Debt, Deficit, Derivatives & Delusions - 04/30/07

China's Protein Gap Will Stoke Global Inflation: Andy Mukherjee

The ``tortilla crisis'' that shook Mexico in January may not have been a flash in the pan.

If Jing Ulrich, the Hong Kong-based chairwoman of China equities at JPMorgan Chase & Co., is correct, everything from beer to steak might just become more expensive globally.

American Monetary Policy Will Ruin the European Union's Economy

The Fed has been engineering the continuance of a strong dollar and the EU has been forced to follow suit although both countries are facing an incipient recession. This article will explain why this policy will fail with the ultimate effect of impoverishing the working classes in both the US and the EU. In the interest of keeping the rich in the US happy, the FED has pursued policies designed to keep them rich but will ruin the working classes and ultimately ruin the rich as well. The foreign trade deficits which are the result of this policy will, within a short period, cause a catastrophic fall in the value of the dollar resulting in a worldwide financial implosion and worldwide recession. First it is necessary to explain the history of the economic policies which caused these deficits.

Five Things You Need to Know About the Mr. T Gold Indicator

1. About the Mr. T Gold Indicator

What is the Mr. T Gold Indicator?
The Mr. T Gold Indicator is a proprietary technical indicator created by Minyanville to identify and anticipate prospective exhaustion points in the price data for gold. Some technical indicators rely on formulas applied to the price data of a security, but these types of indicators can be very subjective, requiring an analyst to view the signals that are generated within the context of still more indicators! The Mr. T Gold indicator, on the other hand, is completely objective and easy to use. All you have to do is look at Mr. T. What could be easier than that?

Treasury to offer cross-border derivatives data

The U.S. Treasury said on Friday it will begin publishing data on the value of U.S. cross-border derivatives contracts in May, information that could alter size of the U.S. current account deficit.

The new data, which will be published quarterly alongside the Treasury International Capital data, will expand the information available on U.S. cross-border capital flows and international investment holdings.

Yen Gains as Carry Trades Cut After China Acts to Cool Growth

The yen rebounded from a record low against the euro as China curbed lending to cool its economy, prompting traders to sell Asian shares and investments funded by borrowing in the Japanese currency.

The yen gained against 15 of the 16 most actively traded currencies as investors unwound carry trades, where they borrow in Japan and buy higher-yielding assets elsewhere. Losses in the euro accelerated as the threat of military intervention in Turkey's election caused investors to pare holdings and repay yen loans.

Funny Money: An Inconvenient Truth

Boris Yeltsin passed away this week. I spent the summer of 1992 teaching English in Russia. In the short time I was there, post-Soviet hyperinflation caused the price of bananas to soar from 15 to 150 rubbles. Thanks Boris, you prepared me for the New York City housing market.

Boris Yeltsin, Kurt Vonnegut, David Halberstam. It's been a rough couple weeks. Is the universe giving me a hint? The people that influenced my youth are moving on, so maybe I should move on from my youth? Hmmm. Nah, let's make more jokes about funny-sounding company names.

Collateralized Debt Obligations the Fastest Growing Sector of the Fixed Income Market

Research and Markets (http://www.researchandmarkets.com/reports/c55373) has announced the addition of Developments in Collateralized Debt Obligations: New Products and Insights to their offering.

Developments In Collateralized Debt Obligations

The fastest growing sector of the fixed income market is the market for collateralized debt obligations (CDOs). Fostered by the development of credit default swaps (CDS) on all types of indexes of corporate bonds, emerging market bonds, commercial loans, and structured products, new products are being introduced into this market with incredible speed.

Energy Links Jamboree - 04/30/07

Brown’s Latest Oil Tax Blunder – Sunday Times

The Scottish National Party today [Sunday] commented on a reference in the Sunday Times about Surrey University economist, Carole Nakhle, stating that Gordon Brown’s tax increases on the North Sea industry damaged output.

Get Congress to pave way for U.S. alternative fuel sites

Our country is facing a severe energy crisis. "Peak oil" was once considered a radical theory, but current research has given it a high degree of credibility. Some believe the peak already may have passed, while others think it will occur between 2005 and 2010. Not only are we running out of oil, we are running out of time.

Choosing between life and lifestyle

People in western countries have to make some tough decisions. We simply cannot continue to live the way we have been over the last few decades. We can get smart and change our behaviour, or we can keep doing what we are doing and condemn everyone on the planet to great hardship and eventually death.

Chavez and Big Oil gear up for struggle over Venezuela's oil future

Forcing Big Oil to give up control of Venezuela's most promising oil fields this week will be relatively easy for President Hugo Chavez, but he will face a more delicate challenge in getting the world's top oil companies to stay and keep investing.

If Chavez can convince companies to stick around despite tougher terms, Venezuela will be on track to develop the planet's largest known oil deposit, possibly to surpass Saudi Arabia as the nation with the most reserves.

Israeli PM says attacks can disable Iran’s nuclear programme

Israeli Prime Minister Ehud Olmert was quoted as saying Saturday that the disputed nuclear programme of Iran could be severely hit by firing 1,000 cruise missiles in a 10-day attack.

Asked in an interview with Germany’s Focus magazine whether military action would be an option if Iran continued to defy the United Nations, Olmert said: “Nobody is ruling it out.”

Preparing for 'peak oil'

The world has a big problem: It's running out of oil. According to a recent Government Accountability Office report, the long-awaited "peak oil" crisis will certainly happen by 2040 - and may be happening right now.

Fortunately, President Bush has a strong energy plan in place that can be easily augmented to respond to concerns in both the oil industry and the global warming community.

Hurricane forecaster: Oceans, not CO2, cause global warming

Hurricane forecaster William Gray said Friday that global ocean currents, not human-produced carbon dioxide, are responsible for global warming, and the Earth may begin to cool on its own in five to 10 years.

Gray, a Colorado State University researcher best known for his annual forecasts of hurricanes along the U.S. Atlantic coast, also said increasing levels of carbon dioxide in the atmosphere won't produce more or stronger hurricanes.

The Truth About Global Warming

Global warming: Is it a man-made crisis that could spell doom and a serious moral issue? Or is it a normal, inevitable and cyclical process of nature? Scientists have not come to consensus on these questions, and their answers may have sweeping consequences for how we live in Chicago and surrounding communities.

On the Road, Hope for a Zero-Pollution Car

WHEN the largest aircraft ever built — the pride of Nazi Germany — crashed in flames at the United States Navy’s airship base here, it took 36 lives and smeared the reputation of hydrogen for decades.

