abroad, and it's not a pretty one. Canada is increasingly being trashed as an environmental bum in highly unflattering portrayals in foreign media, while the oilsands deposits are painted as a freak show where Aboriginals are poisoned and the boreal forest wiped out. While the debate in Canada about the merits of the oilsands has been raging for years, in contexts as diverse as climate change, energy security, wealth and power redistribution within the country and Alberta, it's only in recent months that the deposits have been portrayed internationally as a global environmental catastrophe. Indeed, they appear to be emerging as the new staple of the environmental movement, alongside causes like stopping the seal hunt and the destruction of the rain forest, though, given their huge importance to Canada's economy, the implications of such a campaign are on a grander scale. Greg Stringham, vp at the Canadian Association of Petroleum Producers, called the trend "a new level of awareness," of the oilsands. "The first round of awareness was, wow, it's really big. We saw the international attention and people saying it's second in size to Saudi Arabia, and that led to Washington paying attention, too. Following that we knew there would be a new wave based on the environmental impact." CAPP has made the environmental impact of the oilsands its major topic of communication this year, Stringham said.
Part of the communication strategy is to debunk what is being said as inaccurate. Far from being a huge "global" source of greenhouse gases, the oilsands produce 4% of Canada's greenhouse gas emissions, while transportation accounts for 27%, electricity and heat 18%, oil and gas without oilsands 19%, other industries 14%, agriculture 8%. In a global context, the oilsands are responsible for 0.1% of global emissions, while the US as a whole is responsible for 21%, China for 20% and Europe for 17%, according to CAAP. Only 20% of the deposits are close enough to the surface that they can be mined, while the rest is and will be produced through thermal processes or new technologies with far less surface impact. BP's oilsands project would use thermal technology, not building a mine. Contrary to the suggestion that development is moving ahead unfettered, industry and governments are making huge commitments to reduce their carbon footprint, whether through carbon capture and storage or developing new extraction technologies that require less energy. Canadians involved in the business say the emerging portrait is so unfair it's insulting to the country and its environmental record. "As a Canadian, to read in European newspapers that we are a laggard on the environment is offensive," said Bob Skinner, Calgary-based vp at StatoilHydro, the Norwegian global leader in carbon capture and storage that entered the oilsands business last year. "Canada has been a leader in acid rain, migratory birds, the species at risk, getting lead out of gasoline, DDT, dealing with ozone depletion, all these things. If you look at the history, [these changes] were not started in Europe, they were started in North America."
(National Post 080219)
A new image of Canada--and particularly Alberta -- is taking hold abroad, and it's not a pretty one. Canada is increasingly being trashed as an environmental bum in highly unflattering portrayals in foreign media, while the oilsands deposits are painted as a freak show where Aboriginals are poisoned and the boreal forest wiped out. While the debate in Canada about the merits of the oilsands has been raging for years, in contexts as diverse as climate change, energy security, wealth and power redistribution within the country and Alberta, it's only in recent months that the deposits have been portrayed internationally as a global environmental catastrophe. Indeed, they appear to be emerging as the new staple of the environmental movement, alongside causes like stopping the seal hunt and the destruction of the rain forest, though, given their huge importance to Canada's economy, the implications of such a campaign are on a grander scale. Greg Stringham, vp at the Canadian Association of Petroleum Producers, called the trend "a new level of awareness," of the oilsands. "The first round of awareness was, wow, it's really big. We saw the international attention and people saying it's second in size to Saudi Arabia, and that led to Washington paying attention, too. Following that we knew there would be a new wave based on the environmental impact." CAPP has made the environmental impact of the oilsands its major topic of communication this year, Stringham said.
Part of the communication strategy is to debunk what is being said as inaccurate. Far from being a huge "global" source of greenhouse gases, the oilsands produce 4% of Canada's greenhouse gas emissions, while transportation accounts for 27%, electricity and heat 18%, oil and gas without oilsands 19%, other industries 14%, agriculture 8%. In a global context, the oilsands are responsible for 0.1% of global emissions, while the US as a whole is responsible for 21%, China for 20% and Europe for 17%, according to CAAP. Only 20% of the deposits are close enough to the surface that they can be mined, while the rest is and will be produced through thermal processes or new technologies with far less surface impact. BP's oilsands project would use thermal technology, not building a mine. Contrary to the suggestion that development is moving ahead unfettered, industry and governments are making huge commitments to reduce their carbon footprint, whether through carbon capture and storage or developing new extraction technologies that require less energy. Canadians involved in the business say the emerging portrait is so unfair it's insulting to the country and its environmental record. "As a Canadian, to read in European newspapers that we are a laggard on the environment is offensive," said Bob Skinner, Calgary-based vp at StatoilHydro, the Norwegian global leader in carbon capture and storage that entered the oilsands business last year. "Canada has been a leader in acid rain, migratory birds, the species at risk, getting lead out of gasoline, DDT, dealing with ozone depletion, all these things. If you look at the history, [these changes] were not started in Europe, they were started in North America."
(National Post 080219)
15 February 2008
Soakin' up some good news for a change
New materials can selectively capture CO2, scientists say
Last Updated: Friday, February 15, 2008 | 12:48 PM ET
CBC News
Scientists have created metal-organic crystals capable of soaking up carbon dioxide gas like a sponge, which could be used to keep industrial emissions of the gas out of the atmosphere.
Chemists at the University of California Los Angeles said the crystals — which go by the name zeolitic imidazolate frameworks, or ZIFs — can be tailored to absorb and trap specific molecules.
An optical photograph of crystals of zeolitic imidazolate frameworks (ZIFs). The porous materials can be designed to soak up specific molecules, such as carbon dioxide, making them potentially useful to trap the greenhouse gas. (Omar Y. Yaghi/Science)
"The technical challenge of selectively removing carbon dioxide has been overcome," said UCLA chemistry professor Omar Yaghi in a statement.
"Now we have structures that can be tailored precisely to capture carbon dioxide and store it like a reservoir, as we have demonstrated. No carbon dioxide escapes. Nothing escapes — unless you want it to do so. We believe this to be a turning point in capturing carbon dioxide before it reaches the atmosphere."
Yaghi and his colleagues describe their findings in the Friday issue of the journal Science.
He said the crystals are non-toxic and would require little extra energy from a power plant, making them an ideal alternative to current methods of CO2 filtering. The porous structures can be heated to high temperatures without decomposing and can be boiled in water or solvents for a week and remain stable, making them suitable for use in hot, energy-producing environments like power plants.
The team of scientists created 25 ZIF crystal structures in a laboratory, three of which showed a particular affinity for capturing carbon dioxide. The highly porous crystals also had what the researchers called "extraordinary capacity for storing CO2": one litre of the crystals could store about 83 litres of CO2.
The researchers created all 25 crystals by combining their raw materials in thousands of chemical reactions, which they say is similar to the high-throughput methods used in pharmaceutical research.
As concern over climate change grows and its link to human-made carbon dioxide emissions becomes clearer, governments and businesses around the world are investigating carbon-capturing technologies.
