Peak Oil Linkfest - 06/30/07

Oil settles above $70 a barrel


Oil prices settled above the psychologically important $70 a barrel mark on Friday for the first time since August 2006 on worries about gasoline supplies in the heart of the summer driving season.

Light, sweet crude for August delivery rose $1.11 to settle at $70.68 a barrel on the New York Mercantile Exchange after rising as high as $71.06 earlier in the session. Oil last closed above $70 a barrel on Aug. 31.


BP economist: World’s oil is plentiful

The world has plenty of oil left, although China has a growing appetite for all sorts of energy.

That was the message a senior BP economist had at a Thursday presentation sponsored by the Denver Chamber of Commerce.

Mark Finley, head of energy analysis at BP's London headquarters, walked the group of about 20 through BP's annual Statistical Review of World Energy , which was released this month.


Peak Oil Theorists Gush Obfuscation!

I know its too much to expect that determined peak oil theorists like ASPO co-founder Steve Andrews will suddenly admit they're wrong-no matter how many times their predictions of doomsday come and go without the world coming to an end. Sometimes all you can do is to shake your head at the stubborn denial. But Mr. Andrew's rejoinder here on the Huffington Post, to my "Peak Oil is Snake Oil!" piece of 6/25/07 requires some untangling to get at the pertinent facts.


Peak Oil Passnotes: Peak Market Economics

If you earned $1 million a year, life wouldn’t be bad, especially if you had only earned $300,000 a year some 36 months previously. Suppose that in order to carry on earning $1 million a year, you had to invest $20,000 each annum. You would agree and do it, in order to preserve the healthy profits you were pulling in.

Suppose that someone came up to you and asked you to invest $60,000 a year instead of $20,000. They say it would help them out. Then they told you as a result you would only earn $500,000 a year. What would you say? You would politely ask them to insert their head in a painful and probably physically impossible place.


Enrich Oil, Not Uranium!

After nights of rioting, Tehran looks like a war-torn city dotted with charred carcasses of cars and buses and the still smoldering remains of gas stations. Security checkpoints are everywhere while heavily armed soldiers guard public edifices and government buildings.


OPEC: Biofuels Not a 'Magic Bullet'

Despite near-record oil prices, investment in future oil production may be limited, the Organization of the Petroleum Exporting Countries says, due in part to increasing biofuel production.

The U.S. and European Union have already pushed forward policy that encourages replacing oil with biofuels, and the U.S. Senate passed a plan last week that would allow the U.S. government to sue OPEC for manipulating prices. OPEC's response?


Gore's seven point pledge to cut global warming

Al Gore called on people around the world to sign a "7 Point Pledge" promising personal action in curbing global warming.

The former US vice-president unveiled the pledge at a press conference to promote Live Earth, the July 7 concerts to be held in Johannesburg, London, New Jersey, Rio de Janeiro, Shanghai, Sydney and Tokyo. Organisers said the concert, which is being broadcast in more than 100 countries, could be watched and heard by 2 billion people worldwide. "This is a global challenge," Gore said. "We will need a tougher global treaty, we will need every nation to be a part of the solution and we will need individuals all around the world to be part of the solution."


A cleaner North Sea? Ship fuel suppliers hedge bets

European ship fuel suppliers are hedging their bets ahead of tighter fuel quality rules from November amid uncertainty about demand for the cleaner grade and expectations that some ship operators will ignore the new rules.

European Commission regulations banning ships from burning dirtier fuel in the North Sea and the English Channel are aimed at reducing sulphur dioxide emissions that are 700 times higher than sulphur levels in diesel fuel for vehicles.


Peak oilman sticks to his guns

It never hurts to check up on what T. Boone Pickens is saying and doing. The Texas oilman, corporate raider, and philanthropist has serious cred, and it's unlikely that he's giving interviews in order to pump up his investments. His portfolio is well known, and, as he says, "There isn't anybody who can talk a commodity market up more than three or four minutes. The fundamentals will take over at some point."

In a recent interview with the Houston Business Journal, he reiterated his view that global oil production has already peaked:


The Problem's Not Peak Oil, It's Politics

Some "peak oil" cassandras warn that global energy production will soon fall into permanent decline. But a more immediate danger to world oil supplies may be the tempestuous politics of many producing countries. Witness Venezuela's move to wrest control of key oil projects from global companies on June 26. The move echoes steps taken in other nations that will likely either decrease production or slow its growth in coming years. "The oil is in the ground, but serious doubts are being raised about whether countries have the desire and means to produce it," says Leo Drollas, deputy director of the Center for Global Energy Studies, a London think tank.


Iran an example of 'peak oil' fear

Iranian citizens are furious the government has introduced petrol rationing. There have been demonstrations, and at least one petrol station was set on fire.

Iran has the world's second-biggest proven reserves of oil but is limited in refinery capacity.

Iranians were only given two hours notice before petrol rationing began.


Rejecting the Real Snake Oil

Last Friday I spent three or four minutes on CNBC's Morning Call explaining what the concept of "peak oil" is to their viewers and arguing a bit with Raymond Learsy about the cause of our growing troubles with oil. Mr. Learsy, not content with that sound bite, wrote "Peak Oil is Snake Oil!" for this site on Monday to expand his attack on the logical notion of oil resource constraints.


