2nd Iceland volcano issues warning: Scientists say powerful Katla is ‘close to failure’ (5/27/2010 MSNBC)
"LONDON - A second, much larger volcano in Iceland is showing signs that it may be about to erupt, scientists have warned.
"Since the start of the Eyjafjallajökull eruption, which caused cancellations of thousands of flights in Europe because of a giant ash cloud, there has been much speculation about neighboring Katla.
"An initial research paper by the University College of London Institute for Risk and Disaster Reduction said: "Analysis of the seismic energy released around Katla over the last decade or so is interpreted as providing evidence of a rising ... intrusive magma body on the western flank of the volcano."
""Earlier seismic energy release at Katla is associated with the inflation of the volcano, which indicates it is close to failure, although this does not appear to be linked to seismicity around Eyjafjallajökull," it added.
""We conclude that given the high frequency of Katla activity, an eruption in the short term is a strong possibility," the report said. "It is likely to be preceded by new earthquake activity. Presently there is no unusual seismicity under Katla."" [Emphasis is mine. The article continues.]
Natural (like these Icelandic volcanos) or man-made (Gulf of Mexico oil spill, 'flash crash' of the US stock market, euro crisis), when things go out of control they seem to do so all at once. Not a gradual, orderly disintegration but a sudden, violent dislocation.
These events are 'complex systems' where the whole is more than its parts. Such a system tends to go haywire seemingly all of a sudden, as chaos theory predicts.
Friday, May 28, 2010
2nd Iceland volcano issues warning: Scientists say powerful Katla is ‘close to failure’ (5/27/2010 MSNBC)
and Obama is off to a vacation, again. (I did hear that he will drop by for a photo op somewhere on the Gulf coast on Friday.)
"It's too late."
Obama cannot really blame Bush and Cheney this time, though I'm sure he will try his best. It was the Obama administration who OKed BP and Transocean to dig this particular well without an environmental impact report.
Thursday, May 27, 2010
From the Dylan Ratigan Show on MSNBC on May 26, 2010. Two oil industry experts, Matthew Simmons of Simmons & Company International and Nicholas Pozzi of Wow Energy Solutions discuss the spill, top kill operation, and alternatives to stop the Gulf oil spill.
They don't think whatever is coming out of the pipe on on BP's live cam is not the cause of the giant oil plumes under the Gulf, sucking up oxygen dissolved in the water. They think there is another leak that is causing those plumes and suspect that's where the wellhead actually is, and the use of chemical dispersants in deep water will do more damage than good. 'Hide the enemy' may have been the BP's solution [and I should add, the government solution, too], but that's not what the industry would have done, according to Pozzi.
They both mention a solution using supertankers (or tankers of any size), to which BP has turned a deaf ear.
This should have been a navy operation, they say. A carefully placed bomb would have shut down the well. "We've wasted so much time."
Oh by the way, the casing doesn't have O-rings. BP didn't put them in. No way to seal it, basically.
Stocks jump after China shows confidence in Europe (5/27/2010 AP)
"NEW YORK (AP) -- Stocks had another turnaround Thursday and rocketed higher after China reassured investors it doesn't plan to sell the European debt it holds.
"The Dow Jones industrial average rose about 200 points in afternoon trading, while Treasury prices tumbled as traders took money out of safer investors and put it into riskier assets like stocks and commodities.
"The show of confidence in Europe let the market resume a rally that stalled late Wednesday following a Financial Times report that China was considering cutting its exposure to European debt. That would have signaled that China didn't think Europe would be able to contain the crisis. The agency that manages China's $2.5 trillion in foreign reserves denied the report." [The article continues.]
This circus of a stock market needed a word from the ringmaster, who says he will keep inflating the circus tent.
Obama: Gov't in charge of oil disaster response (5/27/2010 AP)
"WASHINGTON (AP) -- President Barack Obama moved aggressively to show his government is in charge of the Gulf oil spill on Thursday, calling the gushing leak an "unprecedented disaster" and blasting a "scandalously close relationship" between oil companies and regulators."
(Oh really. What a surprise. Did you return the campaign money from BP?)
"Obama said many critics failed to realize "this has been our highest priority."
(If that's the case, You have a funny way to show it.)
