Tag: ek Politics

Crossposted from The Stars Hollow Gazette

You see, it’s all about easing dependence on “foreign” (brown people) oil-

Canada pipeline firms sprint to end U.S. oil glut

By Anna Driver and Scott Haggett, Reuters

22 hrs ago

The companies are racing to unlock a glut of crude in the U.S. Midwest, which has built up over the year due to rising supplies from Canada and North Dakota. They aim to ship it to the Gulf Coast where it will fetch a hefty premium.

It may end a period of dramatic upheaval in the U.S. oil market that handed Midwest refiners an unexpected windfall of cheap feedstock, robbed northern producers of richer profits, revived an era of rail-oil freight, roiled airline efforts to hedge fuel costs and threatened to erode the U.S. futures contract’s preeminence as the world’s most-traded benchmark.

Lies.  It’s all about extracting more money from the pockets of the middle class.

Crossposted from The Stars Hollow Gazette

If you are an economist you should be more, not less, outraged by the corruption and fraud of our financial elites.  As Matt Stoller points out, they represent market inefficiencies and introduce far greater uncertainty than mere regulation.

Matt Stoller: Nevada Attorney General Catherine Cortez Masto Cracks Open the Financial Crisis

Matt Stoller, Naked Capitalism

Thursday, November 17, 2011

Our essential economic problem is that our economy allocates resources through a mediating system of banks that are broken and/or corrupt. If you look at a chart of the recession, and then the recovery, you’ll notice that business investment perked up, but residential investment did not. The Fed lowered rates, bought Treasury bonds, and bought mortgage backed securities to lower rates for homeowners. But it’s not really working, because the monetary channel is corrupt. This indictment gets to that problem, it alleges tens of thousands of forged documents (or as a friend told me sarcastically, an afternoon’s worth of work for LPS). These documents represent foreclosures, economic loss, and clouded title. The indictments handed down, and the ones to come, show that corrupting our property laws and the basis of our economy is a crime.

…

First President Bush, and then President Obama, tried to reconstruct an economic system based on a corrupted transmission mechanism from the Fed to the real economy. This was the financial crisis, it’s why abstract derivatives based on subprime mortgages knocked trillions of productive output off of the economy. Corruption is really inefficient.

…

I think it’s important to begin considering criminal justice as a core element of economic policy. I’d like to hear from Suskind, Klein, Krugman, and others just where they think allowing massive systemic fraud fits into the analysis of what went wrong. After all, Eric Holder had ample prosecutorial discretion, so none of the usual arguments about political constraints apply. Allowing the corrupt monetary channel to continue was simply a policy choice. If the under-resourced Nevada Attorney General could make such a different policy choice, then a powerful by comparison White House and Justice Department could make it as well. And this sort of show of power does not operate in a vacuum. Taking on, and taking down, corrupt members of the elite would also have exposed all sorts of fracture lines, and would likely have change the Congressional dynamics that people argue is immutable. Bank executives would have had a strong personal incentive to fix housing problems and excessive debt loads, and politicians react differently when an act is officially deemed a crime.

The demand for justice, for a society to place certain activities outside of the bounds of socially acceptable, is not just about satisfaction of the public for wrongs committed. I get the sense that fraud for most economists is considered something of a side issue, a kind of aesthetic political problem to be ignored in favor of more significant questions of stimulus and regulatory policies. This is a baffling attitude. One of my favorite financial legal bloggers, Carolyn Sissiko, has pointed out that fraud actually can have significant macro-economic impacts by distorting bank balance sheets.

…

The felony indictments from the Nevada AG’s office are the first sign that the law enforcement community can take financial crimes seriously, that blowing up the economy through financial mismanagement can carry costs. There’s a lot of research to be done on the costs of fraud, and the costs of foreclosures. We don’t know that much about these costs, because there haven’t been investigations and there isn’t a lot of good public data. After all, we mostly just take our property rights system for granted, the notion that clouded titles or a broken $10 trillion mortgage market could inhibit growth simply was not imaginable a few years ago. What is clear is that there is a deep public hunger for justice. And I suspect, that if that hunger had been satiated a few years ago and if Holder had begun handing down indictments, mortgage servicer executives would have begun a serious loan workout program.

And our economy would probably be in much better shape. When you throw your capital into the hands of people who have no incentive to use it wisely, the economy suffers. When you enforce the rule of law, sound business models prevail and ordinary citizens have more confidence in the system and spend and invest accordingly. As an economic policy, justice works.