Practical responses to peak oil

For those who came in late, it is increasingly clear that global oil reserves are reaching the point where half has been used up, called “peak oil”. After this point supply will no longer meet demand, and prices will rise increasingly steeply until oil becomes inaccessible.

We don’t really know how this will play out in the complex modern world because we have never faced anything like this before. The markets may give a real indication of the change by steadily rising prices, there may be a ratchet effect with an overall rise but regular short decreases in price (as already seems to be happening), or there may be sudden rises and falls until the price becomes meaninglessly high.


Cost of raising Iraq crude output approaches $75b

The estimated cost of boosting Iraq's oil output to six million barrels per day has soared to as high as $75 billion, a government adviser said yesterday.

Iraq's shattered oil industry is currently producing around two million bpd. Officials had said around $25 billion would be needed to triple that figure.


How More Ethanol Means Pricier Pizza

Milk may do a body good, but these days it's probably your wallet that gets the big workout.

Dairy products have become more expensive, causing prices to rise for some of America's favorite foods, from ice cream to chocolate to pizza.


Energy debate must include all options

RTE’S recent ‘Futureshock: End Of The Oil Age’ programme and its dire predictions of an impending energy crisis will hardly have come as a surprise to those who have followed the debate in recent years about ‘peak oil’.

As anyone who has turned on a TV or listened to a radio in the past couple of years will tell you, oil is a finite resource that we have been using like snuff at a wake, and now there’s not a lot left. Soon, all the oil that is being discovered will no longer replace all that has been produced, global production will peak and then begin to terminally decline.


China's farmers need a second liberation

China is in a rapid transition toward industrialization and integration into the world economy. However, this development has had a high price, particularly on the environment, and has put heavy pressure on local energy resources and ecosystems.

In addition, the gap in income and living standards between urban and rural areas, and between the eastern and western regions of China, has widened and the unemployment rate is increasing. Many are concerned that long-term prosperity of the country may be harmed by these social disparities.


Peak Suburbia - Kunstler

I get lots of letters from people in various corners of the nation who are hysterically disturbed by the continuing spectacle of suburban development. But instead of joining in their hand-wringing, I reply by stating my serene conviction that we are at the end of the cycle — and by that I mean the grand meta-cycle of the suburban project as a whole. It's over. Whatever you see out there now is pretty much what we're going to be stuck with. The remaining things under construction are the last twitchings of a dying organism.

Credit Bubble Update - 06/28/07

Stocks and Bond Bull Markets - The Beginning of the End?

LIKE the often-prophesied end of the world, major correction in global bond and equity markets is a long time in coming - so much so that many investors are tempted to think that it may never happen. But, as two of our eminent investment experts comment in the panel discussion below, the most dangerous words in the English language are: 'This time it is different.'


BANK OF INTERNATIONAL SETTLEMENTS WARNS OF GREAT DEPRESSION

The Bank for International Settlements, the world's most prestigious financial body, has warned that years of loose monetary policy has fuelled a dangerous credit bubble, leaving the global economy more vulnerable to another 1930s-style slump than generally understood.

Boston: State, top lenders will seek remedies to foreclosure woes
State officials and executives from leading mortgage lenders are expected to meet today to discuss possible remedies to Massachusetts' wave of foreclosures.

The meeting was called by Dan O'Connell , the Patrick administration's secretary of housing and economic development , who wrote a letter asking the chief executives of the top 10 mortgage lenders in the state to attend, according to a person who has seen the letter but asked not to be identified. The letter did not spell out an agenda for the session, to be held at in the offices of Daniel Crane , director of the Office of Consumer Affairs and Business Regulation.

Subprime woes led to 50 lender failures: MBA

Nearly 50 mortgage lenders have folded due to the subprime crisis as part of a natural thinning of the industry, the leading trade association for those lenders said on Wednesday.

"About 50 (lenders) have suffered the consequences and many of those would have been our members," said John Robbins, chairman of the Mortgage Bankers Association, addressing the Reuters Global Real Estate Summit via teleconference from Washington.

Axed deals reflect subprime chill

Companies are pulling financing deals across the globe, in one of the clearest signs yet that investors’ worries about rising interest rates and US subprime mortgages could be infecting other areas of the credit world and driving up the cost of corporate borrowing.

MISC, the world’s biggest owner of liquefied gas tankers, day shelved its $750m bond offering.

Opaque Derivatives, Transparent Fed, `Bubblenomics': Timshel

The most stunning aspect of the demise of two hedge funds belonging to Bear Stearns Cos. is the almost total absence of transparency surrounding the bailout.

The debacle may finally provoke regulators, who have long suspected that buying derivatives is akin to running through a fireworks factory with a lighted blowtorch in each hand.

Carry trade threatens a deflationary global collapse

Concerns that the credit cycle may be turning down are growing. But so far, the impact on stock markets has been fairly limited.

Investors take comfort in three misguided beliefs. They believe that equities are not expensive and that there is no sign of any diminution in the flood of global "liquidity". Furthermore, they believe that if the worst happens, the US Federal Reserve will come to the rescue.