Past estimates from United Nation's energy and climate experts have pegged the cost of capturing CO2 between $25 US and $60 US a tonne for conventional coal-fired plants.
Earlier this month, a task force established by the Alberta and federal governments issued a report calling for $2-billion to get five new carbon capture and storage facilities operating by 2015.
This is some good news. Maybe there is some hope after all. I guess that's all we really have, anyways.
Finding some technology or something created by technology that is very effective and requires very little energy to operate is a rare find and good news, indeed. Now if we could only produce a few more cheap energy sources and a few more great pollution-controlling ideas, we'd be making some difference!
Last Updated: Friday, February 15, 2008 | 12:48 PM ET
CBC News
Scientists have created metal-organic crystals capable of soaking up carbon dioxide gas like a sponge, which could be used to keep industrial emissions of the gas out of the atmosphere.
Chemists at the University of California Los Angeles said the crystals — which go by the name zeolitic imidazolate frameworks, or ZIFs — can be tailored to absorb and trap specific molecules.
An optical photograph of crystals of zeolitic imidazolate frameworks (ZIFs). The porous materials can be designed to soak up specific molecules, such as carbon dioxide, making them potentially useful to trap the greenhouse gas. (Omar Y. Yaghi/Science)"The technical challenge of selectively removing carbon dioxide has been overcome," said UCLA chemistry professor Omar Yaghi in a statement.
"Now we have structures that can be tailored precisely to capture carbon dioxide and store it like a reservoir, as we have demonstrated. No carbon dioxide escapes. Nothing escapes — unless you want it to do so. We believe this to be a turning point in capturing carbon dioxide before it reaches the atmosphere."
Yaghi and his colleagues describe their findings in the Friday issue of the journal Science.
He said the crystals are non-toxic and would require little extra energy from a power plant, making them an ideal alternative to current methods of CO2 filtering. The porous structures can be heated to high temperatures without decomposing and can be boiled in water or solvents for a week and remain stable, making them suitable for use in hot, energy-producing environments like power plants.
The team of scientists created 25 ZIF crystal structures in a laboratory, three of which showed a particular affinity for capturing carbon dioxide. The highly porous crystals also had what the researchers called "extraordinary capacity for storing CO2": one litre of the crystals could store about 83 litres of CO2.
The researchers created all 25 crystals by combining their raw materials in thousands of chemical reactions, which they say is similar to the high-throughput methods used in pharmaceutical research.
As concern over climate change grows and its link to human-made carbon dioxide emissions becomes clearer, governments and businesses around the world are investigating carbon-capturing technologies.
Past estimates from United Nation's energy and climate experts have pegged the cost of capturing CO2 between $25 US and $60 US a tonne for conventional coal-fired plants.
Earlier this month, a task force established by the Alberta and federal governments issued a report calling for $2-billion to get five new carbon capture and storage facilities operating by 2015.
This is some good news. Maybe there is some hope after all. I guess that's all we really have, anyways.
Finding some technology or something created by technology that is very effective and requires very little energy to operate is a rare find and good news, indeed. Now if we could only produce a few more cheap energy sources and a few more great pollution-controlling ideas, we'd be making some difference!
Oops, sorry 'bout that
More manufacturing job cuts to come: TD
A new TD Bank study warns that hundreds of thousands more factory job losses are coming in Central Canada. The report also says manufacturers will have to make painful adjustments to survive, including cuts in wages as well as employment. Although it may be of little comfort to thousands of laid-off factory workers, the study argues that they are merely going through what manufacturing workers in other industrial countries have already suffered. And it will certainly be of no comfort at all to those unemployed workers to hear that those lost jobs -180,000 in Ontario and 140,000 in Quebec since 2002 - won't be coming back. In fact, the TD Bank study estimates that Canada's two most industrialized provinces could lose a further 350,000 manufacturing jobs over the coming half decade - 250,000 in Ontario and 100,000 in Quebec. Further, the report suggests some workers here are going to have to accept deep wage cuts, as workers in US have, to keep their jobs. While the report focuses on Central Canada, where the lion's share of the losses have occurred, report author Derek Burleton, TD's director of economic studies, said in an interview that it "applies to manufacturers right across the country." But don't just blame the strong dollar, the US slowdown or soaring energy costs for the pain, the report concluded. True, those factors have played a role, it conceded. "However, a closer look shows that the bigger story is more global in nature, " it said. Virtually all major industrialized economies have been reducing manufacturing employment as part of the broader objective to compete on productivity, especially in view of China's ascension as a manufacturing dynamo. The difference is for most advanced economies that trend began earlier. For some, such as the US, Britain and France, it began as early as the 1970s, the TD report said. Canadian manufacturers, however, were insulated by the ultra-low value of the Canadian dollar, it said. Now that the loonie is now trading close to parity, that protection has evaporated, thus exposing producers in Canada to those difficult adjustments.
(New Brunswick Telegraph-Journal 080214)
Poor auto industry workers. For North Americans, globalization was a way to speed up our obsolescence as a manufacturing power. The rich old men and corporations did it to us good this time.
A new TD Bank study warns that hundreds of thousands more factory job losses are coming in Central Canada. The report also says manufacturers will have to make painful adjustments to survive, including cuts in wages as well as employment. Although it may be of little comfort to thousands of laid-off factory workers, the study argues that they are merely going through what manufacturing workers in other industrial countries have already suffered. And it will certainly be of no comfort at all to those unemployed workers to hear that those lost jobs -180,000 in Ontario and 140,000 in Quebec since 2002 - won't be coming back. In fact, the TD Bank study estimates that Canada's two most industrialized provinces could lose a further 350,000 manufacturing jobs over the coming half decade - 250,000 in Ontario and 100,000 in Quebec. Further, the report suggests some workers here are going to have to accept deep wage cuts, as workers in US have, to keep their jobs. While the report focuses on Central Canada, where the lion's share of the losses have occurred, report author Derek Burleton, TD's director of economic studies, said in an interview that it "applies to manufacturers right across the country." But don't just blame the strong dollar, the US slowdown or soaring energy costs for the pain, the report concluded. True, those factors have played a role, it conceded. "However, a closer look shows that the bigger story is more global in nature, " it said. Virtually all major industrialized economies have been reducing manufacturing employment as part of the broader objective to compete on productivity, especially in view of China's ascension as a manufacturing dynamo. The difference is for most advanced economies that trend began earlier. For some, such as the US, Britain and France, it began as early as the 1970s, the TD report said. Canadian manufacturers, however, were insulated by the ultra-low value of the Canadian dollar, it said. Now that the loonie is now trading close to parity, that protection has evaporated, thus exposing producers in Canada to those difficult adjustments.
(New Brunswick Telegraph-Journal 080214)
Poor auto industry workers. For North Americans, globalization was a way to speed up our obsolescence as a manufacturing power. The rich old men and corporations did it to us good this time.
13 February 2008
Global warming: the final warning
Carbon Dioxide Rate is at Highest Level for 650,000 Years
by Steve Connor
Concentrations of carbon dioxide in the atmosphere are at their highest levels for at least 650,000 years and this rise began with the birth of the Industrial Revolution 250 years ago, according to the Intergovernmental Panel on Climate Change (IPCC).