In less than a minute, the Hindenburg disaster of 1937 turned hydrogen, which provided the zeppelin’s lift, into a pariah. But 70 years later, a growing number of advocates are promoting hydrogen as a panacea, a promising alternative to petroleum. In the last decade, every large carmaker has jumped on the hydrogen express.

DEFENDING CAPITALISM'S INTEGRITY

For most of its history the capitalist economic system has been both admired and criticized. Its capacity for making productivity possible in human communities is unparalleled and hardly anyone can deny this. Even the late American Marxist, Robert Heilbroner, famous for his book The Worldly Philosophers, acknowledged this after the fall of the Soviet Union. He wrote in The New Yorker Magazine that "... Ludwig von Mises ... had written of the 'impossibility' of socialism, arguing that no Central Planning Board could ever gather the enormous amount of information needed to create a workable economic system. ... It turns out, of course, that Mises was right. ..." And Mises, of course, was one of the most consistent, uncompromising defender of pure, laissez-faire capitalism.

Coming Soon - Hydrogen Refineries At Your Corner Gas Station

Hydrogen fuel cell technology is the answer most often touted as the solution to greenhouse gas emitting cars. But until local fueling stations have the technology and capability to provide the hydrogen fuel at the community level, it's still a pipe dream.

Thankfully, one company seems have developed a solution that could solve the community distribution problem.

Housing Hangover -04/29/04

As 'subprime' rates shoot up, owners despair

Twanda Thompson doesn't want to lose her home. But unless she can solve her mortgage woes, she and her four children may have to start looking for an apartment.

Like many would-be homeowners with below-average or poor credit, the Orlando woman took out a "subprime" mortgage during the housing boom to buy a place she really couldn't afford.

Sagging market begins to affect property taxes

The downturn in San Diego County home prices is beginning to show up in a surge of requests to reduce assessed valuations that determine property tax bills.

San Diego County Assessor Gregory Smith, who also serves as county clerk and recorder, said about 900 homeowners since January have requested reassessments based on falling prices in their neighborhoods.

Spending May Take a Hit as U.S. Home Prices Decline

Carol Francis says her customers are less likely to make big furniture purchases these days than they were at the height of the housing boom two years ago.

``The housing market right now is affecting everybody's spending,'' said Francis, a design consultant at Thomasville Home Furnishings in Woodbridge, Virginia, 25 miles south of Washington. Before, ``I had people who would buy two and three bedrooms of furniture. Now many come in and just buy one piece at a time.''

Subprime has further to fall

The sharp decline of the subprime housing market offering high-cost mortgages hasn't yet hit bottom, the head of home mortgage buyer Freddie Mac said Friday.

The number of home buyers starting such loans peaked last year, and interest rates for those buyers are due to rise in the next few years, which could cause foreclosures to spike further, Richard F. Syron said in an interview with The Associated Press.

Energy Links Jamboree - 04/27/07

Norwegian authorities fear steep crude decline

This is a direct quotation by Norwegian Oil Director Mr. Gunnar Berge from the Foreword to Facts - The Norwegian Petroleum Sector - 2007 (220-page PDF) published by the Norwegian Ministry of Petroleum and Energy on Friday, April w0:

Forecasts show that gas production is rising while oil production is declining. The number of exploration wells increased significantly in 2006 compared with the previous year, but only six new discoveries were made. These were made in four wellbores. This is figures for reflection [stet]. If we are to achieve the development that we want, with only a slow and gradual decline, serious efforts must be made in several areas.

Lower oil prices fail to hold back Exxon as quarter’s profits top $9bn

ExxonMobil shrugged off the impact of lower oil prices and boosted its profits in the first quarter of the year with a strong performance from its refining and chemical businesses.

The American oil group showed a clean pair of heels to BP, its British rival, by declaring profits of $9.28 billion (£4.66 billion) for the first three months of 2007, up by 10 per cent on the previous year.

Al Bartlett’s resources depletion protocol for a sustainable Australia

Professor Al Bartlett of Colorado University is well-known in sustainability circles for his contributions to the population debate and especially for his famous lecture, “Arithmetic, Population and Energy” which he has personally delivered over 1600 times (on average, about once a week for the last 30 years!). His message remains absolutely relevant today.

Address energy issue before oil is gone

With the most driving-heavy season approaching, increasing gas prices are at the forefront of most people's minds. Unfortunately, with our dependence on oil, there's nothing we will be able to do about it in the immediate future.

Why aren't we doing everything in our power to increase production of biodiesel and hydrogen fuel cell technologies? There are few things scarier than national leaders who lack the foresight to prepare for the inevitable.

Dueling rich men: Pickens, Forbes on oil

It was a typical oddball Milken conference matchup: longtime Texas oilman T. Boone Pickens sparring with magazine editor and former presidential candidate Steve Forbes in a lively debate on oil prices and energy policy.

The result in the packed Beverly Hills ballroom Tuesday? Horror — and amusement.

Pickens drew a mix of groans and quiet gasps with his prediction that U.S. oil prices would top last year's record high of $78.40 a barrel by year's end, and that consumers would feel the pain through sharply higher pump prices.

Non-Opec output ‘to peak by 2015’

Oil production outside Opec will keep rising until about 2015, while global output will continue to expand through 2025 at least, a top analyst at consultancy Wood Mackenzie said yesterday.

Countering doomsday “peak oil” theorists who believe global oil production may be reaching its limits, Wood Mackenzie said research based on its database of field-by-field global data showed supplies should keep expanding for at least 20 years.

Saudi Arabia likely to grow by 4% this year

Saudi Arabia's economy, the largest in the Arab world, may grow as much as four per cent this year, more than previously expected, on a possible rise in oil output, Samba Financial Group said yesterday.

Samba Chief Economist Brad Bourland said that he may revise his expectation for average Saudi Arabian oil production this year to 8.7 million barrels per day (bpd) from 8.6 million bpd. Saudi Arabia holds the world's largest crude oil reserves.

Mexico's state oil company requests massive investment

Mexico's state-run energy giant has requested some 33 billion U.S. dollars in investment to maintain its production after the sharp decline in a main oil field, according to a study published Tuesday.

Petroleos Mexicanos (Pemex) is targeting a 3.1-million-barrels per day (bpd) production until 2009, something analysts describe as difficult without substantially larger investment than that currently planned.

Peak Oil Crisis: By Order of the Governor

Earlier this month, the Governor of Virginia issued what is sure to be one of many orders, laws and regulations mandating greater efficiency in the use of energy. Although justified in terms of saving taxpayer money, wise use of natural resources and reducing greenhouse gases, the order serves equally well as a preemptory strike against the consequences of peak oil.