Banks 'set to call in a swathe of loans'

The United States faces a severe credit crunch as mounting losses on risky forms of debt catch up with the banks and force them to curb lending and call in existing loans, according to a report by Lombard Street Research.

The group said the fast-moving crisis at two Bear Stearns hedge funds had exposed the underlying rot in the US sub-prime mortgage market, and the vast nexus of collateralised debt obligations known as CDOs.

Peak Oil Linkfest - 06/25/07

Hugo Chavez Has an Oil Strategy...But Can This Lead to Liberation?

The nature of Hugo Chavez’s “Bolivarian revolution” is a highly important and widely discussed issue among progressive and radical-minded people. Chavez has carried out a host of social and economic measures whose stated aim is to empower and improve the lives of the poor and politically disenfranchised in Venezuelan society; he has condemned the U.S. as an imperialist and bullying power; and in 2005 he announced that Venezuela was embarking on a project of ”21st Century Socialism.” At a time when the U.S. is waging its “war on the world” and at a time when the U.S. has been spearheading a pounding and brutalizing neoliberal economic agenda for the countries of the Third World—developments in Venezuela have attracted great interest. But what is the actual program and outlook of Hugo Chavez, what is the character of the process unfolding in Venezuela, and where is it heading? Does Chavez’s program represent a real alternative to imperialist-led exploitation, a viable road to liberation in today’s world? And what is the meaning of socialism in today’s globalized world?

Iran Invites Nuclear Watchdog to Tehran

Acting on a request from Iran, the International Atomic Energy Agency said Monday it will send a team to Tehran to work jointly on a plan meant to clear up suspicions about the Islamic republic's nuclear activities.

The invitation, conveyed Sunday by a senior Iranian envoy and made public Monday by the agency, was portrayed by some diplomats as a positive step in IAEA attempts to learn more about past activities that could point toward a weapons program.

Opec oil production edges up in June – Petrologistics

Opec, excluding Iraq and Angola, is set to pump slightly more oil in June because of higher shipments from some members including Iran and Algeria, a consultant said yesterday.
Opec’s 10 members subject to output limits are expected to pump 26.8mn bpd in June, up from a revised 26.7mn bpd in May, said Conrad Gerber, head of Geneva-based Petrologistics, which tracks tanker shipments.

World: Clock Ticking On Global Oil Supply

The debate over how much readily accessible oil remains on Earth has been revived with the release of a new report that suggests there is enough to last about 40 years.

But critics say British Petroleum's 2007 "Statistical Review Of World Energy," released this month, is far too optimistic.

The Fight For The World's Food

Most people in Britain won't have noticed. On the supermarket shelves the signs are still subtle. But the onset of a major change will be sitting in front of many people this morning in their breakfast bowl. The price of cereals in this country has jumped by 12 per cent in the past year. And the cost of milk on the global market has leapt by nearly 60 per cent. In short we may be reaching the end of cheap food.

For those of us who have grown up in post-war Britain food prices have gone only one way, and that is down. Sixty years ago an average British family spent more than one-third of its income on food. Today, that figure has dropped to one-tenth. But for the first time in generations agricultural commodity prices are surging with what analysts warn will be unpredictable consequences.

Will startup build world's biggest biodiesel plant?

Calling itself a biodiesel company "not out trying to go public and whore itself out for investors," a small, aggressive California startup is planning to build a 320 million gallon per year biodiesel refinery in Chesapeake, Virginia.

That's more than ten times the size of typical biodiesel plants, and three times the size of the 90 million gallon per year plants being built in Malaysia.

Norway to boost natural gas exports to European Union by next decade

Norway plans to increase its natural gas supplies to the European Union by up to 55 per cent by the middle of the next decade, the EU‘s energy commissioner said Monday.

“This is important taking into account the expected growth of gas consumption and the need for additional gas supplies in the EU in the years to come,‘‘ Andris Piebalgs said in a statement released during his visit to the Nordic country.

Peak Oil is Snake Oil!

Friday of last week I had occasion to do brief battle on CNBC Morning Call with Steve Andrews, co-founder of what is considered the most influential organization supporting "peak oil", the Hubbert curve theory which predicts future oil availability. Surprisingly there is more than one such organization. And why should that be? The Wall Street Journal summed it up succinctly in an article appearing in the Sept. 14, 2006 issue, stating:

"That argument known as 'peak oil theory' has provided intellectual backing for the boom in crude prices."

A strategic perspective on 21st century energy challenges

Notes from a presentation by Tom Petrie to the Institute of International Education in Denver on June 18, 2007. Reported by Steve Andrews.

Energy will be one of the two or three defining issues we’ll face over the next decade. Since post-1999, we’ve essentially been in a crisis mode. That’s the result of an accumulation of factors.

Driving home theory of peak oil

Cheryl Nechamen knows that when a discussion turns to the theory of "peak oil," listeners' eyes tend to glaze over. So she's been pleasantly surprised at how well talking about the 100-mile diet helps to break the ice.

The peak oil theory is extremely controversial. It stipulates that the world has reached -- or is about to reach -- its peak oil production, and society's demand for oil will soon start outstripping supply, wreaking havoc on the world economy.