Unfortunately many economists are not scholars or scientists or even technicians, but merely enthusiastic members of the choir of Mammon, faith based believers who ignore evidence and logic.

Crossposted from The Stars Hollow Gazette

I am the anger, the just anger of the people, and that is why they listen to me and believe in me.

Why Tents Have Little to Do with Reason Behind Occupy Wall Street Eviction

By: Kevin Gosztola, Firedog Lake

Tuesday November 15, 2011 11:01 am

Bloomberg’s statement on the major police operation that resulted in hundreds of arrests, including the arrest of a reporter and city councilman, who was injured, shows once again the contempt and scorn the power elite have for democracy. He claimed, “The law that created [Liberty Square] required that it be open for the public to enjoy for passive recreation 24 hours a day. Ever since the occupation began, that law has not been complied with, as the park has been taken over by protestors, making it unavailable to anyone else.”

Essentially, Bloomberg is saying it had become nearly impossible for someone to go down to the park and be apathetic and ignore the critique of corporate greed and impunity for Wall Street criminals, which the occupation has been making since its first days. He is suggesting that if one cannot go down to the park for their lunch break and eat in peace, without having to hear about issues of unemployment, poverty or debt, then the city has to intervene on behalf of New Yorkers that want to be able to tune out.

This is similar to Oakland Mayor Jean Quan’s argument against Occupy Oakland camping. “Camping is a tactic,” she stated after the second raid of Occupy Oakland on November 14. “It is one that has divided Oakland, a city of the 99 percent. It’s time to work together on the issues of unemployment, foreclosures and education cuts. While the camping must end, the movement continues.”

The notion that camping should not be allowed because it presumably “divides” the 99 percent or that it should not be allowed because it does not allow for “passive recreation” all stems from the ideology of politicians like Bloomberg or Quan. They see themselves as democracy managers. As Sheldon Wolin writes in Democracy Incorporated: Managed Democracy and the Specter of Inverted Totalitarianism, they find that one of their main functions is “to foresee the unexpected, eliminate or cope effectively with the unforeseen (“risk management,” “crisis management”); to exploit or contain change insofar as it affects his or her enterprise; and to seize opportunities and aggressively use them to advance the power advantage of the firm – and of him- or herself.”

…

(I)t is all too clear why the encampment had to go today, Tuesday, November 15. It has less to do with the presence of tents and more to do with the growing power of Occupy Wall Street.

On November 17, occupiers had planned a massive day of action to mark their two-month anniversary. They planned to hold a massive demonstration at 7 am in front of the New York Stock Exchange. They were preparing a “block party the 1 percent” would “never forget.” They said they would “shut down Wall Street.” After that, they would get on subway trains to tell the “stories of disenfranchised Americans.” The occupiers planned to march across the Brooklyn Bridge and even hold a demonstration in Foley Square at 5 pm.

The massive day of action scared Bloomberg, the NYPD and city officials. It frightened the 1%, comrades of Bloomberg. They did not want to see what would happen on November 17 because they have already suffered from this movement. They have already seen it stop banks from slapping fees on debit cards and push hundreds of thousands of people to move their money from Big Banks into credit unions. They have been paying attention to how the people are building up organization to prevent banks from foreclosing on homes. And, those on Wall Street, more than anything, tremble at the movement’s momentum because it could produce investigations that would strip them of the immunity from prosecutions that they have enjoyed since contributing to the collapse of the economy in 2008.

The day of action is tomorrow, starting at 7 am.

Crossposted from The Stars Hollow Gazette

lambert has posted an interesting email from Warren Mosler, one of the advocates of Modern Monetary Theory.

It must be impossibile for the Fed to create inflation

lambert, Corrente

Sun, 11/13/2011 – 3:33pm

Hardly an hour goes by without some pundit pushing the possibility of some kind of run away inflation, with Zimbabwe and Wiemar rolling off the tongues of ordinary Americans everywhere. And Congressman and candidates of all persuasions continuously lambaste the Fed for debasing the currency.

…

For all practical purposes the Fed has done it all. And yet unemployment remains at depression levels of over 9% (and over 16% the way it used to be calculated not long ago) and the only thing keeping what’s called ‘inflation’ over 1% is a foreign monopolist supporting the price of crude oil.

So if inflation is this ominously lurking around every corner that requires eternal vigilance to keep from suddenly rearing it’s ugly head, why have all the Fed’s horses and all the Fed’s men not be able to inflate again? And why would anyone still think they can? I mean, we’re talking about college graduates with advance degrees and resources and power up the gazoo doing everything they can to reflate, and still failing after 3 long years? Not to mention the same in Japan for going on 20 years, where they have college grads with advanced degrees as well (though pretty much from the same schools).