But whatever. Algo bots have been unleashed for the day, and they are going wild. Dow is up 243 points as of 2:24PM EST, S&P up 30 points, Nasdaq up 70 points, and market analysts are busy
so reports Zero Hedge, citing an article on Coinupdate.com.
Greek Scramble For Physical Brings Gold Price To $1,700 Per Ounce (5/26/2010 Zero Hedge)
"And there are those who wonder how Sprott's PHYS could have traded at "ludicrous" NAV premium of over 20%. Coinupdate.com reports that prices at which the Greek Central Bank is selling one ounce gold equivalents are as high as $1,700 (40% over spot), and prices on the black markets are even higher. The punchline, as Athens slowly returns to a forced gold standard: " A popular spot for street vendors to sell their coins is near the Athens Stock Exchange. There the traders wait for citizens to bring payments received from unloading their paper assets like stocks and bonds." That's good - downtown Manhattan close to the NYSE has some free space for gold vendors to set up shop as well, they just need to push some of the frontrunning/collocation boxes off to the side. And in other rhetorical ruminations, is it safe to say that the last days of the fiat experiment are among us now that people themselves are bypassing the government and enforcing their own gold standard?" [The article continues.]
Greeks are buying British Sovereigns with gold content .2354 oz for $409, which translates to over $1,700 per ounce of gold.
In crisis, Greeks are turning to the real money throughout the ages. It was their mathematician who discovered how to assess the purity of irregular gold crown while taking a bath, jumped out and ran naked on the streets of Syracuse screaming "I've got it!".
Gold ended today at $1211.50. On the spot market, it is currently $1,213, but it is actually being sold more than bought. Weakened US dollar gives it more boost to overcome selling pressure. (See Kitco's Gold Index.)
Wednesday, May 26, 2010
See the debt clock ticking on the left column of this blog? It's passed $13 trillion. The debt limit was raised in February this year to $14.3 trillion.
Larry Summers wants the second stimulus, $200 billion
Organized labor unions wants union pension bailout, $165 billion
I think the supplemental appropriation bill for 2010, an omnibus bill of Congress spending sprees, is coming in June. A few hundred billion dollars there.
And remember, the federal government's accounting method is CASH ACCOUNTING. They don't account for it, until they actually spend it.
Here's the link to the live feed from their ROV (remotely operated vehicle).
With all the criticism, it is BP who is doing something to stop the oil flow, as the Washington politicians and regulators take a vacation, watch porn, use meth, attend a political fundraiser (she had to cancel it), or otherwise just talk (or not talk).
Here's the latest from BP's "Gulf of Mexico response" website:
Update on Gulf of Mexico Oil Spill Response - 26 MayWhat is 'Top Kill' and how is it done? BP has a video presentation on the procedure, which can be viewed at this link.
A series of diagnostic tests are currently underway on the Deepwater Horizon’s failed BOP to improve understanding of the status and configuration of the BOP and determine whether a ‘top kill’ procedure can be successfully executed. These tests involve pumping drilling fluids into the BOP to measure pressures and validate flow paths. When complete, a decision will be made on the execution of the top kill procedure itself.
This top kill procedure has not been carried out offshore at 5,000 feet water depth before, and its success cannot be assured. It is expected that the entire procedure could take up to two days, and it cannot be predicted how long it will take for the operation to prove successful or otherwise. Should it be necessary, plans and equipment are in place to combine the top kill process with the injection under pressure of bridging material into the BOP to prevent or limit upward flow through the BOP. (Full press release here.)
That is high-tech to me, more than anything: To be able to design, build, install, and operate a system under 5000-feet of water. Amazing what human mind can conceive, and hands that can build.
Tuesday, May 25, 2010
What a spectacle every day!
It opened in deep red alright, did some DCB (dead cat bounce). Then the news hit that the derivatives regulation may be ditched (longs can thank Barney Frank). (Sooo... what's the point of "reforming", Barney?) Another miraculous recovery, except this time the algo bots were programmed to more closely simulate humans and not to shoot up 100 points on Dow in 10 minutes. They duly took time, 2 hours, to achieve yet another show of strength of the US economy. (Never mind that the stock market is NOT the economy.)
The chart is 15-minute Dow 5-day. It ended today 10 points below yesterday's low.