In Defense of the Hubbert Linearization Method

The Hubbert Linearization (HL) method (the Hubbert Linearization term was coined by Stuart Staniford, with The Oil Drum) is essentially based on the mathematical observation that a parabolic (bell shaped) curve can be plotted as a line, when we plot P/Q versus Q, where P = annual production and Q = cumulative production to date. The parabolic curve assumption is based on the premise that we tend to find the big fields first. In essence, "Peak Oil" is the story of the rise and fall of the big fields. The parabolic HL model suggests that the world and Saudi Arabia are both probably now in terminal decline. While the overall world decline may be quite gradual, the impact on world oil exports will probably be very severe. See the following article for more information on the HL method: Texas and US Lower 48 Oil Production as a Model for Saudi Arabia and the World.

Russia top offender in gas-flare emissions

A little-known but major contributor to global warming -- gas flaring at oil wells -- has been measured for the first time using satellite imagery and shows that Russia is burning three times more gas than previous estimates, making it the world's worst offender, according to a new US study.

At many oil drilling sites around the world, producers ignite excess gas, sending huge balls of fire into the sky. Environmentalists and World Bank analysts say the practice -- called gas flaring -- needlessly harms the environment and wastes a lucrative energy source.

Credit Bubble Update - 06/24/07

US-China trade war would hit hard in Asia-Pacific

AS PRESSURE grows in the US Congress for tougher action against China on trade and currency issues, the rest of East Asia and the Pacific region worries that it will be caught in the crossfire.

A bipartisan Bill introduced in the Senate in Washington earlier this month was designed to trigger tariffs on imports from China if the Chinese currency is not revalued.

SEC Investigating Insider Trading in Credit-Default Swaps

The U.S. Securities and Exchange Commission is examining cases of suspected insider trading in credit-default swaps, expanding the scope of a crackdown on investors' illegal use of confidential information.

``There are investigations looking into that market,'' Walter Ricciardi, a deputy enforcement director at the SEC, said in an interview in New York today. It would be a ``mistake'' to assume U.S. regulators aren't pursuing a case, even if they've never done one like it before, he said.

Subprime Fallout Could Hit Shares

THE long-scheduled meeting of Federal Reserve policy makers is a highlight of the calendar this week, but with no change in rates expected, investors may focus instead on subprime mortgages, where rates have been changing for the worse.

An index that tracks the subprime market hit a low last week as a group of Wall Street banks participated in an attempt to rescue two hedge funds that suffered severe losses in them.


Corporate greed, corruption, and the coming collapse

The U.S. government, once crafted as a system that would serve the interests of the people, has devolved into a system of plutocracy where corporations control both the government and the people. Virtually every government regulatory department, for example, is now run by the corporations it is supposed to be regulating. Just look at the FDA, USDA, FTC, FCC, NRC (Nuclear Regulatory Commission) and most other government regulatory bodies and you'll find a room full of politicians and bureaucrats who utterly disregard the People while prioritizing the financial needs of influential corporations.

Wall Street stumbles as subprime worries reemerge

Stocks tumbled on Friday, wrapping up their worst week since a global sell-off in February amid fears that trouble at two Bear Stearns hedge funds may signal worse problems lie ahead for credit markets.

Investors also were rattled by news that Democrats in the U.S. Congress introduced legislation to end a tax advantage for investment fund managers as well as a jump in volatility ahead of the rebalancing of several important benchmark indexes.


UAE won't rule out dropping dollar peg

The UAE has not ruled out dropping its currency’s peg to the dollar, but would only do so with the support of other GCC nations, the country’s central bank governor said today.

“For the UAE I can say comfortably and surely that we will not move alone and we will move with other GCC countries,” Sultan Nasser Al-Suweidi told reporters, speaking on the sidelines of the annual meeting of the Bank for International Settlements in Switzerland.

China eases overseas share curbs

China’s securities brokerages and fund managers will be allowed to invest in overseas stocks and bonds for the first time as Beijing looks to reduce soaring foreign exchange reserves and provide alternative investments for its citizens.

The China Securities Regulatory Commission issued new regulations on Thursday allowing the country’s 110-odd securities firms and 57 fund management compan­ies to apply for qualified domestic institutional investor (QDII) quotas to invest in offshore securities.


China warns IMF over renminbi

China on Wednesday issued a pointed warning to the International Monetary Fund not to back US pressure for a faster appreciation of the renminbi in a planned review of global exchange rates.

The People’s Bank of China, the central bank, said in a statement on its website that the IMF “should carry out its duties based on mutual understanding and respect”, especially for the views of developing countries.


Watanabe: Japan won't diversify dollar reserves now

Japan would diversify its huge stash of dollar reserves only if the U.S. currency stabilizes, as a premature move could roil financial markets, the country's vice finance minister for international affairs said on Tuesday.

Hiroshi Watanabe, Japan's top financial diplomat, said that for now the world's second-largest economy has no immediate plans to switch the dollars in its reserves for another currency.

Peak Oil Linkfest -06/23/07

Envoy: Tehran open to nuclear compromise

Key U.S. allies are debating the idea of a nuclear compromise with Iran that would call for only a partial freeze of Tehran's uranium enrichment program -- a stance that could put them at odds with Washington, officials said Friday.