Carbon dioxide is the principal greenhouse gas responsible for global warming and, in 2005, concentrations stood at 379 parts per million (ppm). This compares to a pre-industrial level of 278 ppm, and a range over the previous 650,000 years of between 180 and 300 ppm, the report says.
Present levels of carbon dioxide - which continue to rise inexorably each year - are unprecedented for the long period of geological history that scientists are able to analyse from gas samples trapped in the frozen bubbles of deep ice cores.
However, the IPCC points to a potentially more sinister development: the rate of increase of carbon dioxide in the atmosphere is beginning to accelerate. Between 1960 and 2005 the average rate at which carbon dioxide concentrations increased was 1.4 ppm per year. But when the figures are analysed more closely, it becomes apparent that there has been a recent rise in this rate of increase to 1.9 ppm per year between 1995 and 2005.
It is too early to explain this accelerating increase but one fear is that it may indicate a change in the way the Earth is responding to global warming. In other words, climate feedbacks that accelerate the rate of change may have kicked in.
The IPPC's report points out that, as the planet gets warmer, the natural ability of the land and the oceans to absorb carbon dioxide from the atmosphere begins to get weaker.
It is estimated that about half of all the man-made emissions of carbon dioxide have been taken out of the air and absorbed by natural carbon "sinks" on the land and in the sea. Many computer models of the climate predict that as the Earth continues to get warmer, these sinks will become less able to absorb carbon dioxide from the atmosphere.
This means that more carbon dioxide will be left in the air to exacerbate the greenhouse effect, so leading to further temperature rises and more global warming, which in turn will make the natural carbon sinks of the Earth even less efficient.
As the IPCC's summary says: "Warming tends to reduce land and ocean uptake of atmospheric carbon dioxide, increasing the fraction of anthropogenic [man-made] emissions that remain in the atmosphere."
This is just one of several "positive feedbacks" that could quickly accelerate the rate of global warming over the coming century. One isa warmer world is causing more evaporation from the oceans and a rise in water vapour - a powerful greenhouse gas - in the lower atmosphere. Another is sea ice and snow cover is shrinking at the poles and on mountains, leading to a further increase in local temperatures.
According to yesterday's UN report, the world will be a much hotter place by 2100. This will be the impact ...
+2.4°C: Coral reefs almost extinct
In North America, a new dust-bowl brings deserts to life in the high plains states, centred on Nebraska, but also wipes out agriculture and cattle ranching as sand dunes appear across five US states, from Texas in the south to Montana in the north.
Rising sea levels accelerate as the Greenland ice sheet tips into irreversible melt, submerging atoll nations and low-lying deltas. In Peru, disappearing Andean glaciers mean 10 million people face water shortages. Warming seas wipe out the Great Barrier Reef and make coral reefs virtually extinct throughout the tropics. Worldwide, a third of all species on the planet face extinction.
+3.4°C: Rainforest turns to desert
The Amazonian rainforest burns in a firestorm of catastrophic ferocity, covering South America with ash and smoke. Once the smoke clears, the interior of Brazil has become desert, and huge amounts of extra carbon have entered the atmosphere, further boosting global warming. The entire Arctic ice-cap disappears in the summer months, leaving the North Pole ice-free for the first time in 3 million years. Polar bears, walruses and ringed seals all go extinct. Water supplies run short in California as the Sierra Nevada snowpack melts away. Tens of millions are displaced as the Kalahari desert expands across southern Africa.
+4.4°C: Melting ice caps displace millions
Rapidly-rising temperatures in the Arctic put Siberian and Canadian permafrost in the melt zone, releasing vast quantities of methane and CO2. Global temperatures keep on rising rapidly in consequence. Melting ice-caps and sea level rises displace more than 100 million people, particularly in Bangladesh, the Nile Delta and Shanghai. Heatwaves and drought make much of the sub-tropics uninhabitable: large-scale migration even takes place within Europe, where deserts are growing in southern Spain, Italy and Greece. More than half of wild species are wiped out, in the worst mass extinction since the end of the dinosaurs. Agriculture collapses in Australia.
+5.4°C: Sea levels rise by five metres
The West Antarctic ice sheet breaks up, eventually adding another five metres to global sea levels. If these temperatures are sustained, the entire planet will become ice-free, and sea levels will be 70 metres higher than today. South Asian society collapses due to the disappearance of glaciers in the Himalayas, drying up the Indus river, while in east India and Bangladesh, monsoon floods threaten millions. Super-El Niños spark global weather chaos. Most of humanity begins to seek refuge away from higher temperatures closer to the poles. Tens of millions of refugees force their way into Scandanavia and the British Isles. World food supplies run out.
+6.4°C: Most of life is exterminated
Warming seas lead to the possible release of methane hydrates trapped in sub-oceanic sediments: methane fireballs tear across the sky, causing further warming. The oceans lose their oxygen and turn stagnant, releasing poisonous hydrogen sulphide gas and destroying the ozone layer. Deserts extend almost to the Arctic.
"Hypercanes" (hurricanes of unimaginable ferocity) circumnavigate the globe, causing flash floods which strip the land of soil. Humanity reduced to a few survivors eking out a living in polar refuges. Most of life on Earth has been snuffed out, as temperatures rise higher than for hundreds of millions of years.
The feedback loops are just starting to kick in. It's far too late already. The trigger has been set, now things will take care of themselves, no matter what we do. Humanity is not intelligent enough to become custodian of the global systems that make this planet habitable. We're fucked.
It's theorized that this is what occurred during the Permian die-off (90% of aquatic species and 70% of terrestrial species disappeared in this, the grand-daddy of all mass extinctions), that the oceans went hypoxic and then sulfuric after a long period of volcanic activity and all the dead plant and animal matter settled to the bottom of the shallow oceans. This detritus is what became the fodder for today's oil and gas deposits. Holy frickin' ironic! Isn't it great that we've initiated the cycle all over again by burning this stuff back into the atmosphere? We've set the bar for planetary system reversal by doing what takes natural processes thousands of years in only a few hundred years! And to top it all off, with zero chance of any species being able to adapt at such a rapid pace of change! Consequence free, indeed! Yay! Good for us! Go humanity, go!
BURN IT ALL UP AS QUICKLY AS YOU CAN. There's not much time left.
by Steve Connor
Concentrations of carbon dioxide in the atmosphere are at their highest levels for at least 650,000 years and this rise began with the birth of the Industrial Revolution 250 years ago, according to the Intergovernmental Panel on Climate Change (IPCC).
Carbon dioxide is the principal greenhouse gas responsible for global warming and, in 2005, concentrations stood at 379 parts per million (ppm). This compares to a pre-industrial level of 278 ppm, and a range over the previous 650,000 years of between 180 and 300 ppm, the report says.
Present levels of carbon dioxide - which continue to rise inexorably each year - are unprecedented for the long period of geological history that scientists are able to analyse from gas samples trapped in the frozen bubbles of deep ice cores.