Will Ethanol Provide Our Daily Bread Or Are We Toast?

There are many unanswered questions regarding the future of the energy industry and any answers you are likely to receive depend largely on who you ask. Ask a vegetarian or environmental campaigner how much oil is used to raise a beef steer and they will probably quote a figure in excess of 280 gallons while some beef farmers claim the real figure is around 14 gallons.

The Caspian: A zone of special interest

When back in the ‘90s the international community discovered the Caspian region’s enormous hidden wealth, US energy experts were quick to announce the region as the world’s third largest in energy resources.

In no time, the world energy map experienced a shakeup: A largely unknown energy reserve was drawn straight at the borders of Eurasia. It’s called the Caspian region.

Energy security for U.S. = insecurity for Canada

What would Canada do in a supply crunch during an Arctic cold front? We do not have enough pipeline capacity to bring Western oil to meet Eastern Canadian needs.

Pemex Says March Crude Output Falls 5% From Year Ago

Petroleos Mexicanos, the state-owned oil monopoly, said crude production fell 5 percent in March from a year earlier, the eighth straight monthly decline as the company depletes its largest oilfield, Cantarell.

Daily output was 3.18 million barrels last month, down from 3.35 million in March 2006 and higher than February's 3.15 million barrels, the Mexico City-based company said today in a report on its Web site.

OPEC Eyeing Oil Invest Review On Talk Of Oil Alternatives

The Organization of Petroleum Exporting Countries is eyeing a formal review that could eventually lead to less investment in exploring for future oil supplies because of endless discussion in consuming nations to reduce fossil fuel demand and fight global warming.

OPEC said in its monthly magazine published Thursday that trends in the U.S. and Europe toward the use of more renewable fuels like ethanol in road transport that are less polluting than oil had prompted discussions within the group.

WHAT GOES UP MUST COME DOWN. IT'S A CRUDE AWAKENING

Forget serial slashers, irradiated mutants, locked-room torturers, and psychopaths wielding any sharp, serrated disemboweler. The real pants-crapping, goose-pimpling, breath-stealing horror is the immediate future, coming straight down the road at us in bright daylight.

The Coming of Deindustrial Society: A Practical Response

With the coming of Peak Oil and the beginning of long-term, irreversible declines in the availability of fossil fuels (along with many other resources), modern industrial civilization faces a wrenching series of unwelcome transitions. This comes as a surprise only for those who haven't been paying attention. More than thirty years ago, the Club of Rome's epochal study The Limits to Growth pointed out that unless something was done, a global economy based on fantasies of perpetual growth would collide disastrously with the hard limits of a finite planet sometime in the early twenty-first century.

Debt, Deficit, Derivatives & Delusions - 04/26/07

First Comes Denial – And Then Acceptance

It’s no secret markets are dramatically affected by investor psychology. And it’s also no secret the right investor psychology can cause prices to soar with a healthy liquidity backdrop, as was the case with both the tech bubble in 2000, and in real estate more recently. In fact, given participation rates in both of these bubbles was so high, it would not be a stretch to categorize them as manias in the truest sense of the word. Be that as it may, little doubt exits they are the two most prominent ‘popped bubbles’ the world has witnessed within more recent history. At the same time however, it should also be understood more important bubbles have yet to pop, like the larger credit bubble, even though subprime problems in the States suggest we are seeing the initial stages of implosion here too.

Stephen King: Globalisation is forcing the Bank of England to adopt a new approach to interest rates

"Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens." So claimed John Maynard Keynes inThe Economic Consequences of the Peace, published in 1919.

Of course, Lenin had a vested interest in bringing the capitalist system down, so a bit of debauchery was, in his eyes, a jolly good thing (although whether Lenin really ever said these famous words is still a matter of historical conjecture). Eventually, of course, Lenin and Keynes were proved absolutely right. Demands from the Allies for reparations after the Treaty of Versailles led in Germany to hyperinflation, the destruction of the Weimar Republic and the rise of the Nazis.

RBI issues guidelines for rupee interest rate derivatives

The Reserve Bank has issued detailed norms for banks and primary dealers, asking them to trade in rupee interest rates derivatives only with those who understand the risks associated with these products.

Derivatives are instruments, to be settled at a future date, whose value is derived from change in interest rate, foreign exchange rate, credit rating, price of securities, or a combination of these.

Mutual fund derivatives plays heighten risk
Derivatives are popping up everywhere — even in plain-vanilla bond funds — and it is making financial advisers and regulators nervous.

“I think most investors don’t have a clue about the risk,” said Lou Stanasolovich, president and chief executive of Legend Financial Advisors Inc. in Pittsburgh. “A lot of mutual fund managers that use these things don’t even understand what they’re doing.”

Dollar's fall a delight for some

To the delight of U.S. exporters and the dismay of U.S. tourists, the dollar touched a 26-year low this week against the British pound and was less than a penny from an all-time low against the euro.

And because of growing concern over the U.S. economy, many industry analysts say they expect the dollar to continue trending downward, deepening the economic impact for Americans.

China Becomes Japan's No.1 Trade Partner

China became Japan's largest trading partner in fiscal 2006, which ended on March 31, replacing the United States for the first time since the end of the Second World War, according to preliminary figures released on Wednesday by Japan's Finance Ministry.

Japan's trade with China, excluding Hong Kong, rose 16.5 percent in fiscal 2006 from a year earlier, totaling 25.42 trillion yen (about $213.6 billion), while that with the U.S. increased 10.3 percent to 25.16 trillion yen ($211.4 billion). The trade data are measured on a customs-cleared basis before adjustment for seasonal factors and given on a yen-denominated basis.

Can Housing Send US into a Recession and Sink the Dollar?

Yesterday’s very ugly existing homes sales numbers have once again fueled speculation that weakness in the housing sector will spill over into the overall US economy, tipping it into a recession. While the news from the housing front is certainly bleak, calls for an economic contraction may be premature. For the time being housing appears to act as a slow bleed on the US economy rather than as a massive coronary that threatens to shut down the whole system. There are however several potential risks lurking in the background that could escalate the present situation into a serious financial crisis.

Housing Hangover - 04/26/07

Housing market doldrums

Joe Desagun hopes to sell his mother's three-bedroom home in North Charleston by fall.

So he put it on the market in February, knowing it could take that long to find a buyer in a slowing market.

Closings rise, but more homes sit unsold

Triangle home sales rose modestly in March as the national housing slump continued to pinch the area's largest business.
Brokers in the area closed on 2.5 percent more homes in March than in 2006, but all the news was not good.