Maybe this inflation thing is harder to get going than it looks? And what did go on in the German Wiemar republic, where if you parked a wheelbarrow full of money thieves would take the wheelbarrow and leave the money? Turns out it was those pesky war reparations that caused govt. deficit spending to soar to something like 50% of GDP annually, with most of that whopping deficit spending used to sell the German currency and buy foreign currency to pay their war reparations. As expected, that drove their currency down the rat hole in short order, and kept driving it down, causing that famous bout of hyper inflation that didn’t end until that policy ended. And when all that ended and policy changed the inflation stopped dead in its tracks. In one day. So how about Zimbabwe? Turns out they had a tad of civil unrest that dropped their productive capacity by about 80%, but govt. spending stayed high and too much spending power with too few goods and services for sale drove prices through the roof. Not to mention rumors of insiders using the local currency to buy foreign currencies for personal gain (sound familiar).

Applying this to the US to replicate the Wiemar inflation Congress would have to increase the deficit to about $8 trillion a year and then sell those dollars continuously in the market place, using them to buy the likes of yen, euro, and pounds. And replicating Zimbabwe would mean some kind of disaster that wiped out 80% of our real productive capacity and then continuing to spend federal dollars as if that never happened.

…

What all this tells me is that run away inflation, whatever that might mean, isn’t something hiding around every corner waiting to pounce. In fact, it takes a lot of work to get there, and not from the Fed, but from Congress. And not just what we’d call high levels of deficit spending, but ultra high levels of deficit spending.

I have no fear whatsoever of the Fed causing inflation. In fact, theory and evidence tells me their tools more likely work in reverse, due to the interest income channels. That’s because when they lower rates, they are working to remove net interest income from the private sector, and when they buy US Treasury securities (aka QE/ quantitative easing) they remove even more interest income from the economy. Remember that $79 billion in QE portfolio profits the Fed turned over to the Treasury last year? Those dollars would have otherwise remained in the economy.

So what’s the fundamental difference between what the Fed and can do and what Congress can do? The Fed can’t create net financial assets because they only buy, loan, and otherwise traffic in financial assets. Buying a bond or any other security only exchanges one financial asset for another and therefore doesn’t change the nominal (dollar) wealth of the economy. When the Fed buys a security, that security is no longer held by the economy. The Fed gets the security and the economy gets an equal dollar balance in a Fed account. The exchange is done at market prices so for all practical purposes it’s a equal exchange.

When Congress spends, however, it usually buys real goods and services, and not securities and other financial assets. So when the exchange takes place, Congress gets the real goods and services, which are not financial assets, and the economy gets dollar balances at the Fed, which are financial assets. So spending by Congress adds financial assets to the economy, to the penny, making it very different from what the Fed does.

And note that when the economy buys Treasury securities, all that happens is that the dollar balances the economy has at the Fed in what are called ‘reserve accounts’ get move to dollar balances in what are called ‘securities accounts’ at the Fed. Dollars in securities accounts and reserve accounts are all dollar financial assets. So shifting back and forth doesn’t change the dollar nominal wealth of the economy.

Crossposted from The Stars Hollow Gazette

Police have stormed Liberty Park tonight, as part of a co-ordinated series of round-ups across the country designed to crush the Occupy Wall Street Movement.

Well, it’s not going to work.

Time to hoist the colors.

In order to affect a timely halt to deterioriating conditions, and to ensure the common good, a state of emergency is declared for these territories by decree of Lord Cutler Beckett, duly appointed representative of His Majesty, the King. By decree, according to martial law, the following statutes are temporarily amended:

• Right to assembly, suspended.
• Right to habeas corpus, suspended.
• Right to legal counsel, suspended.
• Right to verdict by a jury of peers, suspended.

By decree, all persons found guilty of piracy, or aiding a person convicted of piracy, or associating with a person convicted of piracy, shall be sentenced to hang by the neck until dead.

You will listen to me! LISTEN! The other ships will still be looking to us, to the Black Pearl, to lead, and what will they see? Frightened bilgerats aboard a derelict ship? No, no they will see free men and freedom!

So what can we do?

I’ve always been an advocate of revolution in the small things.  We can make this country ungovernable and by that I mean we can simply refuse to do the things that are expected.

Why not stop spending?  My big gift this holiday season is a week’s supply of Chinese underwear, but I could skip it.  My relatives and friends (who am I kidding, my relatives) might receive a poem or picture since while my domestic skills are servicable they are hardly artistic.  Maybe a pie.