Sign up for: Globe Headlines e-mail | Breaking News Alerts The officials -- U.S. and European diplomats and government employees -- told The Associated Press that the deliberations among senior British, French and German decision-makers were only preliminary and that no conclusions had been drawn.

UN: Climate Change Causes Darfur Slaughter

One fifth of the world lives on less than $1 a day; 1.2 billion do not have access to safe, drinkable water; and every year, 2.2 million die from disease brought on by contaminated water. A clash of civilizations is developing between Islam and the West. On a less life-threatening but still troubling note, 876 million people are illiterate.

An inconvenient Swede

Kjell Aleklett, a perky and persuasive physicist at Uppsala University, talks with characteristic Swedish candour. As president of the Association for the Study of Peak Oil, he jokes that all the big "strawberries" in the world's oilfields have been thoroughly picked over. ("Peak oil" just means the end of cheap oil.) Fifty years ago, the world burned four billion barrels of oil a year and happily discovered lots of big berry patches — 30 billion barrels a year. Today, those figures are exactly reversed, which goes a long way toward explaining volatile oil prices and Sweden's determined plan to get off fossil fuels by 2020. "Money is not running the world," the jaunty global player likes to say during his talks. "Money is used to buy energy." Right.

Peak Oil Passnotes: Let Me Tell You an Inventory

The prospects for oil prices rising have been knocked this week, so we are told. U.S. inventories are at nine-year highs, and the cost of a barrel of Brent crude fell back down below $70 this week, albeit by only a few cents.

But this is not the real story. Inventories in the United States are high because the refinery complex in the country is in such a weak state. Due to bits falling off, explosions, gas leaks and the odd death – another one at BP’s Texas City refinery recently – the U.S. cannot process the crude that is arriving on its shores.

Born In The Eye Of The Storm

I was sitting in the air conditioned sunroom in front of a 46” TV the other day, sipping a gin and tonic and taking in a bit of evening news about the start of the hurricane season. Just off the sunroom, a rack of boneless chicken breasts were marinating as they awaited the grill. Home made potato salad, baked beans and corn on the cob would round out the menu that evening, all foods that made me think of summer days at home when the family would gather for a barbecue. And I thought to myself, what a good life I have had, a simple life by most American standards, but one that would be the envy of thousands of previous generations. While the wealthy and privileged of days yore might boast about their palatial estates, artwork, fancy furniture, and house servants, not one of them could go out and settle into their very own personal automobile, (a vehicle capable of doing the work of over 100 horses), and zip about at the heretofore ungodly speed of 70mph if they had a mind.


Global energy use slowed in 2006: BP

Despite stronger economic growth, the rise in global energy consumption slowed in 2006, according to global energy major BP. Energy prices remained high by historical standards, although price movements in 2006 varied by fuel type and region, BP’s head (energy analysis) Mark Finley told Gulf Times here yesterday. Releasing the ‘BP Statistical Review of World Energy’, Finley said the growth in global primary energy consumption in 2006 was 2.4%, down from 3.2% in 2005 and just above the 10-year average. The growth slowed for every fuel except nuclear power.


Busting the peak oil myth

Last fortnight, a leading oil MNC came out with its Annual Statistical Review of World Energy and leading business papers splashed it across their front pages. This is an annual ritual in which the company reminds the world that oil is a scarce commodity and will soon be extinct like the dodo.

As per the review, India’s oil reserves will last another 19.3 years while global reserves will last 40.5 years.

Texas oil tycoon turning to wind power

Billionaire oil tycoon T. Boone Pickens is wants to make big bucks in wind energy boom by building the world's largest wind farm in West Texas.

Pickens plans to install large wind turbines in parts of four Panhandle counties in a project that would produce up to 4,000 megawatts of electricity.

If Pickens' company, Mesa Power LP, does build the wind farm it would be the largest in the world, American Wind Energy Association spokeswoman Susan Williams Sloan said. It would generate more than five times the 735 megawatts produced at the present largest wind farm near Abilene.


The third trillion barrels of oil: where are they and how will we get them?

Speaking at the recent Society of Petroleum Engineers’ R&D conference BP Group Vice President for Technology Tony Meggs wondered how the industry will get its next trillion barrels of oil.

Today the mind-set of assumed surplus appears to be changing rapidly. People (and governments in particular) are increasingly concerned with where the next barrel is coming from. The prevailing mind set is becoming one of anxiety and insecurity. And not just about the quantity of supply - but who controls it. Concern about climate change adds to our fears. Energy has risen to the very top of political agendas around the world, and it's likely to stay there for the foreseeable future. That's the context in which we're looking for the third trillion.


The Real and Present Danger of U.S. War on Iran…and the Urgency of Resistance

“I think we've got to be prepared to take aggressive military action against the Iranians to stop them from killing Americans in Iraq. And to me, that would include a strike over the border into Iran…”
-Senator Joseph Lieberman, interviewed on CBS News Face the Nation, June 10

This statement by Lieberman is the latest in a string of charges, warnings, and military threats against Iran by the Bush administration, others in the U.S. ruling class, and international allies of the United States. They reflect the rapid and profound intensification of contradictions across the Middle East, rising tensions between the Bush regime and the Islamic Republic of Iran, and the grave danger of a U.S. military attack on Iran. Most people, including many deeply opposed to the Iraq war, are either unaware of or greatly underestimate this danger. This situation must change—now. Any U.S. attacks would be unjust and criminal no matter the pretext. It would represent a major escalation—with unpredictable consequences—of naked imperialist aggression by the U.S. in the Middle East.