The inventory of unsold homes rose 13 percent, and the number of sellers dropping prices increased 16 percent compared with a year ago.

Pulte, Beazer, Ryland Have Losses on Land Writedowns

Pulte Homes Inc., Beazer Homes USA Inc. and Ryland Group Inc. reported quarterly losses as the deteriorating housing market forced them to write down the value of property and abandon land purchases.

Beazer and Ryland withdrew their earnings forecasts for 2007 and Pulte declined to provide an outlook for the rest of the year. Beazer Chief Executive Officer Ian McCarthy said the market was ``extremely challenging'' and he doesn't see any signs of a housing recovery.

U.S. foreclosure filings up 35 pct year over year

Underscoring the financial stress facing subprime mortgage borrowers behind on payments, foreclosure filings across the United States in the first quarter rose 27 percent from the prior quarter and 35 percent from a year earlier, online foreclosure marketplace RealtyTrac said on Wednesday.

California becomes U.S. largest state in foreclosure fillings

California became the biggest state in the United States in terms of foreclosure fillings, taking up about 18 percent of the national total, according to figures released on Wednesday.

The state reported 80,595 first-quarter foreclosure filings, numerically more than any other state, said RealtyTrac which provided the figures.

Housing Hangover - 04/25/07

C.A.R. reports sales decrease 20.8 percent in March, median price of a home in California at $580,090, up 3.2 percent from year ago

Home sales decreased 20.8 percent in March in California compared with the same period a year ago, while the median price of an existing home increased 3.2 percent, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) reported today.

“March sales fell below the levels of recent months in reaction to an uptick in mortgage rates earlier this year along with tighter underwriting standards. The year-to-year decline in March was larger than in recent months in part because sales in March 2006 were the strongest in all of last year,” said C.A.R. President Colleen Badagliacco. “Moreover, recent news regarding foreclosures and the subprime situation had an adverse impact on the market psychology of many buyers, leading some to delay their home-purchase decisions.”

Home Sales Continue Plunge

Sales of single-family homes in the Tampa Bay area continued to plummet in March, and the median sale price of homes fell by $9,000 from the same time a year ago, according to new housing data.

However, amid the bleak numbers, some economists see a bit of sunshine: It appears many sellers are finally cutting their prices and getting closer to buyers' demands.

Subprime Bondholders May Lose $75 Billion From Slump

Bond investors who financed the U.S. housing boom are starting to pay the price for slumping home values and record delinquencies in subprime loans.

They will lose as much as $75 billion on securities made up of millions of mortgages to people with poor credit, says Pacific Investment Management Co., manager of the world's biggest bond fund. Some of the $450 billion in subprime mortgage-backed debt sold last year has lost 37 percent, according to Merrill Lynch & Co.

Foreclosures surge on mortgage woes

Foreclosure filings surged during the first quarter of 2007, as home-price increases slowed or even reversed and borrowers fell behind on payments as their adjustable rates began resetting at much higher levels.

The number of filings climbed 27 percent in the first quarter compared with the fourth quarter of 2006 and 35 percent from a year earlier, according to a report released Wednesday by RealtyTrac, an online marketer of foreclosure properties.

S&P/Case-Shiller Home Price Index Fell 1% in Year

Declines in home prices in 20 U.S. metropolitan areas accelerated in the 12 months ended in February, a private survey showed today.

Values fell 1 percent from February 2006 after dropping 0.1 percent in the year ended January, according to the S&P/Case- Shiller home-price index. January's decrease was the first since the group started keeping year-over-year records in 2001.

Subprime bailouts: How they work

"They got themselves into this mess and I don't want my tax dollars used to get them out of it." That's the attitude of many when it comes to bailing out subprime borrowers from bad loans.

Still, many programs to help those facing foreclosure are being launched, with the aim of moving borrowers out of high-interest, variable-rate loans and into lower-rate, fixed ones.

New-Home Sales in U.S. Increase 2.6% to 858,000 Pace

Purchases of new homes in the U.S. rose for the first time in three months in March as unusually warm weather and incentives brought out more buyers.

Sales rose 2.6 percent to an annual pace of 858,000 last month from an 836,000 rate in February that was lower than previously reported, the Commerce Department said today in Washington. The supply of unsold homes at the current sales pace declined.

Housing Bubble Boondoggle

Treasury Secretary Henry Paulson delivered an upbeat assessment of the slumping real estate market on Friday saying, "All the signs I look at" show "the housing market is at or near the bottom."

Baloney.

Paulson added that the meltdown in subprime mortages was not a "serious problem. I think it's going to be largely contained."

Energy Links Jamboree - 04/24/07

Crazy Like a Fox: Sell Natural Gas Calls Into U.S. Hurricane Season?

It is only April and already the Hurricane gang is talking up another “big year” for the southeastern United States. Meanwhile, a second group has emerged to challenge the notion of an active season, sighting the same wind shear factors present this year that rendered the 2006 season a pleasant dud.

And what about global warming? Does it create more or less hurricane activity? The experts are split.

Biodiesel won't drive down global warming

EU legislation to promote the uptake of biodiesel will not make any difference to global warming, and could potentially result in greater emissions of greenhouse gases than from conventional petroleum derived diesel. This is the conclusion of a new study reported today in Chemistry & Industry, the magazine of the SCI.

Pemex Says March Crude Output Falls 5% From Year Ago

Petroleos Mexicanos, the state-owned oil monopoly, said crude production fell 5 percent in March from a year earlier, the eighth straight monthly decline as the company depletes its largest oilfield, Cantarell.

Daily output was 3.18 million barrels last month, down from 3.35 million in March 2006 and higher than February's 3.15 million barrels, the Mexico City-based company said today in a report on its Web site.

The looming oil crisis in Iran

Excerpts from the executive summary of the NSCS report on Iran’s oil economy:
According to analysts, the Iranian economy is grossly mismanaged and highly vulnerable to external pressures. UNSC resolution 1747 has widened the scope of the sanctions imposed vide UNSC 1737. Further widening of the sanction in future can have serious impact on the Iranian economy.

American Petroleum Institute Talks Energy with Bloggers

Like other companies and industries wanting to "tell their side of the story" about energy and global warming solutions, the American Petroleum Institute (API) held its second conference call for bloggers on April 18th. API is the national trade association of the U.S. oil and natural gas industry. It represents more than 400 companies that work in areas such as exploration, refining, production, marketing, and transportation.