You can hardly stop going to work if you expect to get paid, but the performance standards of your bosses are a poor example that you need not exceed out of some misguided sense of loyalty or ‘team spirit’.

Deny your eyeballs.  Persistent propaganda rots your teeth as well as your brain.

You might deride my prescriptions as insufficiently dramatic, but what we have consistently seen from the overweening egos of the elite is the desire to be worshiped.

Fuck that shit.

You are Hapsburg lipped inbred morons and that I refrain from calling for pitchforks and torches or spitting in your faces as you walk the streets is a mark of the moral superiority of the “common man” over you evil rapacious twits.

You’ll run out of bullets and destroy all your wealth before you’ll break the will of people to be treated freely and fairly.

Crossposted from The Stars Hollow Gazette

There are a lot of reasons to hate on Nancy Pelosi, but corrupt profiteering isn’t one of them.

Being an un-democratic sell out to the Corporatist Third Way is.

Part 1

Part 2

Part 3

If you can’t tell the difference between left and right criticisms of the Democratic Party and our elected “Representatives”…

Why, you might just be a ‘bot.

There are a couple of reasons why I’m not just posting Dora The Explorer singing ‘We Did It’ and only one of them is that there are no good YouTubes.

Politico: Obama to delay Koch Bros-Keystone pipeline until after 2012 election

By Gaius Publius, Americablog

11/10/2011 01:55:00 PM

A cynic could read that phrase “avoid ecologically sensitive areas” as “avoid politically resistant areas” – but that’s not us. We live in Hope (and politely ask for Change).

Two notes: (1) Obama thinks this delay is an argument for voting for him in 2012. (2) That assumes he won’t hand you your hat the minute he never has to face another voter – for the whole of the rest of his life.

So a question for you: Is Obama’s decision to delay a Tar-Sands decision a reason to support him in 2012, or just the opposite?

Obama Punts Keystone Pipeline Decision Until After 2012 Election

By: Jon Walker, Firedog Lake

Thursday November 10, 2011 12:47 pm

The fact that the Obama administration is at least delaying the decision is a partial victory for environmentalists and grassroots activism. The delay proves massive protests and civil disobedience can have an impact on those in power. Getting a President to even delay plans to approve a huge project proposed by big oil is a monumental feat.

Given the concerns about potential health and safety risks to the Agallala aquifer over which the current route would pass, there are compelling, legitimate reasons to consider alternative routes.  Unfortunately, this move may only punt a decision to approve the pipeline until after the election.  It strongly feels like an act of pure political cynicism from President Obama, instead of a sincere response to the concerns of regular Americans.

Once Obama gets young environmentalists to vote for him in 2012, and he no longer needs to worry about facing the voters again, I suspect he plans to quickly approve the pipeline with a slightly different route, ignoring all other environmental concerns.

U.S. Delays Decision on Pipeline Until After Election

By JOHN M. BRODER and DAN FROSCH, The New York Times

Published: November 10, 2011

While environmental groups welcomed their temporary victory on the pipeline project, some expressed skepticism about the president’s motives. Glenn Hurowitz, an environmental activist and senior fellow at the Center for International Policy, said the delay could leave the final decision in the hands of Mr. Obama’s Republican successor.

“This decision just puts off a green light for the tar sands by a year,” Mr. Hurowitz said in an e-mailed statement. “That’s why I’m a little dismayed at suggestions that this kick-the-can decision means environmentalists will enthusiastically back President Obama in 2012. Is the price of an environmentalist’s vote a year’s delay on environmental catastrophe? Excuse me, no.”

I personally put more faith in the fundamental economic unfeasibility of the project.

Keystone XL: Pipe Dreams

By Paul Tullis, BusinessWeek

November 10, 2011, 5:15 PM EST

As Phoenix Woman puts it-

Late Night FDL: Keystone XL – Because Everything Is Connected

By: Phoenix Woman, Firedog Lake

Thursday November 10, 2011 8:00 pm

TransCanada wants the Keystone XL pipeline so it can a) more readily reach ports capable of hosting supertankers and b) drive up (that’s right, drive up) the price of fuel in the Midwest. Here’s how it works:

The real reasons a pipeline is “needed” are not because TransCanada wants to put that oil in our cars or give us jobs, but because they want to get to a port to ship it overseas, and the British Columbia ports are too shoaled up to accommodate oil supertankers; the biggest boats they can handle are less than a thousand feet in length, and supertankers are typically well over 1,100 feet. (By the way, the unsuitability of the BC ports renders the “we’ll just sell it to China if you don’t buy it” argument ridiculous; without the BC ports, there’s no cost-effective way to get it to China, or any other country not named the U.S. of A.) As for the effect on US gas prices, check this out (courtesy of Bernie Sanders and The Guardian, which published what no major US paper likely ever would).