However, the IPCC points to a potentially more sinister development: the rate of increase of carbon dioxide in the atmosphere is beginning to accelerate. Between 1960 and 2005 the average rate at which carbon dioxide concentrations increased was 1.4 ppm per year. But when the figures are analysed more closely, it becomes apparent that there has been a recent rise in this rate of increase to 1.9 ppm per year between 1995 and 2005.
It is too early to explain this accelerating increase but one fear is that it may indicate a change in the way the Earth is responding to global warming. In other words, climate feedbacks that accelerate the rate of change may have kicked in.
The IPPC's report points out that, as the planet gets warmer, the natural ability of the land and the oceans to absorb carbon dioxide from the atmosphere begins to get weaker.
It is estimated that about half of all the man-made emissions of carbon dioxide have been taken out of the air and absorbed by natural carbon "sinks" on the land and in the sea. Many computer models of the climate predict that as the Earth continues to get warmer, these sinks will become less able to absorb carbon dioxide from the atmosphere.
This means that more carbon dioxide will be left in the air to exacerbate the greenhouse effect, so leading to further temperature rises and more global warming, which in turn will make the natural carbon sinks of the Earth even less efficient.
As the IPCC's summary says: "Warming tends to reduce land and ocean uptake of atmospheric carbon dioxide, increasing the fraction of anthropogenic [man-made] emissions that remain in the atmosphere."
This is just one of several "positive feedbacks" that could quickly accelerate the rate of global warming over the coming century. One isa warmer world is causing more evaporation from the oceans and a rise in water vapour - a powerful greenhouse gas - in the lower atmosphere. Another is sea ice and snow cover is shrinking at the poles and on mountains, leading to a further increase in local temperatures.
According to yesterday's UN report, the world will be a much hotter place by 2100. This will be the impact ...
+2.4°C: Coral reefs almost extinct
In North America, a new dust-bowl brings deserts to life in the high plains states, centred on Nebraska, but also wipes out agriculture and cattle ranching as sand dunes appear across five US states, from Texas in the south to Montana in the north.
Rising sea levels accelerate as the Greenland ice sheet tips into irreversible melt, submerging atoll nations and low-lying deltas. In Peru, disappearing Andean glaciers mean 10 million people face water shortages. Warming seas wipe out the Great Barrier Reef and make coral reefs virtually extinct throughout the tropics. Worldwide, a third of all species on the planet face extinction.
+3.4°C: Rainforest turns to desert
The Amazonian rainforest burns in a firestorm of catastrophic ferocity, covering South America with ash and smoke. Once the smoke clears, the interior of Brazil has become desert, and huge amounts of extra carbon have entered the atmosphere, further boosting global warming. The entire Arctic ice-cap disappears in the summer months, leaving the North Pole ice-free for the first time in 3 million years. Polar bears, walruses and ringed seals all go extinct. Water supplies run short in California as the Sierra Nevada snowpack melts away. Tens of millions are displaced as the Kalahari desert expands across southern Africa.
+4.4°C: Melting ice caps displace millions
Rapidly-rising temperatures in the Arctic put Siberian and Canadian permafrost in the melt zone, releasing vast quantities of methane and CO2. Global temperatures keep on rising rapidly in consequence. Melting ice-caps and sea level rises displace more than 100 million people, particularly in Bangladesh, the Nile Delta and Shanghai. Heatwaves and drought make much of the sub-tropics uninhabitable: large-scale migration even takes place within Europe, where deserts are growing in southern Spain, Italy and Greece. More than half of wild species are wiped out, in the worst mass extinction since the end of the dinosaurs. Agriculture collapses in Australia.
+5.4°C: Sea levels rise by five metres
The West Antarctic ice sheet breaks up, eventually adding another five metres to global sea levels. If these temperatures are sustained, the entire planet will become ice-free, and sea levels will be 70 metres higher than today. South Asian society collapses due to the disappearance of glaciers in the Himalayas, drying up the Indus river, while in east India and Bangladesh, monsoon floods threaten millions. Super-El Niños spark global weather chaos. Most of humanity begins to seek refuge away from higher temperatures closer to the poles. Tens of millions of refugees force their way into Scandanavia and the British Isles. World food supplies run out.
+6.4°C: Most of life is exterminated
Warming seas lead to the possible release of methane hydrates trapped in sub-oceanic sediments: methane fireballs tear across the sky, causing further warming. The oceans lose their oxygen and turn stagnant, releasing poisonous hydrogen sulphide gas and destroying the ozone layer. Deserts extend almost to the Arctic.
"Hypercanes" (hurricanes of unimaginable ferocity) circumnavigate the globe, causing flash floods which strip the land of soil. Humanity reduced to a few survivors eking out a living in polar refuges. Most of life on Earth has been snuffed out, as temperatures rise higher than for hundreds of millions of years.
The feedback loops are just starting to kick in. It's far too late already. The trigger has been set, now things will take care of themselves, no matter what we do. Humanity is not intelligent enough to become custodian of the global systems that make this planet habitable. We're fucked.
It's theorized that this is what occurred during the Permian die-off (90% of aquatic species and 70% of terrestrial species disappeared in this, the grand-daddy of all mass extinctions), that the oceans went hypoxic and then sulfuric after a long period of volcanic activity and all the dead plant and animal matter settled to the bottom of the shallow oceans. This detritus is what became the fodder for today's oil and gas deposits. Holy frickin' ironic! Isn't it great that we've initiated the cycle all over again by burning this stuff back into the atmosphere? We've set the bar for planetary system reversal by doing what takes natural processes thousands of years in only a few hundred years! And to top it all off, with zero chance of any species being able to adapt at such a rapid pace of change! Consequence free, indeed! Yay! Good for us! Go humanity, go!
BURN IT ALL UP AS QUICKLY AS YOU CAN. There's not much time left.
12 February 2008
Screwed
GM posts record loss
General Motors reported a US$38.7 billion loss for 2007 on Tuesday, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to US hourly workers in hopes of replacing some of them with lower-paid help. The earnings report and buyout offer came as GM struggles to turn around its North American business as the economy weakens. But GM chairman and ceo Rick Wagoner said that the company made significant progress in 2007, reducing structural costs in North America, negotiating a historic labor agreement and growing aggressively in Latin America and Asia. GM's annual loss of $38.7B largely was due to a third-quarter charge related to unused tax credits. The 2007 loss topped GM's previous record in 1992, when the company lost $23.4B because of a change in health care accounting. Excluding the tax charge and other special items, GM lost $23M, or 4 cents per share, for the year, compared with a net income of $2.2B in 2006, beating Wall Street's expectations. Analysts polled by Thomson Financial expected GM to post a full-year loss of 95 cents per share. For the fourth quarter, GM posted a loss of $722M, or $1.28 per share, compared with a net income of $950M in the year-ago quarter. Fourth-quarter charges included $622M to Delphi, GM's former parts division, for its restructuring efforts.