Ethanol's new victims: beer drinkers

We witnessed the tens of thousands of demonstrators decrying the rapidly (and exorbitantly) rising price of corn in the "tortilla protests" in Mexico City earlier this year. The protests came about as a result of the growing demand for corn-based ethanol, the Bush administration's biofuel of choice. But now there appears to be a new dietary staple under threat from the rising demand for ethanol: German beer.

China's Uranium Equivalent to the Strategic Petroleum Reserve

Like every other country that is in the midst of building nuclear reactors, China is scrounging to secure future uranium supplies. Its Commission of Science, Technology and Industry for National Defense just came out with a report that emphasized the need to mine its own uranium oxide.

Iraq: oil output likely to reach 4b bpd by 2012

The Chairman of E.H.S consultative company said that Iraq's oil can be extracted at less that $2 a barrel and if security improves in the country, oil production in Iraq is likely to increase to 4 billion barrels per day (bpd) by 2012, Iraq Directory reported.

Energy Briefs - Peak Oil Review

• OPEC softened its policy to withhold oil from the market last week, saying it would supply more if necessary. President al-Hamli reiterated: "Oil supply is adequate. The market is well-supplied." But he added: "We are ready to supply more if the market needs more."
• Kuwait may abandon plans to build a new oil refinery if a second round of bidding fails to cut high costs. The state has earmarked $6.3bn for the refinery, but international companies have estimated the cost in their bids at $15bn.
• Saudi Aramco said a shortage of refining capacity to process so-called heavy-sour crudes will persist because of rising construction costs.
• Soaring prices for farm goods, driven in part by demand for crop-based fuels, are pushing up the price of food worldwide and unleashing a new source of inflationary
pressure. The rise in food prices is already causing distress among consumers in some parts of the world - especially relatively poor nations such as India and China.
• According to Energy Intelligence, the world is currently producing more oil annually than it is replacing with new reserves. In contrast to the gradual rise in global oil reserves that has been reported annually in most surveys based on public sources, EI’s new assessment shows that the trend in worldwide liquids reserves is actually one of stagnation and modest decline.
• President Hugo Chavez challenged foreign oil companies to sue his government if they want but said his plans to nationalize their operations in Venezuela's Orinoco River region would not be derailed. "Whoever wants to sue can sue," Chavez told a news conference, but Venezuela has "every right" to take over the four oil projects run by BP PLC, ExxonMobil Corp., Chevron Corp., ConocoPhillips, France's Total SA and Norway's Statoil ASA, he said.
• Venezuela is threatening not to compensate some foreign oil companies in its planned takeover of their multibillion dollar projects in the Orinoco reserve. The warning from the oil minister intensified the pressure government has exerted on some of the world's largest companies as they negotiate before a June deadline over the nationalizations.
• U.K.-based coal producer and power generator Powerfuel said it has signed an agreement with Royal Dutch Shell to use Shell's patented technology to build a near-zero carbon emissions coal-fired power station.
• The Dubai Mercantile Exchange, a joint venture between the New York Mercantile Exchange and the Dubai government, said Thursday it was delaying its launch date by one month to June 1, subject to regulatory approvals of its clearing arrangements.
• Iraq's oil reserves could be almost twice the size of current estimates, and its production could also double in five years according to a report from consultancy IHS. The report, which it said was the most comprehensive independent survey of Iraq's resources since the US-led invasion of the country in March 2003, noted that such developments were dependent on an improving security situation.
• Australia has warned that it will have to switch off the water supply to the continent's food bowl unless heavy rains break an epic drought. The Murray-Darling basin in south-eastern Australia yields 40 per cent of the country's agricultural produce. The two rivers that feed the region are so pitifully low that there will soon be only enough water for drinking supplies.
• The chairman of the U.S. House Subcommittee on Energy and Air Quality said that a final resolution of a climate-change bill that would regulate greenhouse gas emissions wasn't expected until 2008.
• The U.S. Department of Energy announced that it has issued the second of several solicitations planned to purchase up to four million barrels of crude oil for the United States’ crude oil reserve. The first solicitation, issued March 16, 2007, resulted in no awards because the Office of Fossil Energy determined that the bids were too high and not a reasonable value for taxpayers.
• The CEO of Mexican state oil monopoly, Pemex, said the company will need annual budgets of $33 billion - including $22 billion for investment - if it wants, among other
things, to keep crude oil production at 3.1 million barrels a day. Mexican Energy Minister Kessel said the country would not privatize its energy sector
• Political and sectarian fighting in Iraq's oil capital, Basra, is threatening most of Iraq's oil production and all its oil exports. The local government is controlled by the Fadhila Party. Its biggest competitor is the alliance led by Moqtada Sadr. The two sides launched bitter and violent battles against each other over the past weeks.
• Iran signed a major agreement with Austrian energy group OMV to help develop the country’s vast gas resources and build a plant for liquefied natural gas (LNG). Iranian television described it as the country’s biggest ever gas contract with a European firm, and some Iranian media put its value at up to $30 billion over the next 25 years.
• If the forecasts of above normal sea surface temperatures, no El Niño, and below average African dust come true, the 2007 Atlantic hurricane season should be very active. By late May the atmosphere and ocean begin to give significant clues about the upcoming hurricane season which will allow more accurate predictions.

Debt, Deficits, Derivatives & Delusions - 04/23/07

Gold hits 11-month high, platinum jumps on dollar, ETF

Gold hit a new 11-month high on Friday and platinum rose to its highest in five months, buoyed by a weaker dollar and on hopes proposed exchange traded funds would boost demand for precious metals.

A rebound in Chinese stock markets also helped the bullion market, as it eased concerns that a possible hike in interest rates could hit demand in China.

At the risky end of finance

The use of credit derivatives has boomed and bemused. These new financial instruments have yet to face their biggest test

US Dollar Weakness: Who Wins, Who Loses

With the Euro hovering near its record highs and the British pound having breached the psychologically important 2.000 level, the extent of the US dollar’s weakness has finally been recognized. As we have seen in the past few months, the value of the US dollar is important not only for currency traders, but also for equity traders. It is hardly a coincidence that the US stock market hit an all time high around the same time that the US dollar reached multi decade lows against currencies like the British pound, New Zealand dollar and the Euro. The strength of those currencies has made US stocks attractive values for foreign investors and looking ahead, the value of the US dollar can be a useful tool for equity traders, especially those who are looking to buy or sell the shares of big US importers and exporters.


Financial Earnings

Earnings season provides us a quarterly glimpse into the workings of the Credit system. I was especially interested in the opportunity to examine how various institutions were responding to the subprime meltdown. Were lenders pulling back from home mortgage lending? Were they becoming more risk averse in the lending business generally? Any reverberations in securitizations or derivatives? Most important, are we seeing evidence of slowing financial sector growth – the lifeblood of market liquidity?