…

The pipeline is the only way the frozen tar sands muck – which must be specially and expensively treated for it to even be able to flow in a pipe in the first place – can be made profitable for TransCanada.

Emphasis mine.  Well, except the ‘up’ which is in the original.

If you don’t like Phoenix Woman’s references you can check out this yellow bordered News Corp publication called The National Geographic for Harper and TransCanada’s plan B.

A Story of the 1%

Originally posted at The Stars Hollow Gazette, I think this story stands alone- ek.

Well, there are a couple of different threads going on in the world of Bernie Ecclestone and Formula One (which Bernie works very hard to make the same thing).

Just two days ago Bernie was in Munich testifying in the Gribkowsky Case.  Bernie’s story is that his $44 Million payment wasn’t a bribe to ensure that Gribkowsky sold the interests of the Kirsh Group at a loss so that it wouldn’t trigger the profit sharing agreements, INSTEAD it was extortion money given Gribkowsky so he wouldn’t testify that Ecclestone’s (then) wife’s $8 Billion Trust Fund was in fact under Bernie’s control, allowing him to evade $3.2 Billion in taxes and penalties (here and here also).

You see, that makes it so much better.

Like James Murdoch however, Bernie still faces contradiction under oath from a lawyer associated with Bambino Trust and other Formula One related entities, Stephen Mullins; but we’ll get back to Jimmy-boy later.

2012 is the last year teams will be racing under the current extension of the Concorde Agreement between the Formula One Teams Association, CVC, and the FIA and Scuderia Marlboro UPC and McLaren at least (just the current 2nd and 3rd most powerful teams this season and 1st and 2nd historically).  Just as he did in 2005, Bernie seems poised to give Maranello an exclusive bribe to stay loyal, this time $100 Million in ‘chump change’.  FOTA canceled a scheduled meeting this weekend.

Still, Ecclestone is under increasing pressure, summarized in this extensive Bloomberg article–

Rupert Murdoch’s News Corp. and the Agnelli family’s Exor SpA want to buy the 63.4 percent of Formula One owned by London- based buyout firm CVC Capital Partners Ltd. through its Jersey, Channel Islands-based holding company Delta Topco Ltd.

The would-be buyers are pushing ahead despite News Corp.’s run-ins with U.K. authorities over a phone-hacking scandal involving one of its newspapers, according to two people with knowledge of the situation.

Bernie’s continued control is complicated by the fact that he only owns a 5.3% direct stake while 15% is owned by his ex-wife’s Bambino Trust.

The Bloomberg piece also reports this incident-

It was 10 a.m. on a June day in 2005 as fans filed into their seats for the U.S. Grand Prix. Two days earlier, a Michelin & Cie.-made tire on Toyota team driver Ralf Schumacher’s car had burst on turn 13 and the auto smashed into a wall at 175 miles per hour, Bloomberg Markets magazine reports in its December issue.

The tiremaker said it couldn’t rule out more accidents.

As the managers gathered around, Ecclestone called Max Mosley, president of Formula One’s ruling body, the Federation Internationale de l’Automobile (FIA), at home in Monaco in a last-minute attempt to persuade him to alter the racetrack layout so the grand prix could proceed smoothly.

Mosley was unmoved, according to Paul Stoddart, then owner of the now-defunct Minardi team, who was in the trailer. He wouldn’t change the rules.

With the 1 p.m. start nearing, the crowd swelling toward 120,000 and a public relations disaster looming, Ecclestone lost his temper and swore at Mosley, by Stoddart’s account. As if on cue, irate fans hurled beer cans onto the racetrack after 14 of the 20 cars withdrew from the race.

…

For his part, Ecclestone now says Mosley was “probably right” to stop the race because the FIA president could have faced a murder charge if another crash on the same turn caused a fatality.

Nice guy eh?  Mosley’s intervention was probably the only thing that prevented a Dan Wheldon incident.