GM reported $181B in revenues for the year, down from $206B in 2006. Its automotive business saw record automotive revenues of $178B in 2007, up $7B from a year ago thanks to growth in emerging markets and favorable exchange rates. GM was profitable in every region outside North America. GM's Latin America, Middle East and Africa division reported a record $1.3B in earnings, up 140% from 2006. GM's Asia Pacific division earned $744M, up from $403M in 2006, while GM Europe reported a profit of $55M, down from a profit of $357M in 2006. But GM's North American division continued to struggle, posting a $1.5B loss for the year, nearly identical to its $1.6B loss in 2006. GM's North American division also reported a loss of $1.1B in the fourth quarter, compared with a loss of $129M in the year-ago quarter. Wagoner said the weak US economy and high commodity prices hurt turnaround efforts in North America. He said GM's decision to reduce low-profit sales to daily rental companies by 110,000 in 2007 also affected US sales. GM's results also were dragged down by its 49% stake in GMAC Financial Services which lost $2.3B in 2007. GM reported a $1.1B loss attributed to GMAC.
The automaker said it was offering a new round of buyouts to all 74,000 of its US hourly workers who are represented by the United Auto Workers. GM won't say how many workers it hopes to shed, but under its new contract with the UAW, it will be able to replace up to 16,000 workers doing non-assembly jobs with new employees who will be paid half the old wage of $28 per hour. Ford and Chrysler already have announced similar buyout offers. Workers will be given the details of the buyouts over the next several weeks. Most of those who accept are expected to leave by July 1, the company said. The UAW represents 98% of the company's US hourly workers, with smaller unions representing the rest, GM spokesman Dan Flores said. UAW president Ron Gettelfinger said he expects fewer than 20,000 workers to take the buyout. Gettelfinger said the union understood that more buyouts would be coming when it agreed to the contract.
(Associated Press 080212)
Good for them and their lack of vision, clinging onto the larger profit margins of the SUVs and other input price-sensitive vehicles they have brainwashed the North American public into buying for the last ten years. While the Asian manufacturers have swooped in with some vision and appropriate business plans and taken everything away from them. You reap what you sow, Detroit. None of that initiative was good for anyone or anything except the fat cats that got the profit-sharing bonuses.
I guess most of the loss is through accounting losses and write-downs, but even so, the Detroit 3 have been losing market share rapidly to international players, especially from Asia. I doubt their bleeding has ended. So, how to fix? Start attempting to slash the payroll. They have offered buyouts to all 74,000 American employees in the hopes they can re-hire new employees at half the rate. Apparently this is not how things are structured in Canada so no buyouts have been offered here yet. Why not kick out the Executives? No doubt some will be asked to leave as a PR move, yet will receive multi-million dollar severance packages while Joe and Jane Lunchbox get their walking papers off the assembly line. The whole thing is disgusting and ridiculous.
General Motors reported a US$38.7 billion loss for 2007 on Tuesday, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to US hourly workers in hopes of replacing some of them with lower-paid help. The earnings report and buyout offer came as GM struggles to turn around its North American business as the economy weakens. But GM chairman and ceo Rick Wagoner said that the company made significant progress in 2007, reducing structural costs in North America, negotiating a historic labor agreement and growing aggressively in Latin America and Asia. GM's annual loss of $38.7B largely was due to a third-quarter charge related to unused tax credits. The 2007 loss topped GM's previous record in 1992, when the company lost $23.4B because of a change in health care accounting. Excluding the tax charge and other special items, GM lost $23M, or 4 cents per share, for the year, compared with a net income of $2.2B in 2006, beating Wall Street's expectations. Analysts polled by Thomson Financial expected GM to post a full-year loss of 95 cents per share. For the fourth quarter, GM posted a loss of $722M, or $1.28 per share, compared with a net income of $950M in the year-ago quarter. Fourth-quarter charges included $622M to Delphi, GM's former parts division, for its restructuring efforts.
GM reported $181B in revenues for the year, down from $206B in 2006. Its automotive business saw record automotive revenues of $178B in 2007, up $7B from a year ago thanks to growth in emerging markets and favorable exchange rates. GM was profitable in every region outside North America. GM's Latin America, Middle East and Africa division reported a record $1.3B in earnings, up 140% from 2006. GM's Asia Pacific division earned $744M, up from $403M in 2006, while GM Europe reported a profit of $55M, down from a profit of $357M in 2006. But GM's North American division continued to struggle, posting a $1.5B loss for the year, nearly identical to its $1.6B loss in 2006. GM's North American division also reported a loss of $1.1B in the fourth quarter, compared with a loss of $129M in the year-ago quarter. Wagoner said the weak US economy and high commodity prices hurt turnaround efforts in North America. He said GM's decision to reduce low-profit sales to daily rental companies by 110,000 in 2007 also affected US sales. GM's results also were dragged down by its 49% stake in GMAC Financial Services which lost $2.3B in 2007. GM reported a $1.1B loss attributed to GMAC.
The automaker said it was offering a new round of buyouts to all 74,000 of its US hourly workers who are represented by the United Auto Workers. GM won't say how many workers it hopes to shed, but under its new contract with the UAW, it will be able to replace up to 16,000 workers doing non-assembly jobs with new employees who will be paid half the old wage of $28 per hour. Ford and Chrysler already have announced similar buyout offers. Workers will be given the details of the buyouts over the next several weeks. Most of those who accept are expected to leave by July 1, the company said. The UAW represents 98% of the company's US hourly workers, with smaller unions representing the rest, GM spokesman Dan Flores said. UAW president Ron Gettelfinger said he expects fewer than 20,000 workers to take the buyout. Gettelfinger said the union understood that more buyouts would be coming when it agreed to the contract.
(Associated Press 080212)
Good for them and their lack of vision, clinging onto the larger profit margins of the SUVs and other input price-sensitive vehicles they have brainwashed the North American public into buying for the last ten years. While the Asian manufacturers have swooped in with some vision and appropriate business plans and taken everything away from them. You reap what you sow, Detroit. None of that initiative was good for anyone or anything except the fat cats that got the profit-sharing bonuses.
I guess most of the loss is through accounting losses and write-downs, but even so, the Detroit 3 have been losing market share rapidly to international players, especially from Asia. I doubt their bleeding has ended. So, how to fix? Start attempting to slash the payroll. They have offered buyouts to all 74,000 American employees in the hopes they can re-hire new employees at half the rate. Apparently this is not how things are structured in Canada so no buyouts have been offered here yet. Why not kick out the Executives? No doubt some will be asked to leave as a PR move, yet will receive multi-million dollar severance packages while Joe and Jane Lunchbox get their walking papers off the assembly line. The whole thing is disgusting and ridiculous.
Space Center Houston
A clip from our tour of Space Center Houston and the Johnson Space Center
Saturn V Rocket Park
Saturn V Rocket Park
10 February 2008
Fifty Degrees of Separation
Imagine our joy when we got to the Houston airport today in balmy 25C weather to find out on the gate board that is was -13F in Calgary. Freaking Americans and their Fahrenheit! When are they converting to the metric system already?
While Joe and I argued about what -13F was in Celsius, the dude at the gate said it was around -25C. I broke down and cried. Does the plus or minus sign really matter? Not anymore. I'm back in cold, harsh reality tonight.