Global View: Money makes the world spin

Money is good, isn't it? The more, the better. Money makes the world go round. But sometimes it makes it spin giddily.

Why is the U.S. economy in difficulty? Why did the Argentine one collapse two years ago? It all has to do with tides of money.

Borrowing 'threatens UK economy'

Consumers must rein in their borrowing levels if a downturn in the UK economy is to be avoided, a report has warned.

The Ernst & Young Item Club's latest report says that the strong UK economy rests upon shaky foundations, with excessive levels of household debt posing a serious threat.

Paulson: Strong dollar in U.S. interest

U.S. Treasury Secretary Henry Paulson said on Friday he is "a big believer in a strong dollar" but reiterated that China's yuan currency needs to appreciate more against the greenback.

In a transcript of an interview with Public Broadcasting Service business commentator Charlie Rose airing on Friday night, Paulson said a strong dollar was good for the United States.

Energy Links Jamboree - 04/22/07

New Findings Peg Iraq's Oil Reserves At 200 billion Barrels

Iraq may have untapped oil reserves of over 100 billion barrels on top of a known reserve base of 116 billion barrels, making Iraq the world's potential top oil producer, says an IHS Inc. report. According to IHS's rankings, Iraq ranks third in known oil reserves, behind Saudi Arabia and Iran.

The consulting firm in a comprehensive report released Wednesday said the untapped oil reserves mainly lie in the western part of the country.

China's Q1 Crude Oil Output up 1.5%, Natural Gas up 14.7%

China's crude oil output in the first three months of this year rose a slight 1.5% to 46 million tonnes, while natural gas production soared 14.7% to 16.7 billion cubic meters, according to a transcript of a news conference held by the National Bureau of Statistics published earlier today.

Flat crude production growth suggests that the world's second largest oil consumer may resort to more oil imports to fuel its runaway economy, which posted an 11.1% gross domestic product growth in the first quarter. China already relies on foreign oil for almost half of its crude consumption.

Peak Oil Passnotes: Can Oil Go to $80 Again? Why Not?

Gasoline has continued its rise on the back of more dodgy refineries, increased demand and it has kept the price of crude healthy and above the $60 per barrel range. The thing is there does not seem to be any reason in the near future for crude to fall too far.

Instead a number of bullish factors - gasoline price, company troubles, geo-politics, the weather - are readying themselves, like an unpleasant obstacle course for barrels of light sweet.

Ethanol boom may boost US natural gas prices

The US ethanol boom could push lofty natural gas prices even higher as the explosion of new distilleries and a soaring corn crop raise industrial and agricultural demand.

Ethanol refineries tend to use natural gas-fuelled boilers, and natural gas is also used in the production of fertilizer for corn, which is the main feedstock for ethanol in North America. (Sugar cane is the main feedstock in South America.)

China to increase strategic oil reserve gradually - state planner

China will continue to gradually boost its strategic oil reserve as any sudden rise would hit global prices, said Chen Deming, vice chairman of state planning agency the National Development and Reform Commission.

Speaking at the Boao Forum for Asia in south China's Hainan province, Chen said the government hopes by 2010 to have a reserve large enough to provide about 30 days' supply of oil for the country.

Well, are the oil wells running dry? It's a question of when, not if

Back in 1956, an American geophysicist called Marion King Hubbert came up with a startling prediction: that production of oil from the continental US would peak within the next 10 to 15 years. Few paid any attention. This, after all, was the era when the car was king and king-sized; when James Dean was racing in the streets in Rebel Without a Cause and former US president Eisenhower was investing billions of US dollars in the interstate network.

Fox Newz Covers ‘Peak Oil’

Personally I don’t believe anything until those fair and balanced folks over at Fox Newz say it. Call me biased. It’s just a certain standard of truth I set for myself. So it was helpful when, earlier this week, Fox actually covered ‘Peak Oil.’ Now they put it in ‘quotes’ and trotted out big oil’s main mouth piece Michael Lynch to put wings on a pig in hopes that they not scare the bejesus out of their readership. But all the same, last week Fox Newz covered peak oil.

Is There Really an Energy Crisis?

A little news item in an April 15 edition of my daily newspaper was headlined “Saudi Arabia proposes to boost oil production.” The increase was intended to “meet domestic and international demand while insuring ‘fair’ world prices”, said King Abdullah. Indeed, OPEC, the oil cartel, had twice cut production, “contributing,” said the news item, “to relative stability that has kept benchmark crude between $50 and $60 a barrel—down from the record highs of more than $78 a barrel last summer. Current prices are around 40% above 2004 levels.”

Construction starts on world's largest solar array

A groundbreaking took place Monday at Nellis Air Force Base, just north of Las Vegas, Nevada, in the desolate, arid, windswept Mojave Desert. The ceremony will initiate construction on what will be the largest solar photovoltaic (PV) array in the United States, capable of producing 15-18 megawatts of power.

At least for a year or so, say Air Force officials, the plant will also constitute the largest such facility in the world, encompassing an investment of $100 million on 140 acres. The land will largely be covered by silicon wafers that will rotate each day to doggedly follow the sun across the sky.

Alternative reality game takes on the end of oil

In a matter of days, gas prices will skyrocket, a dwindling food supply will rot, and the oil crisis literally will stop Americans in their tracks.
How can you and your loved ones survive a crippling breakdown?

Log in to "World Without Oil," a free alternate reality game that taps our collective ingenuity to stop a plausible crisis before it happens -- or at least prepare a post-Katrina nation to deal better with a disaster.

Housing Hangover 04/22/07

Merrill Made Record Subprime Home Loans Amid Shakeout

Merrill Lynch & Co. said its newly acquired First Franklin unit made record numbers of subprime home loans in January and February and added staff, even as a surge in defaults forced rival mortgage lenders into bankruptcy.

``We were able to build on our platform, actually hire highly talented people from competition, as some of our competitors fell away,'' Merrill Chief Financial Officer Jeffrey Edwards said in an interview. ``Our underwriting was up despite efforts to improve underwriting standards of ongoing products and eliminate products we felt were poorly performing.''

GMAC, GE Will Cut 1,400 Job Cuts on Subprime Decline

GMAC LLC's Residential Capital home- lending unit and General Electric Co.'s WMC Mortgage division announced more than 1,400 job reductions as losses mount in the U.S. subprime loan industry.

WMC Mortgage, part of the GE Money consumer-finance unit, today slashed 771 jobs and closed three centers. WMC, based in Burbank, California, has cut more than half its workforce this year. Between 600 and 700 workers at GMAC's Minneapolis-based Residential Capital, known as ResCap, will lose their jobs by midyear, and at least 300 vacant positions won't be filled.