Europeans had better be moving their funds to the US stock market, where day in and day out and during the dead of night, Goldman, JP Morgan, Citi, algo bots of quant funds, the PPT, NY Fed, and God knows who else, work diligently to prop up the market the best they can. The ECB is yet to learn the trick.
Futures are cheerfully green: Dow +64, S&P 500 +7.80, Nasdaq 100 +13.50. (Data: Bloomberg, as of 20:30, plus or minus one minute..)
Dow -190, S&P 500 -23.90, Nazdaq 100 -35.75. Screen shot from Bloomberg.
Ostensible reasons: North Korea threat, Euro debt crisis. Could be true, and a whole lot more that we don't know about.
When a complex system collapses, it is not a gradual, orderly decline over a long period of time. All it takes is a trigger, any trigger. It doesn't need to be a big one either.
Monday, May 24, 2010
to the tune of $165 billion so that the union workers get to enjoy the cushy pension for now, the future, the eternity.
Union Pension Bailouts are Coming (Rick Manning, 5/19/2010 GetLiberty.org)
"Just when you thought that Congress might have run out of bailout ideas for politically-favored groups along comes Senator Robert Casey’s (D-PA) bill to bailout union pension funds.
"Operating under the benign sounding title, “Create Jobs and Save Benefits Act of 2010”, Casey’s bill is actually nothing more than a transfer of approximately $165 billion in Big Labor’s pension debt over to the U.S. taxpayer.
"...Moody’s rating service has found that large multi-employer pension funds are underfunded by $165 billion. This includes funds that either pay or secure the retirement for many Teamsters, AFL-CIO and SEIU members and other large, politically connected unions. Not surprisingly these unions are using the clout gained from spending their cash on politics rather than pensions to demand a taxpayer bailout.
"Enter Senator Casey and his House cohorts in crime, Earl Pomeroy (D-ND) and Pat Tiberi (R-OH), who have a solution. Keep the benefits for the members of the Multi-Employer Pension Funds the same, but have them guaranteed by the Pension Benefits Guaranty Corporation (PBGC).
"Who guarantees the PBGC? You guessed it, you and I, the American taxpayer. Just another proposal pushing one set of favored constituents over the rest that ensures the dizzying growth of our nation’s deficit continues unabated.
"...Incredibly, among the eight House Republicans who have joined Pat Tiberi in supporting adding $165 billion to our national debt to bail out the irresponsible management of these pension funds are: John Linder (GA), Peter Roskam (IL), Thaddeus McCotter (MN), Steven LaTourette (OH), Jo-Ann Emerson (MO), and Aaron Schock (IL). [All Midwestern states. Not surprising.]
"...It always sounds good to say that you are helping preserve people’s pensions, unfortunately in this instance, Casey, Pomeroy and Tiberi would ask the vast majority of working American’s without a defined pension to put less into their personal retirement account in order to preserve the status quo of union member retirees.
"...This is a seemingly elegant solution that instead could be the tipping point that our debt-stressed economy from which our debt ridden economy is never able to recover." [Emphasis is mine. Read the whole article at the link above.]
Don't you love it? It's an organized robbery and we are told it's for the good of the country. (And Floridians want to execute a man who stole $4 socks.)
The bill, "Create Jobs and Save Benefits Act of 2010", can be found on Thomas; the bill number is S.3157.
Needless to say, Teamsters is all out in support to rob the fellow non-union Americans. They sure have gotten very bold ever since their champion reached the White House.
Florida's Sun Sentinel, citing Orlando Sentinel, reports that a man got life in prison for stealing $4 package of socks, because he was a repeat offender and also happened to carry a handgun at the time of shoplifting.
Life in prison for stealing $4 package of socks (5/23/2010 Sun Sentinel)
"What started as shoplifting and turned into an armed robbery when the suspect revealed a handgun to a loss-prevention officer has resulted in a mandatory sentence of life in prison for a Daytona Beach man, reports the Orlando Sentinel.
"A jury deliberated for about an hour April 14 before finding Dean Rockmore, 48, guilty of robbery with a firearm, assistant State Attorney Chris Kelly said. On Friday, Circuit Judge Margaret Hudson found that Rockmore qualified as a prison releasee re-offender and handed down the life sentence, Kelly said.
"Rockmore was released from prison Jan. 26, 2009, and committed the robbery about two months later on March 29, according to court documents.