While Joe and I argued about what -13F was in Celsius, the dude at the gate said it was around -25C. I broke down and cried. Does the plus or minus sign really matter? Not anymore. I'm back in cold, harsh reality tonight.
09 February 2008
Imaginary money up in smoke. Shocking!
World bourses lost 5.2 trillion dlrs in January: credit rater
PARIS (AFP) - World stockmarkets lost 5.2 trillion dollars (3.6 trillion euros) in January thanks to the fallout from the US subprime crisis and fears of a global economic slowdown, Standard & Poor's said Saturday.
"If investors thought the market could only go up, January's wake-up call pulled them back into reality," the independent credit ratings' provider said.
Standard & Poor's said the world's equity markets lost a combined 5.2 trillion dollars as emerging markets fell 12.44 percent and developed markets lost 7.83 percent to register one of the worst starts to a new year.
"There were few safe havens in January as 50 of the 52 global equity markets ended the month in negative territory, with 25 of them posting double-digit losses," said Howard Silverblatt, senior index analyst at S&Ps.
All 26 developed equity markets posted negative returns in January, with 16 losing at least 10 percent of their value.
The January declines negated all previous market gains, leaving all of the developed markets in the red for the trailing three month period.
In Paris, the stock exchange lost 12.27 percent over the course of January, 15.27 percent over the past three months, more than wiping out its gains over the last 12 months -- down 0.74 percent).
The situation was even worse in London -- down 8.85 percent in January, down 16.54 percent for the past three months and down 2.22 percent over 12 months -- and in the US, which was down 6.07 percent in January, down 10.78 percent over three months and down 2.42 percent over 12 months.
The story was similar in Japan, where the market lost 4.47 percent in January, 10.31 percent over three months and down 10.44 percent over the past 12 months.
In Germany, in contrast, although the stock exchange lost 13.72 percent in January and 13.84 percent over three months, it was up 13.43 percent over the year.
Equity markets in emerging countries also suffered heavy losses in January, apart from Morocco which gained 10.17 percent and Jordan, which was up by 3.11 percent. Turkey was the most affected with January losses reaching 22.70 percent, followed by China on 21.40 percent, Russia on 16.12 percent and India at 16 percent.
But only Argentina and Taiwan slipped into negative territory for the 12-month period.
I really have nothing to add. Easy come easy go. A sucker's born every minute, and all those relevant metaphors.
PARIS (AFP) - World stockmarkets lost 5.2 trillion dollars (3.6 trillion euros) in January thanks to the fallout from the US subprime crisis and fears of a global economic slowdown, Standard & Poor's said Saturday.
"If investors thought the market could only go up, January's wake-up call pulled them back into reality," the independent credit ratings' provider said.
Standard & Poor's said the world's equity markets lost a combined 5.2 trillion dollars as emerging markets fell 12.44 percent and developed markets lost 7.83 percent to register one of the worst starts to a new year.
"There were few safe havens in January as 50 of the 52 global equity markets ended the month in negative territory, with 25 of them posting double-digit losses," said Howard Silverblatt, senior index analyst at S&Ps.
All 26 developed equity markets posted negative returns in January, with 16 losing at least 10 percent of their value.
The January declines negated all previous market gains, leaving all of the developed markets in the red for the trailing three month period.
In Paris, the stock exchange lost 12.27 percent over the course of January, 15.27 percent over the past three months, more than wiping out its gains over the last 12 months -- down 0.74 percent).
The situation was even worse in London -- down 8.85 percent in January, down 16.54 percent for the past three months and down 2.22 percent over 12 months -- and in the US, which was down 6.07 percent in January, down 10.78 percent over three months and down 2.42 percent over 12 months.
The story was similar in Japan, where the market lost 4.47 percent in January, 10.31 percent over three months and down 10.44 percent over the past 12 months.
In Germany, in contrast, although the stock exchange lost 13.72 percent in January and 13.84 percent over three months, it was up 13.43 percent over the year.
Equity markets in emerging countries also suffered heavy losses in January, apart from Morocco which gained 10.17 percent and Jordan, which was up by 3.11 percent. Turkey was the most affected with January losses reaching 22.70 percent, followed by China on 21.40 percent, Russia on 16.12 percent and India at 16 percent.
But only Argentina and Taiwan slipped into negative territory for the 12-month period.
I really have nothing to add. Easy come easy go. A sucker's born every minute, and all those relevant metaphors.
07 February 2008
Corpus Christi/Galveston
We arrived in Corpus Christi in the morning on Friday. After driving along the main drag along the Gulf (Ocean Drive) where we observed that most of the shorefront property is multi-million dollar mansions and landscaped parks, we headed over the Harbor Bridge (entry to the CC Navigation Channel) next to the University of Texas Aquarium and the public beach to the U.S.S. Lexington, a former U.S Navy aircraft carrier (built in 1943, decommissioned in 1991) now revamped into a floating museum in Corpus christi Harbour. The tour was excellent. There are lots of old jets that are moved from the Hangar to the flight deck and several different self-guided tours within the interior of the ship -- I took video of most of them. We ended the tour with a movie in the Imax theater on-board called "Flight Pilot" that documented the pilots and support crews of the 2004 Operation Red Flag, a training exercise that takes place at Nellis Air Force Base in Las Vegas every four to six years. It really gives you insight into the inner workings of these armed forces teams, the coordination required for any defense exercise of any scale, and the insane amounts of money that are spent on defense, particularly by the United States. It leaves little bewilderment why President Bush is now asking for a $3.6 trillion defense budget for 2008!!
After the tour, we headed out of Corpus Christi, aiming for Galveston by dinnertime. We rolled back into the outskirts of Houston and veered east to Galveston on time and checked into a Gulf-view hotel for the night. We went to a fantastic Italian restaurant for dinner and a great bottle of wine along the historic Strand on Galveston Bay and then went back to the hotel to retire for the night. Galveston is set up quite differently than Corpus Christi. Instead of beaches along the Gulf, they have a concrete seawall and a main six-lane thoroughfare (aptly named Seawall Blvd) along the east shore. It makes for an uglier view of the ocean, and presumably along the Galveston Bay side where the cruise ship docks are, things would be the same. But then again, in Galveston there are around 100,000 people crammed onto several small sandy islets. For similarities, both cities have vast oil refineries and tanker offload ports as far as the eye can see in the industrial areas. As you would expect, with the volume of oil and gas that is either pumped or shipped to the Texas coast, most of the shoreline is built up to accommodate this infrastructure. I think even most Americans would be blown away by the scale of it all. This morning we got our Starbucks, hopped in the car and headed to the airport, where I am now sitting. We tried to take the Sam Houston Tollway to see if it would be faster. You pay as you go from section to section, but at the northeast end, it reverts back to normal parkways with lights and such, so I would probably suggest staying on the inner loop further into Houston and one of the Interstates to get where you're going if you're not travelling at rush hour or in a hurry.