Subprime assault on southern California

Far away from the sun-kissed beaches and palm trees that make up southern California's idyllic coastline, trouble is brewing in the Inland Empire.

Two years ago the sprawling arid region that lies to the east of Los Angeles was one of California's property hot spots.

Why we shouldn't be bailing out subprime lenders or borrowers

Dumb: Buying a house you can't afford with no down payment and a loan whose monthly payments will explode in a few years.

Dumber: Lending money to people who can't afford a traditional mortgage, especially when they have lousy credit ratings and don't substantiate their income.

Dumbest: Bailing out dumb and dumber, especially with taxpayer money.

Subprime mess hits homeowners in R.I.

Philip Campbell, director of Rhode Island Housing, says he stresses one thing with home loans: education.

“They better understand the purchase process,” he said in an interview. “They [will] be less likely to make a decision that would hurt them down the road. Buy with your head, not heart.”

KPMG claims fraud at Fannie Mae

KPMG LLP sued former auditing client Fannie Mae, the biggest source of money for US home loans, for "fraudulent deception" that prevented KPMG from uncovering $6.3 billion in overstated earnings.

Fannie Mae from 1998 until 2004 withheld and distorted its accounting, engaging in "breach of contract, fraudulent misrepresentation, fraudulent inducement" and other wrongdoing, New York-based KPMG said in an April 16 filing with the US District Court in Washington. A Fannie Mae spokesman declined to comment.

LV housing slump worsens

The price of new homes has tumbled nearly 10 percent this year, the inventory of existing homes has reached an all-time high and bank repossessions accounted for a greater percentage of existing home sales in Las Vegas, according to the March housing statistics.

The ongoing weakness in the housing industry was reflected in numbers released Tuesday by Larry Murphy of SalesTraq. The housing research firm reported the median price of new homes sold in March was $308,471, down nearly 10 percent from $341,990 in December.

Energy Links Jamboree - 04/21/07

Study says ethanol could be as bad for health as gasoline

If ethanol ever gains widespread use as a clean alternative fuel to gasoline, people with respiratory illnesses may be in trouble.

A new study out of Stanford says pollution from ethanol could end up creating a worse health hazard than gasoline, especially for people with asthma and other respiratory diseases.

Iran's First Official Nuclear Threat

Last week, Iran announced that it has graduated into the industrial production phase in their nuclear program, claiming to have enriched uranium in a 3,000-centrifuge cascade. "I proudly announce that as of today Iran is among the countries which produce nuclear fuel on an industrial scale," boasted Iranian president Mahmoud Ahmadinejad. But while the Iranian claims are questionable, it is what Ahmadinejad said soon after that should garner the lion's share of attention from the observant. What followed is nothing short of Iran's first official nuclear threat.

Oil Futures Bidding To Heat Up As Energy Crisis Looms

Oil ended 2006 roughly where it began, at just over $60 a barrel. This reassured the public that all talk about Peak Oil was hysterical blather from a lunatic fringe. It was reinforced by the publication of the mendacious Cambridge Energy Research Associates (CERA) report issued this fall - a tragic document put out by a giant public relations firm representing the oil industry - with the mission of staving off windfall profits taxes and other regulatory moves that a true resource emergency might recommend.

Could global warming cause war?

Washington: For years, the debate over global warming has focused on the three big "E's": environment, energy and economic impact. This week it officially entered the realm of national security threats and avoiding wars as well.

A platoon of retired US generals and admirals warned that global warming "presents significant national security challenges to the United States". The United Nations Security Council held its first ever debate on the impact of climate change on conflicts. And in Congress, a bipartisan bill would require a National Intelligence Estimate by all federal intelligence agencies to assess the security threats posed by global climate change.

Is it ethical to use pig fat to power motor-cars?

I let out a little cheer this week when I read that an American oil company and a meat manufacturer have found a way to turn animal fat into diesel for cars. At last, I thought, we can wean ourselves off our addiction to dirty, war-causing, smog-producing oil! But, Ethan, is it ethical to use animal fat to power motor-cars? Please tell me if I cheered out of turn….

Russia to Transfer No Nuclear Technology

Russia won’t ever transfer uranium enrichment technology, First Vice Premier Sergey Ivanov said today when visiting Kovrovsky Mechanical Works, which is the maker of uranium enrichment centrifuges.

Unlike some market competitors, Russia strictly observes non-proliferation requirements of IAEA, Ivanov said, naming Urenco as an example. Russia will never export uranium enrichment centrifuges to Iran or to other states, which have no nuclear technology, first vice premier specified.

Deficits, Derivatives, Dollars & Delusion- 04/20/07

Trichet: Derivatives haven't been stress-tested

European Central Bank President Jean-Claude Trichet on Monday took note of the "explosion" of the global derivatives market, but he said these instruments have not been stress-tested yet.

In a question and answer forum after a speech at the Council of Foreign Relations, Trichet said, "We shouldn't be ... negative" on derivatives.

How Much Is Goldman Sachs Really Worth?

Over the past week or so, I've seen multiple articles questioning how Goldman Sachs (NYSE: GS) is being valued. Specifically, questions have been raised over why Goldman, which has been accused in the past of being a big hedge fund itself, is valued at less than 10 times trailing earnings when public-markets newcomer Fortress Investment Group (NYSE: FIG) is trading at a 40-plus multiple. As the Financial Times pointed out, Goldman manages $147 billion of alternative assets versus $30 billion for Fortress and $79 billion for Blackstone -- which will likely get an impressive valuation if its IPO makes it to market.

S. Korea's household debt may reach dangerous level: think tank

South Korea's household debt may reach a level similar to that seen at the end of 2002, when the consumer credit bubble burst and the country went into a two-year economic slump, the nation's leading private think tank said Wednesday.

The pace of South Korea's economic growth has been increasing since the two-year slump, but a surge in household debt last year stoked fears over defaults and a decline in the nation's consumer spending.

Credit Derivatives Risks: Can Smart Money Avoid the 'Dangerous Herding'?

Wall Street Polyannas, smoke-blowing pundits, and ivory-tower academics downplay or dismiss the risks associated with the rapidly-growing credit derivatives market, arguing that sophisticated market participants have a vested interest in working together to avert disaster. Yet according to a recent Bloomberg report, "Trichet Warns of `Dangerous Herding' Derivatives Risk," if and when someone eventually shouts "fire" in the crowded financial theater, cooler heads might not necessarily prevail among the "smart money" crowd.