Max, for all his reported goose stepping sado-masochistic sex romps, had a relatively good week; winning a $51,000 verdict against News of the World and Nigel Thurlbeck for invasion of privacy, while James Murdoch sat before a Parliamentary inquiry again-

Murdoch’s Former Allies Deliver a Counterpunch

By RAVI SOMAIYA, The New York Times

Published: November 11, 2011

The two men had presented a united front with Mr. Murdoch through years of scrutiny since the scandal surfaced in 2006. But that cracked after Mr. Murdoch’s first round of testimony, in July, as the panel tried to determine how long he had known of potentially rampant hacking at The News of the World, now defunct.

Any remaining bonds between them shattered after Mr. Murdoch’s second round, on Thursday. In both appearances before the parliamentary committee, he was asked sharp questions about clear evidence of broader hacking that circulated among his executives in 2008. Mr. Murdoch sought to deflect the panel’s focus from himself and toward Mr. Myler and Mr. Crone.

After the first round, the two men released a statement rejecting Mr. Murdoch’s testimony that they had not informed him of evidence suggesting more widespread hacking: an e-mail that indicated more than one reporter at The News of the World had used information from hacked voicemail messages for stories. On Thursday, after Mr. Murdoch said their statements were “inconsistent and not right” and “misleading,” the rejoinder was swift.

“It is regrettable,” Mr. Crone counterpunched in a statement, “but I can perfectly understand why James Murdoch felt the need to discredit Colin Myler and myself. The simple truth is that he was told by us in 2008 about the damning e-mail and what it meant in terms of wider News of the World involvement.” He concluded: “At best, his evidence on this matter was disingenuous.” Mr. Myler, too, said he stood by his account.

You are of course welcome to join me at 7 am tomorrow for the penultimate race at Yas Marina– ek.

Crossposted from The Stars Hollow Gazette

Stephen haz them.

Crossposted from The Stars Hollow Gazette

So the International Energy Agency (not exactly a cabal of communists) is out with their new report on Energy Policy and Global Warming.

The news is grim.  Unless we drastically change direction in the next 5 years there will be climate change on a scale not seen since the Younger Dryas (those who would reject the analogy would be well advised to consider that this “Ice Age” was caused by an influx of fresh glacial water disrupting ocean currents due to… wait for it… Global Warming) 12,000 years ago.

The burning issue of energy cannot wait for economic good times

Carbon emissions are rising by record amounts, stoked by political inaction and fossil fuel subsidies. We are almost out of time to douse the climate change crisis

Damian Carrington, The Guardian

Wednesday 9 November 2011 05.02 EST

The IEA predict a temperature rise of 3.5C if current energy policies around the world are delivered but no more. That means a future world of mass migration, severe water shortages and England having the summer climate of Morocco today. If those policies fail to materialise, the IEA predicts 6C. That’s Armageddon: large parts of the planet uninhabitable and the risk of runaway warming threatening the rest.

…

With the economies of developed nations stagnant, some are pleading poverty as an excuse for inaction. But, says the IEA, “delaying action is a false economy”. It states that avoiding $1 of energy investment before 2020 will require $4.30 to compensate after that date.

If money needs to be saved, start with the $409bn gifted to the fossil fuel industry in 2010 in subsidies. The G20 backed this idea in 2009 but has yet to deliver. The subsidies do not enable the impoverished to access energy: just 8% of the subsidies reach the world’s poorest 20% of people. Renewable energy, the only truly sustainable source of power, received just $66bn of support last year, and even the IEA thinks this will rise to no more than $180bn by 2035.

Fossil Fuels Got Six Times More Aid Than Clean Energy, IEA Says

By Ben Sills, Bloomberg News

Nov 9, 2011 5:00 AM ET

Fossil-fuel consumers worldwide received about six times more state subsidies last year than were given to the renewable-energy industry, according to the chief adviser to oil-importing nations.

…

G-20 nations spent $160 billion supporting the production and consumption of fossil fuels last year, led by Saudi Arabia’s outlay of $44 billion, the IEA said in its World Energy Outlook published today. Iran spent the most overall, shelling out $81 billion to support fuel sales.

While governments argue their policies are designed to help the poorest members of society, they generally fail to meet that goal, the IEA said. Just 8 percent of subsidies reached the poorest 20 percent of each country’s population last year.

“Fossil-fuel subsidies as presently constituted tend to be regressive, disproportionately benefitting higher income groups that can afford higher levels of fuel consumption,” the report said. “Social welfare programs are a more effective and less distortionary way of helping the poor than energy subsidies.”