Reflecting on the trip as a whole, it was a great venture and I'm glad this time we did a driving tour from Houston with the opportunity to tour a host of Texan cities. I would limit the driving to only a few days though -- despite the highway system being one of the best in the world, the distances between everything here are still large and you find yourself driving for hours and hours to get somewhere. I always find this type of vacation very disruptive as you're not getting any real downtime if you're trapped on a freeway in traffic. Lord knows why everyone here decides to do those big trips between Texan cities in trucks and SUVs (they outnumber cars by a large margin). I would be all about the luxury cars!
...so I've heard that there was a big snowstorm in Calgary yesterday which has made the roads shitty and it's still far too cold...-25C this afternoon? All I got was freaking Fahrenheit which is still nonsensical to me. Sigh - it seems like yet the end of yet another too-short trip. It was a good one, but alas a week still feels too short. I can only look forward to a potential trip to Tucson as being the next warm one! It'll only be five days or so, even shorter than this one. Back to work on Monday to pay the bills!
After the tour, we headed out of Corpus Christi, aiming for Galveston by dinnertime. We rolled back into the outskirts of Houston and veered east to Galveston on time and checked into a Gulf-view hotel for the night. We went to a fantastic Italian restaurant for dinner and a great bottle of wine along the historic Strand on Galveston Bay and then went back to the hotel to retire for the night. Galveston is set up quite differently than Corpus Christi. Instead of beaches along the Gulf, they have a concrete seawall and a main six-lane thoroughfare (aptly named Seawall Blvd) along the east shore. It makes for an uglier view of the ocean, and presumably along the Galveston Bay side where the cruise ship docks are, things would be the same. But then again, in Galveston there are around 100,000 people crammed onto several small sandy islets. For similarities, both cities have vast oil refineries and tanker offload ports as far as the eye can see in the industrial areas. As you would expect, with the volume of oil and gas that is either pumped or shipped to the Texas coast, most of the shoreline is built up to accommodate this infrastructure. I think even most Americans would be blown away by the scale of it all. This morning we got our Starbucks, hopped in the car and headed to the airport, where I am now sitting. We tried to take the Sam Houston Tollway to see if it would be faster. You pay as you go from section to section, but at the northeast end, it reverts back to normal parkways with lights and such, so I would probably suggest staying on the inner loop further into Houston and one of the Interstates to get where you're going if you're not travelling at rush hour or in a hurry.
Reflecting on the trip as a whole, it was a great venture and I'm glad this time we did a driving tour from Houston with the opportunity to tour a host of Texan cities. I would limit the driving to only a few days though -- despite the highway system being one of the best in the world, the distances between everything here are still large and you find yourself driving for hours and hours to get somewhere. I always find this type of vacation very disruptive as you're not getting any real downtime if you're trapped on a freeway in traffic. Lord knows why everyone here decides to do those big trips between Texan cities in trucks and SUVs (they outnumber cars by a large margin). I would be all about the luxury cars!
...so I've heard that there was a big snowstorm in Calgary yesterday which has made the roads shitty and it's still far too cold...-25C this afternoon? All I got was freaking Fahrenheit which is still nonsensical to me. Sigh - it seems like yet the end of yet another too-short trip. It was a good one, but alas a week still feels too short. I can only look forward to a potential trip to Tucson as being the next warm one! It'll only be five days or so, even shorter than this one. Back to work on Monday to pay the bills!
Rio Grande Valley
We made it into the Rio Grande Valley around 4pm on Monday. We arrived to a great meal put on by mom for us and several friends of my parents. Joe and I went to the Outlet Mall in Mercedes to get a quick overview of what money we could drop at the stores on Tuesday later in the evening. We did make stops at Jockey, Banana Republic and Burberry for a few things before heading home...
On Tuesday, we headed to South Padre Island to get some sun. It was supposed to be as hot on Tuesday as Monday was (around 32C) but the wind was howling and the temps only got up to the high 20s. It would have been a nice day if the wind hadn't been blowing so hard. It was even a hard day for he windsurfers and parasailers. We went for lunch at a small cafe along the beach off Gulf Blvd, then tried to get onto the beach but aborted the mission and decided we could do our sunning by the pool instead. Disappointed, we headed into Academy Sports in Brownsville, bought a bunch of shoes (including my new Asics 2130s!) and headed to the Outlet Mall in Mercedes again before heading back to Weslaco. There we dropped more money at Calvin Klein, Guess, Sketchers and Ecko, but didn't find anything at some of the other stores like Adidas, Perry Ellis and Nike where I was hoping to find some deals. Needless to say, Joe did buy a new gear bag at Nike to take home our new eight pairs of shoes...and it's full already....I got two pairs of leather dress shoes at Sketchers for 50 freaking dollars!! How could I resist?
But we didn't just come here to shop. This morning, I went out for a nice 13ker around 7:30am before we headed over to Progreso, Mexico to check out the sights, including that marvellous 'Crazy Bird Room' at El Disco Supercentre. Joe bought a couple of blankets, we got some candy and duty-free (of course), lunch at Arriba, then headed back to Texas and to Pepe's By the River in Mission. We went into McAllen for a few things then to a Golden Corral Buffet in Weslaco before heading home. These buffets are famous for having an incredible selection of food and attracting some very serioud customers at a very reasonable price...so...full...
Tomorrow is supposed to finally be the pooldeck day. Every day has involved driving of some sort, so after going for a run in the morning and watching my dad's baseball game I plan on spending the afternoon at the pool reading my book. We had discussed heading to Corpus Christi tomorrow night since it is only a couple of hours from here in anticipation of the 4.5 hour drive back to Houston/Galveston on Friday. I really want to check out the U.S.S. Lexington in Corpus Christi and I don't want to cheap out time-wise on the chance to get on board an aircraft carrier just to get to Galveston in time to find a decent hotel. I think we'll be okay to leave for Corpus Christi very early on Friday morming, do the tour, get on the road again by 2-3pm or so, then roll into Galveston around 7pm and get a room and food. Our flight back to Calgary is around 1:30pm on Saturday so I would like to be at the airport no later than 11am to drop off the rental car and get the shuttle to the terminal and then do the rest of the normal check-in crap.
I'm having connectivity problems with the wireless on site here, so I've been running around the campground looking for a good connection and not having much luck. I got enough connectivity to find out that Air Canada was having another seat sale for flights until April 30th and discovered I could get a not-so-good-connection indirect flight to Phoenix for the end of March for around $480, but since I haven't been able to confirm getting the time off of work to go for the Tucson Bicycle Classic, I wasn't able to book at that price before the end of the day. Here's hoping they throw another sale out for both a trip to Tucson at the end of March and another one (direct or bust) to Chicago for May. I still have to book flights for the IBM Blue Horizon in Toronto for the April 20th weekend, so there's lots to do and flight sales to look out for over the next few weeks. Of course, as soon as I get back I've got meetings Monday, Tuesday, and Wednesday night so Sunday's definitely going to be a down day. I just can't believe that after spending a week in 30C weather I'm going to be going back to -20C or whereabouts. I'll just have to work at not thinking about it until I have to face it!
I've been taking lots of video on this trip, not so many photos. But Joe has...