Dollar Heads for Weekly Drop as U.S. Rate Premium to Diminish

The dollar headed for a fourth weekly decline against the euro on speculation the interest-rate advantage on U.S. assets will diminish as European borrowing costs rise.

The U.S. currency traded within a cent of an all-time low of $1.3666 versus the single currency as investors bet the Federal Reserve will lower its benchmark this year while the European Central Bank will raises rates as soon as June. The yield premium on two-year U.S. bonds over similar-maturity German bunds was the least in more than two years.

Energy Links Jamboree - 04/18/07

Governments in the U.S. Prepare for Peak Oil

A recent U.S. Government Accountability Office report says that since most studies suggest decline of oil within around three decades, the U.S. government must prepare the country for that eventuality.

The Peak Oil Crisis: Have the Troubles Begun?

In recent years, numerous books have been written about life after world oil production peaks. Most depict radical change, as oil-powered transportation, suburban living, and large-scale food production and distribution wither. The truth is nobody really has a good idea about what is going to happen. The world has never been to peak oil before. There are many complicating factors -- rates of oil depletion and production, the state of the world’s economy, and the gap between rich and poor nations to name a few. Making a meaningful projection of what life will be like five, ten, or 20 years from now is, as usual, fraught with uncertainties.

How Uranium Depletion Affects the Economics of Nuclear Power

This is a guest post by Miquel Torres. Miquel has a degree in Physics from the University of Valencia, he currently lives in Germany and works in secondary education and in the field of energy investment.

The main criticism made to my previous post about a paper by the Energy Watch Group, was that it is irrelevant whether current reserves are depleted because of three reasons: new discoveries will be made, increasing reserves, lower grade ores can be used, giving us many thousands of years of reserves at current or increased consumption rates and, at a high enough uranium price, reprocessing and MOX recycle would become economical, greatly increasing reserve life, and even a closed nuclear fuel cycle could be created with breeders, rendering the resource issue entirely moot. Those are fare points, and I will try to address them in this post.

Funny Farms

When Tom Chudleigh and his wife, Carol, opened their orchards to the public in 1967, there was only one other pick-your-own farm in Ontario. A dozen visitors was a busy Sunday. Now, 100,000 people a year pay $6 for the pleasure of plucking apples, frolicking in bales of hay, and taking tractor-wagon rides at the farm near Milton, Ontario. Across the province, farmers’ markets, including do-it-yourself harvesting, bring in $116 million annually. But it is difficult to say if this is a success story or the last gasp of a dying way of life.

Ethanol vehicles pose significant health risk – study

A new Stanford University study finds that a switch to ethanol vehicles would likely increase the number of respiratory deaths in the United States. Stanford University scientist Mark Jacobson published his findings in the Environmental Science and Technology Journal and says that ethanol poses an “equal or greater” risk to public health over gasoline.

Jacobson simulated widespread ethanol usage with a mainframe computer, but focused his attention to the Los Angeles area because of its high pollution and population density. His computer model combined the effects of tailpipe emission chemicals with temperatures, sunlight, clouds and precipitation. He also calculated wind effects and the ethanol’s reaction with other airborne chemicals.

Natural Gas ETF Launches; A Natural Gas Primer

The Natural Gas ETF (UNG), formally the United States Natural Gas Fund, LP, launches today. UNG's investment objective is to reflect the changes in percentage terms of the price of natural gas via futures contracts. The ETF is run by Victoria Bay Asset Management, the same firm that manages the US Oil ETF (USO). The prospectus contains a useful primer on the natural gas market:

Housing Hangover - 04/18/07

County home prices fall for 9th month ( Sonoma - CA )

A spring home sales surge wasn't enough to keep Sonoma County prices from falling for the ninth consecutive month in March.

The March median resale price was $565,000, down 1.7 percent from a year ago. The stretch of price declines is the longest in 14 years, according to the latest Press Democrat monthly real estate report.

Foreclosure Record Eclipsed in March

Mortgage lenders repossessed a record number of San Diego County homes in March, bolstering fears that the region's housing slump is worsening.

The 433 homes lost in foreclosure represented a more-than six-fold increase over the previous March, when there were only 66 such repossessions, according to La Jolla-based DataQuick Information Systems. The previous record was 389 homes in October 1996.

Freddie Mac to Buy $20 Billion in Subprime Home Loans

Freddie Mac, the second-largest source of money for U.S. home loans, plans to buy as much as $20 billion in subprime mortgages to help borrowers with poor credit histories avoid default and the loss of their homes.

``To the maximum extent possible we want to approach this from a market driven kind of approach,'' Chief Executive Officer Richard Syron told reporters today at a housing market summit in Washington led by Senator Christopher Dodd.

Mortgage apps fall for fifth week

Mortgage applications continued their recent decline last week, falling for the fifth straight week, according to the latest report by the Mortgage Bankers Association.

The industry group's seasonally adjusted index of mortgage applications dropped 2.5 percent to 630.6 in the week ended April 13, from 649.5 one week earlier.

The four-week moving average, which smoothes out volatility in the weekly figures, eased 1.6 percent.

Company offers $2 billion to refinance subprime loans

Washington Mutual said today it will refinance up to $2 billion in subprime mortgages to help borrowers avoid default and foreclosure.

The program will allow subprime borrowers who remain current on their existing loans and are bracing for payment increases to apply for discounted fixed-rate loans or other refinancing options.

U.S. foreclosure filings rise 47 percent in March

Banks began foreclosure proceedings against 47 percent more U.S. homeowners last month compared with a year ago as falling housing prices made it more difficult for borrowers to refinance mortgages.

More than 149,000 filings were posted in March, the highest number since RealtyTrac Inc. began collecting data in January 2005, the Irvine, Calif.-based research company said Wednesday in a statement. California filings rose to 31,434, more than triple the number a year ago. Nevada and Colorado had the largest percentage gains.

Housing: Is the Worst Over?

Like grief, a housing downturn is a multistage process. Stage 1 is denial: If I hold onto the house long enough, I'll get my price. For the U.S. housing market, this stage began in 2005 and ended in mid-2006. Stage 2 is anger: If I can't sell this house, I'll just cancel the sale of the house I was going to buy, and stay where I am. Cancellations of sales agreements now appear to have peaked. Stage 3 is acceptance: I'll get what I can and move on if necessary.

Energy Briefs - Courtesy of Peak Oil Review

• Algeria may drop plans to build a gas-to-liquids plant and delay some energy projects due to soaring costs, according to the country's oil minister.
• European ethanol production rose 71% in 2006 to ar