"An employee at the DeLand Walmart saw Rockmore place packages of tee shirts and socks into the front of his pants and stopped him, reports show. Rockmore ran when customers came between him and the worker, and he was chased into the parking lot.
"Rockmore dropped the shirts, but he got away with a $4 package of socks after the Walmart employee backed off when Rockmore lifted his shirt to show a gun, police said."
So, a shoplifting became armed robbery, even if he didn't use the gun to take the shirts and socks from the store.
What's interesting to me is the response of the readers. Majority of them decry "yellow journalism" for failing to mention on the headline that this guy had a gun, and are happy to see the man behind bars for life for stealing $4 socks; some are even calling for execution by electric chair or by a firing squad. One person says his organs should be auctioned off.
For $4 socks.
What kind of hysteria is this?
The very few sane posts that I could find:
"Another example that we are interested in incarcerating people because it is a money making venture. People who commit murder ger 8 years and this guy who didn't hurt a fly gets life and the dopes on this website think it's justice. I hope others see this and decide to shoot their way out next time."
"Jeeze, a white guy??? What's going on in Florida????"
My guess is that it is easier for people to get the sense of $4 package of socks and a handgun than to understand the theft by Wall Street banks of tens of bilions of dollars and their weapons are financial derivatives. Under the financial "reform" bill that passed the Senate, the chief of these banksters, the Federal Reserve, is set to protect you and me who have the keen sense of $4 package of socks.
Sunday, May 23, 2010
So reports Zero Hedge, citing Bank of America comment.
Presenting What Could Be The Oddest Capital Flow Observation In History (Tyler Durden, 5/23/2010 Zero Hedge)
It is no secret that the last few weeks saw massive liquidations along all asset classes. The result was a huge outflow across almost all products: Loans, HY Bonds, Municipals, Commodities... all a typical reaction to broad based liquidations. However, note we said "almost" - one class that actually posted a $6.2 billion inflow was equities. Yet not is all as it seems: peeking underneath the hood indicates that the bulk of this inflow, or $10.3 billion, had to do with inflow into ETFs... or rather, just one ETF - the SPY, accounting for $10.1 billion. Did someone prop up the entire equity market last week by massively pushing capital into the most liquid equity proxy available?
The plot thickens: as Bank of America points out: "The number of SPY's shares outstanding rose by 5.3% on Thursday and Friday of last week (May 6-7th), at the time when S&P 500 was trading lower on both days." BofA asks: "The question then becomes if this large intake into SPY was a part of the rogue trade that took place on Thursday, May 6th, or was it part of bona-fide rush by investors to buy equities at their lows...This suggests to us that the inflow into SPY, and by extent the overall equity category, was at least partially attributable to that trade dislocation. Potentially, some form of market-making activity closing on divergences between shares, ETFs, and derivative instruments may have been responsible for positive net interest in SPY." That, or is this the biggest faux pas ever conducted by the "invisible hand" which openly flooded the market with $10 billion in the form of ultra liquid SPY, at a time when massive derisking was taking all single names lower. A much more relevant question according to Zero Hedge, is whether there is any sense trading single names anymore - all the action is now in the form of index equity proxies now that liquidity in single names is virtually non-existent: this means trading only SPY and ES. Was last week's freak occurrence a huge ETF rebalancing, an implosion in one or more market neutral funds, which were forced to cover billions in SPY shorts as single names were being sold off en masse, or was this merely a direct intervention into equities by the Federal Reserve? We are confident that the SEC will immediately rush to answer all these questions and will have a definitive conclusion within a week. [Emphasis is original.]
With the stock markets around the world diving last week, you would think the investors had gone to grab liquid Treasury bills, right?
Looking at the last week's auction result, Treasury bills were out of favor, even if the rates were higher. 4-week bill result was lackluster to say the least: bid to cover ratio was only 3.72 (4-week bill's bid to cover is usually well over 4), and the Treasury had to give a higher rate on 4-week bill than on 56-day CMB (Cash Management Bill).
Short-term Treasury bills have been under pressure for some time. Higher rates, lower bid to call ratio, and the increasing percentage of direct bidders.
Borrowing short-term fund and spend (invest) in longer-term projects - oh wait, wasn't that what destroyed Bear Stearns and Lehman Brothers when the short-term fund dried up?