Russia suggested forming “grain OPEC”

Russia has proposed a new organization to coordinate world grain trade should be created, the Russian Minister of Agriculture said Wednesday. The new organization has already been called Grain OPEC, as their structures have much in common.

The minister noted that all countries of the world should balance their grain production and consumption in view of growing requirements for grain to produce bio fuel and supply industries. Thus, it is vital for grain-producing countries to coordinate their efforts in trade and production.


Pemex Says May Oil Output Falls 6.6% From Year Ago

Petroleos Mexicanos, the state-owned oil monopoly, said crude production fell 6.6 percent in May from a year earlier and dropped to its lowest this year as the company struggles with declining output from its Cantarell field.

Daily output was 3.11 million barrels, down from 3.33 million in May 2006, the Mexico City-based company said today in a report on its Web site. January's production of 3.14 million barrels was the previous low for the year.


Clock ticking on global oil supply

The debate over how much readily accessible oil remains on Earth has been revived with the release of a new report that suggests there is enough to last about 40 years.

But critics say British Petroleum's 2007 "Statistical Review Of World Energy," released this month, is far too optimistic.

The Peak Oil Crisis: Approaching The Cliff

Last weekend across southern South Dakota the pumps went dry. Gas terminals from Sioux Falls to Yankton to Sioux City were empty. “There is simply not enough fuel coming down the pipeline into the delivery system” said a BP station owner. Eventually the tankers were sent to Nebraska to find gas. A minor glitch in the distribution? Possibly, but more likely a harbinger of more serious problems to come.

Meanwhile, I would like to tell you that Congress, which has been debating energy bills for the last two weeks, is getting ready to pass legislation that will make our lives easier during the troubled years ahead. Sadly, I cannot. From their public pronouncements and posturing, it is unlikely more than a dozen members of Congress have the slightest idea of what 2007 energy legislation should be trying to accomplish in an urgent manner.

Busted! Illegal Business Operation

Credit Bubble Update - 06/20/07

500 Top foreclosure zip codes

The most foreclosure activity is clustered in two area; old Rust-Belt areas and new Sun-Belt ones.

More than a quarter of all leading foreclosure zip cdes are in California but many of the worst-hit zip codes are in the Midwest. Ohio has 49 zip codes in the top 500, trailing only California and Florida, which has 72.

Michigan has 34, including four in the top 10. All of them are within Detroit city limits.

Dollar falls broadly, tracks bond yields lower

The dollar slipped against the major currencies on Tuesday as U.S. bond yields continued to retreat from five-year highs hit last week, eroding their appeal to foreign investors. At the same time, the euro retreated from a record peak against the yen and treaded water against the dollar after a surprising decline in German business confidence in June. In recent weeks, the dollar has closely tracked Treasury yields, hitching a ride higher as strong U.S. economic data boosted the benchmark 10-year note's yield to 5.33 percent and sent the euro to almost a three-month low against the greenback. But with little major U.S. economic data on tap this week to guide traders, a bond market retracement has curbed the dollar's gains and weakened the case for the Federal Reserve to boost interest rates in 2007.

Subprime mortgage bond index drops to record low

Bids for the main index of subprime mortgage bonds dropped to a record low on Tuesday as concerns of losses at a hedge fund and weak housing suggest a deeper downturn for the debt.

The ABX-HE BBB- 07-1 was bid at 59.24 on Tuesday, down from levels above 60 on Monday, according to dealer indications to a portfolio manager.

Global Credit Cycle Crunch

Is a credit cycle crunch about to befall global finance? There are those who would argue that although mature Western economies could certainly feel the pinch if credit trends begin to reverse, Eastern economies are immune from such considerations with growth prospects for the area still so robust. And you need to realize a great many investors have their portfolios aggressively positioned with this belief in mind, having thrown all sense of caution to the wind. What's more, it should be realized what we will call ‘complacency' has now gripped the investing public and their professional money managers like never before, primarily predicated on the belief portfolio insurance schemes disingenuous bankers sell them will actually protect assets in the end.

Peak Oil Linkfest - 06/19/07

Some Analysts Say Ethanol Boom May Stumble

As ethanol production expands rapidly and efficient systems for distributing biofuels are lacking, some Wall Street and university analysts say in an Associated Press report that a supply glut and shrinking profit margins will cause a stumble in the ethanol industry.

"It's going to be a little bit of a bumpy ride, I think, but in the long run we are bullish on renewable fuels and believe that they are going to be a part of our domestic fuel stream for a long time to come," says Ommen, chairman, president and CEO of US BioEnergy, in the report.

Oil crisis 'to hit in four years'

A CRUSHING global recession could be just years away according to a new reports which claim world oil production is set to peak much faster than previously thought.

The Oil Depletion Analysis Centre in London and other scientists from around the world argue that oil production will peak in four years and then rapidly decline due to overwhelming demand.