I'm looking forward to finally getting to work on all the long-overdue-to-post videos that I still have saved on the video camera. There'll definitely be lots to edit together and post from the holidays and this trip too.
On Tuesday, we headed to South Padre Island to get some sun. It was supposed to be as hot on Tuesday as Monday was (around 32C) but the wind was howling and the temps only got up to the high 20s. It would have been a nice day if the wind hadn't been blowing so hard. It was even a hard day for he windsurfers and parasailers. We went for lunch at a small cafe along the beach off Gulf Blvd, then tried to get onto the beach but aborted the mission and decided we could do our sunning by the pool instead. Disappointed, we headed into Academy Sports in Brownsville, bought a bunch of shoes (including my new Asics 2130s!) and headed to the Outlet Mall in Mercedes again before heading back to Weslaco. There we dropped more money at Calvin Klein, Guess, Sketchers and Ecko, but didn't find anything at some of the other stores like Adidas, Perry Ellis and Nike where I was hoping to find some deals. Needless to say, Joe did buy a new gear bag at Nike to take home our new eight pairs of shoes...and it's full already....I got two pairs of leather dress shoes at Sketchers for 50 freaking dollars!! How could I resist?
But we didn't just come here to shop. This morning, I went out for a nice 13ker around 7:30am before we headed over to Progreso, Mexico to check out the sights, including that marvellous 'Crazy Bird Room' at El Disco Supercentre. Joe bought a couple of blankets, we got some candy and duty-free (of course), lunch at Arriba, then headed back to Texas and to Pepe's By the River in Mission. We went into McAllen for a few things then to a Golden Corral Buffet in Weslaco before heading home. These buffets are famous for having an incredible selection of food and attracting some very serioud customers at a very reasonable price...so...full...
Tomorrow is supposed to finally be the pooldeck day. Every day has involved driving of some sort, so after going for a run in the morning and watching my dad's baseball game I plan on spending the afternoon at the pool reading my book. We had discussed heading to Corpus Christi tomorrow night since it is only a couple of hours from here in anticipation of the 4.5 hour drive back to Houston/Galveston on Friday. I really want to check out the U.S.S. Lexington in Corpus Christi and I don't want to cheap out time-wise on the chance to get on board an aircraft carrier just to get to Galveston in time to find a decent hotel. I think we'll be okay to leave for Corpus Christi very early on Friday morming, do the tour, get on the road again by 2-3pm or so, then roll into Galveston around 7pm and get a room and food. Our flight back to Calgary is around 1:30pm on Saturday so I would like to be at the airport no later than 11am to drop off the rental car and get the shuttle to the terminal and then do the rest of the normal check-in crap.
I'm having connectivity problems with the wireless on site here, so I've been running around the campground looking for a good connection and not having much luck. I got enough connectivity to find out that Air Canada was having another seat sale for flights until April 30th and discovered I could get a not-so-good-connection indirect flight to Phoenix for the end of March for around $480, but since I haven't been able to confirm getting the time off of work to go for the Tucson Bicycle Classic, I wasn't able to book at that price before the end of the day. Here's hoping they throw another sale out for both a trip to Tucson at the end of March and another one (direct or bust) to Chicago for May. I still have to book flights for the IBM Blue Horizon in Toronto for the April 20th weekend, so there's lots to do and flight sales to look out for over the next few weeks. Of course, as soon as I get back I've got meetings Monday, Tuesday, and Wednesday night so Sunday's definitely going to be a down day. I just can't believe that after spending a week in 30C weather I'm going to be going back to -20C or whereabouts. I'll just have to work at not thinking about it until I have to face it!
I've been taking lots of video on this trip, not so many photos. But Joe has...
I'm looking forward to finally getting to work on all the long-overdue-to-post videos that I still have saved on the video camera. There'll definitely be lots to edit together and post from the holidays and this trip too.
03 February 2008
Austin/San Antonio
Joe and I got to tour the Houston Space Center yesterday. It was very cool. We went to the South Beach club last night--I'm glad we did. It was a great fun place! This morning we groggily checked out of of Lovett Inn and headed to Austin for the day. We checked out the Warehouse District and admired the shirtless guys running by the river in the heat and humidity.
I found out from the owner of the B&B that an old friend, Ed was there and left a message for us! I couldn't believe it. Ed and his partner Bill are the guys I stayed with when I travelled to New Orleans in 2002. Now they live in Nashville, I think. I knew that he still did business in Houston on a regular basis, but I had no idea that he stayed at the Lovett whenever he was there! I'm still not sure how he knew we were there too...maybe he was in the townhouse beside us and saw my name on the wall by our door? We apparently missed him by a half-hour this morning, but I will give him a call when we get back to Calgary.
We changed our minds and instead of staying in Austin for the evening, we've continued on to San Antonio and we're spending the night here. Dinner on the Riverwalk tonight, a run tomorrow morning, and then we'll head to Weslaco, ETA in the mid-afternoon. It was around 80F today and it's supposed to be that nice again tomorrow, so hopefully we'll be poolside by dinner tomorrow! There's also a pool at the hotel here that I wouldn't mind trying out.....
I'm so excited to see mom and dad!
I found out from the owner of the B&B that an old friend, Ed was there and left a message for us! I couldn't believe it. Ed and his partner Bill are the guys I stayed with when I travelled to New Orleans in 2002. Now they live in Nashville, I think. I knew that he still did business in Houston on a regular basis, but I had no idea that he stayed at the Lovett whenever he was there! I'm still not sure how he knew we were there too...maybe he was in the townhouse beside us and saw my name on the wall by our door? We apparently missed him by a half-hour this morning, but I will give him a call when we get back to Calgary.
We changed our minds and instead of staying in Austin for the evening, we've continued on to San Antonio and we're spending the night here. Dinner on the Riverwalk tonight, a run tomorrow morning, and then we'll head to Weslaco, ETA in the mid-afternoon. It was around 80F today and it's supposed to be that nice again tomorrow, so hopefully we'll be poolside by dinner tomorrow! There's also a pool at the hotel here that I wouldn't mind trying out.....
I'm so excited to see mom and dad!
01 February 2008
Happy Anniversary, you bastard!
Here's Sara Silverman's present to Jimmy Kimmel for the 5th Anniversary of the Jimmy Kimmel Show. Hilarious! Can you imagine the conversations those two have at home? That pic of them drinking speaks volumes! LOL
Hello from Houston
Joe and I made it to Houston around 5pm this evening. We got to the B&B we're staying at relatively easily and after dinner at a Mediterranean restaurant, we're having a bit of downtime before we head out for the evening. We're staying in the Montrose District so all the bars are within walking distance. Tonight we're going to check out JR's and the Montrose Mining Company, possibly also Brazos River Bottom (although I don't think I'm in the mood for country music and cowboys!). Tomorrow is a visit to the LBJ Space Center and the famous Rich's Houston Nightclub. I don't think there are any big-name DJs in town tomorrow, but it should be a good time anyways! Sunday --- off to Austin. Pics to follow.
Subscribe to:
Posts (Atom)