World headed for irreversible climate change in five years, IEA warns

If fossil fuel infrastructure is not rapidly changed, the world will ‘lose for ever’ the chance to avoid dangerous climate change

Fiona Harvey, Environment Correspondent, The Guardian

Wednesday 9 November 2011 05.01 EST

The world is likely to build so many new fossil-fuelled power stations, energy-guzzling factories and inefficient buildings in the next five years that it will become impossible to hold global warming to safe levels, and the last chance of combating dangerous climate change will be “lost for ever”, according to the most thorough analysis yet of world energy infrastructure.

…

The central problem is that most of the industrial infrastructure already in existence around the world – the fossil-fuelled power stations, the emissions-spewing factories, the inefficient transport and buildings – are already contributing to the current high level of emissions, and will continue to do so for decades to come. Carbon dioxide, once released into the atmosphere, stays there and continues to have a warming effect for about a century, and industrial infrastructure is built to have a useful life of several decades at least.

Yet, despite intensifying warnings from scientists over the past two decades, the new infrastructure even now being built is constructed along the same lines as the old, which means that there is a “lock-in” effect – high-carbon infrastructure built today or in the next five years will contribute as much to the stock of emissions in the atmosphere as previous generations.

U.S. to Open New Areas to Offshore Drilling

By JOHN M. BRODER, The New York Times

Published: November 8, 2011

WASHINGTON – The Obama administration on Tuesday announced its proposed five-year plan for offshore oil drilling, which calls for opening new areas in the Gulf of Mexico and Alaska but bars development along the East and West Coasts.

…

The plan, which is subject to months of public hearings and possible revisions, expands the areas in the Gulf of Mexico that are now under development, including some near Florida that have been off limits. It will also make available broader parts of the Arctic Ocean off the North Slope of Alaska and in the Cook Inlet off the state’s southern shore.

…

Environmental advocates responded vehemently to the new plan, which they said put sensitive coastlines, waters and fisheries at risk in Alaska and in the gulf.

“Last year’s disaster in the Gulf of Mexico was supposed to be a wake-up call about the dangers of offshore drilling,” said Miyoko Sakashita, oceans director at the Center for Biological Diversity. “But it looks like President Obama hit the snooze button and slept right through it.”

Several groups pointed out the difficulties of dealing with a potential spill in the Arctic, where the nearest Coast Guard facility is almost 1,000 miles away.

David J. Hayes, the deputy interior secretary, acknowledged that the infrastructure did not now exist to prevent or respond to a major spill in the Arctic. Mr. Hayes said a response could be compromised by inclement weather, a lack of deep harbors, a shortage of appropriate vessels and inadequate oil transportation resources.

…

Frances Beinecke, the president of Natural Resources Defense Council and a member of the panel Mr. Obama named to investigate the BP spill, said approving new drilling without adequate safety measures was a “reckless gamble.”

“The president’s oil spill commission put forth a game plan to improve the industry’s safety, but it has yet to be realized,” Ms. Beinecke said in a statement. “Congress has failed to pass a single law to better protect workers or the environment. Industry has not invested sufficiently in developing the technologies needed to prevent future disasters. And the government still needs additional resources and science in order to effectively police an industry that so desperately needs it.”

Crossposted from The Stars Hollow Gazette

Key Obama Aide Relinquishes Some Duties

By CAROL E. LEE, The Wall Street Journal

NOVEMBER 8, 2011

On Monday, Mr. Daley turned over day-to-day management of the West Wing to Pete Rouse, a veteran aide to President Obama, according to several people familiar with the matter. It is unusual for a White House chief of staff to relinquish part of the job.

A senior White House official who attended Monday’s staff meeting where Mr. Daley made the announcement said that his new role has not yet been fully defined. But in recent weeks, Mr. Daley has focused more on managing relations with influential outsiders.

…

A former executive at J.P. Morgan Chase & Co. and a Commerce secretary in the Clinton administration, Mr. Daley was widely hailed as a breath of fresh air for a White House seeking to cut deals with emboldened Republicans and repair the administration’s soured relations with business.

Mr. Daley made strides in his outreach to business, including leading a White House effort to ease government regulations and shepherding three free-trade deals through a divided Congress. But the relationship has fallen short of expectations. White House officials acknowledge even an emissary of Mr. Daley’s caliber could go only so far. Mr. Obama’s recent push to boost taxes on wealthy Americans has complicated that effort.

On the congressional front, one big problem has been a tense relationship between Mr. Daley and Senate Majority Leader Harry Reid (D., Nev.), which soured during the budget negotiations this year, people familiar with the matter said. Mr. Daley angered Democrats by trying to cut side budget deals with Republicans. He stoked the tension recently by telling a columnist for the website Politico that “both Democrats and Republicans” have made it difficult for Mr. Obama to govern.