Wall Street, Iraq and the Declining Dollar

The disastrous impact on the economy of George W. Bush's response to the attacks of September 2001 is still being measured. On Friday of last week the Bush Administration announced that it would not re-nominate Gen. Peter Pace as chairman of the Joint Chiefs of Staff. The Administration's decision to throw a loyal supporter overboard avoids a messy confirmation hearing that would have further focused a war-weary nation's attention on the past. But sometimes looking backward can help us anticipate the future.

Peak Oil Passnotes: The Name Is Bonds, T-Bonds

Is it really time to be getting out of commodities? The general wisdom coming from the mass media says it is. We have seen a definite twitch in the long-term trend of the bond markets and this has prompted all kinds of fluctuations across equity markets, leading to fears of a recession. This in turn will damage the price of oil and gas, energy in general, and send it lower goes the thought process.

Pentagon vs. Peak Oil

Sixteen gallons of oil. That's how much the average American soldier in Iraq and Afghanistan consumes on a daily basis -- either directly, through the use of Humvees, tanks, trucks, and helicopters, or indirectly, by calling in air strikes. Multiply this figure by 162,000 soldiers in Iraq, 24,000 in Afghanistan, and 30,000 in the surrounding region (including sailors aboard U.S. warships in the Persian Gulf) and you arrive at approximately 3.5 million gallons of oil: the daily petroleum tab for U.S. combat operations in the Middle East war zone.

Where is the North American Natural Gas Market Headed?

The graph below prepared by EOG Resources (using data provided by IHS Energy) illustrates the most important thing you need to know about the North American natural gas market. Decline rates of gas wells have almost doubled over the last 10 years!

Natural gas wells normally produce a their highest rates as soon as they are put into production. Over time the gas flow rates decrease until the revenue stream from the gas production is less than the cost required to maintain production. This is when the wells are shut in or abandoned.

From Peak Oil To Dark Age?

With global oil production virtually stalled in recent years, controversial predictions that the world is fast approaching maximum petroleum output are looking a bit less controversial. At first blush, those concerned about global warming should be delighted. After all, what better way to prod the move toward carbon-free, climate-friendly alternative energy?

Oil Market Under Pressure, Supply Not Able to Counter Demand

The Organization of Petroleum Exporting Countries (OPEC) and Western consumers seem to be heading towards a conflict.

In recent weeks, statements made by both parties, OPEC and the International Energy Agency (IEA), the statistical arm of the Organisation for Economic Co-operation and Development (OECD), have shown increased tension based on growing concerns of consumers about the oil supply situation.

World Energy Patterns Showed Evidence of Shifting in 2006

The year 2006 was another year of high and volatile energy prices. But despite high prices, world energy consumption growth remained above average, continuing the trend of recent years. Energy use is also increasingly shifting away from OECD countries and becoming more carbon-intensive.

It was a year when energy markets were once again the centre of attention, attracting the interest of politicians, consumers and policy-makers alike.

The Cost of Gasoline around the World

These last weeks the MSM has been reporting news that, wouldn’t it be for the seriousness of the Hubbert Peak, would belong in the section of bizarre news of your local newspaper. First it was the report by PFC Energy that imposed a responsibility on oil exporting countries to supply oil importing countries. Jérôme showed his indignation on this kind of pressure on oil exporters to bring crude on the market, no matter what.

Oil dependence spells economic disaster for Ireland, Lee warns

Ireland is on course for an economic recession in the coming years if we do not reduce our dependence on oil, according to warnings from a new RTE television programme.

The programme, Future Shock: End Of The Oil Age, explores the challenges that Ireland faces when global oil reserves have been depleted. The central message of the programme, which is presented by RTE’s chief economics correspondent George Lee, is that it is only a matter of when, not if, oil reserves run out.

Kingdom's Oil Consumption Rises Amid Economic Boom - KSA

The Kingdom's domestic oil consumption went up by 6.2 percent to 2 million barrels per day (bpd) last year from 1.89 million bpd in 2005 in the wake of economic boom, while its oil production for the international market declined by 2.3 percent during the same period, the "BP Statistical Review of World Energy June 2007" released yesterday said.

Economic analysts attributed the growth to the surge in economic development, especially the decision to set up economic cities, industrial estates and IT parks in different parts of the Kingdom.

I Was Wrong!

Even the worthy Homer sometimes nods. My thinking has been all kattywhompus. Go to my archives and delete everything! Well… maybe you should keep that story about being a bum since unlike everything else it’s not a victim of perception management.

I’m so ashamed. I have ridiculed our Beloved Decider. All along I believed him to be a retarded cowboy bent on toppling governments, bankrupting America, shredding the Constitution and starting a world conflagration.

Ok… well… maybe all that is true. But it’s also pure genius!

Iran says nuclear talks with Europe could continue soon

Iran said Sunday that it would likely resume talks with European officials over its disputed nuclear program in the next few days.

The talks would be a follow-up to discussions in Madrid at the end of May between EU foreign policy chief Javier Solana and Ali Larijani, Iran's chief nuclear negotiator.