Obama’s Chief of Staff Steps Down Amid Behind-the-Scenes Shitstorm

By Seth Abramovitch, Gawker

Nov 8, 2011 2:49 AM

The “recalibration of Mr. Daley’s portfolio” (the WSJ euphemisms are like poetry!) is designed to “smooth any kinks in the president’s team as it braces for the overlapping demands of governing while campaigning for re-election.”

Example of a “kink”: Remember when Obama announced he’d be unveiling his big jobs plan during a GOP presidential debate, and everyone was thrilled that he was finally showing a spine? And then John Boehner poked his head out of his irradiating clamshell to say, “No fucking way?” And then the president backed down and looked like a total wuss again? Well, Obama read the riot act to his staff, demanding to know how they could have failed to see that conflict coming. All bucks stopped at Daley’s desk – he was the one who said everyone had signed off on that first date.

Crossposted from The Stars Hollow Gazette

SEC Uses "Because I Said So" Tactic With Judge Rakoff

By Matt Levine, Dealbreaker

07 Nov 2011 at 4:39 PM

The quick background: Citi decided to make a big prop bet against some mortgages, so it structured a synthetic CDO with the exposures it wanted to short and sold it to some dopes, keeping virtually all of the short side of the trade on its books. This was a good idea and Citi made $160mm, but it worked out less well for the dopes. The SEC sued Citi for not telling the dopes certain things, like that it had picked the mortgages involved because of their exceptional badness, and they signed up a $285 million settlement.

…

(T)hese are very silly words. “Scienter-based violations of the securities laws” just means that GS, unlike Citi, was charged with intentionally stuffing dopes with bad CDOs. True! The SEC charged GS with doing that intentionally, and it only charged Citi with doing the same thing “negligently,” i.e., something a little bit north of “accidentally.” But, like, the SEC just decided to charge it that way – and they don’t explain why. It is sort of unimaginable that anyone could accidentally create a mortgage-backed security filled with loans you know are going to fail so that you can sell it to a client who isn’t aware that you sabotaged it by intentionally picking the misleadingly rated loans most likely to be defaulted upon. Like, you have to pay attention in order to do that. You have to pick the loans, and write stuff down, and tell people about the thing, and convince them to buy the thing. The SEC gamely tries to explain how this could in fact all be due to negligence, but it doesn’t really matter – the point is that GS and Citi did pretty much the same thing, so if it’s negligence for Citi it’s negligence for GS. The only explanation of why Citi gets off easier than GS is “because we chose to let Citi get off easier than GS.”

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The real explanation is probably much closer to the one Citi’s lawyers hit upon: that Citi is the all-time league table leader in losing tons of money on CDOs. To a lot of people, Goldman really does look like the evil genius who went heavily net short the housing market and made a ton of money. Citi are just some goofballs who lost a ton of money on a ton of CDOs, and half-accidentally made some money on one CDO. That pattern does sort of make Goldman look like they had a diabolical plan to screw everyone, while Citi’s screwing a few people looks, well, negligent.

It’s just that this is a very bad legal theory. Shorting the housing market to your customers when you have no inside information about particular mortgages, but just did better analysis than them of the macro data, is … it’s kind of unpleasant behavior, maybe, but it’s probably not fraud. Being generally long mortgages but short one particular trade because you’ve secretly cherry-picked it to be the single worst CDO you can conceive of with your somewhat limited imagination, that’s – I mean, that’s stupid, but it’s also a lot closer to actual fraud.

Citigroup, SEC Defend $285 Million CDO Settlement as Fair

By Bob Van Voris and Thom Weidlich, Business Week

November 08, 2011, 12:38 AM EST

Rakoff, who in 2009 rejected a $33 million settlement between the agency and Bank of America Corp., asked Citigroup and the SEC to address nine questions about the proposed settlement. The questions included, “Why should the court impose a judgment in a case in which the SEC alleges a serious securities fraud but the defendant neither admits nor denies wrongdoing?”

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The SEC argued that the U.S. Supreme Court has endorsed settlements in which the defendant doesn’t admit liability. If Citigroup had admitted fault in the settlement, that could be used against it by private investors suing the bank, the SEC said.

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In its own filing today, Citigroup also said the settlement was fair and asked the judge to consider the impact on its shareholders of “any outcome other than a negotiated ‘no admit, no deny’ settlement.”

Promises Made, and Remade, by Firms in S.E.C. Fraud Cases

By EDWARD WYATT, The New York Times

Published: November 7, 2011