Scientists reportedly dispute BP's oil-reserve forecast

Scientists have criticized BP PLC's review of the world's remaining oil reserves, warning that the end of oil is coming sooner than governments and oil companies are prepared to admit, The Independent reports Thursday.

BP's Statistical Review of World Energy, published Wednesday, suggests that the world still has enough "proven" reserves to provide 40 years of consumption at current rates. The assessment, based on officially reported figures, has once again pushed back the estimate of when the world's oil will run dry.

OPEC Won't Increase Current Output Level

The Organization of Petroleum Exporting Countries said Thursday that there was no need for the group to inject further oil supplies into the market in the face of rising demand, an implicit rebuke to the International Energy Agency's call this week for urgent new supplies from the group.

In an unusual statement well ahead of its formal policy meeting Sept. 11 in Vienna, OPEC Secretary General Abdalla Salem el-Badri said 12-member OPEC, which currently meets 35 percent of the world's oil consumption, would maintain its daily output of 30 million barrels a day.

How Peak Oil went mainstream

Matt Drudge has just taken Peak Oil mainstream.

Up until today, you could randomly ask 10 people on the street what “Peak Oil” is and you’d get a blank stare from at least nine of them. I’d wager that as of yesterday, Drudge himself would have been among that vast majority.

Both Ways - Kunstler

It seems to me you can call the situation in Iraq a lot of things, but it's not a war. Not at this point, anyway. Call it an unsuccessful nation-building project, a failed occupation, a botched policing job, a monkey-in-the-middle clusterfuck. All the US political factions, from left to right, do the public a disservice by calling it a war, because it misrepresents what we're doing there.

Hilarious clip on Taxes.

Debt, Deficits, Derivatives & Delusions - 06/17/07

China's trade surplus surges 73 percent

Just last month, China announced plans to buy $4.3 billion of U.S. technology as a way to show how serious it is about reducing the ballooning trade gap with the U.S.

So it must have come as a mixed blessing in Beijing to see that China's antigravity trade surplus soared again in May to the third-highest monthly level on record, according to government figures released Monday.

China's Chinalco to buy Peru Copper

Peru Copper Inc. said Monday it's agreed to a $792 million acquisition by government-owned mining giant Aluminum Corp. of China in a deal that takes out one of the few remaining independent copper-mining companies.

Vancouver-based Peru Copper, which has an agreement to develop copper deposits in the South American country's Toromocho project, said it has received a friendly takeover bid valuing the company at $6.22 a share (C$6.60) in cash.

BIS cautions over surge in takeover debt

The Bank for International Settlements has warned that the current takeover boom across the world is being funded by ever greater levels of debt, storing up trouble should rising inflation lead to a sharp rise in interest rates.

The bank's quarterly report, released today, said merger and acquisition activity had reached an unprecedented $1,100bn (£560bn) in the US over the first five months of this year, and $1,000bn in Europe.

Greenspan not worried Chinese will dump Treasuries

There is little reason to fear a wholesale pullout by China out of U.S. government bonds, former Federal Reserve Chairman Alan Greenspan said on Tuesday.

While expressing concerns about China's runaway growth rate and what he described as overvalued stocks, Greenspan played down the prospect that Chinese authorities would sell Treasuries in earnest, forcing a sharp spike in U.S. interest rates.

Conspiracy or coincidence?

A bad day for stocks - and for gold, which closed Tuesday in New York at $647.10, down over $7 on the day and sharply down from its April lunge at the $700 level.

First a proprietary word: The Hulbert Gold Newsletter Sentiment Index, which represents the average gold market exposure among a subset of short-term gold-timing newsletters, stood at a reading of 21.4% on Tuesday night. That's not dramatically low - gold exposure can go well into negative territory. But it's a change from the over-enthusiasm (50%) that Mark Hulbert thought gold-timers were displaying earlier this month, when gold reached $671 See June 5 column

Bulls brave inflation and Zimbabwe's political turmoil

Notwithstanding the world's highest inflation rate - by far - and the world's fastest-contracting economy, the Zimbabwe Stock Exchange is booming, with share prices trebling in real terms in just 22 weeks.

Earnings and growth fundamentals cannot begin to explain the 4,500 per cent surge in the ZSE Industrials index since December 2006. Instead, analysts cite three main influences - the market is drowning in liquidity as the central bank prints money at a breakneck pace; the Zimbabwe dollar has collapsed in the parallel (unofficial) market from Z$2,900 to the US dollar at the start of the year to between Z$75,000 and Z$100,000 today, and the ZSE is more casino than market as investors throw increasingly worthless Zimbabwe dollars into penny stocks.

Swiss sales dash hopes of gold recovery

Switzerland's central bank is to sell a further 250 tonnes of gold, dashing hopes for a revival in depressed bullion prices after months of heavy selling by Spain and Belgium.

"This is quite significant, if you think that Britain's entire sales were 400 tonnes", said Ross Norman, director of the TheBullionDesk.com.

Markets could cope with doubling of US deficit

Global capital markets would be able to finance a near-doubling of the US current account deficit to $1,600bn a year by 2012, a McKinsey study published on Friday argues.

The study, by McKinsey Global Institute, breaks new ground in analysing the sources of funding for the deficit, and what a large dollar depreciation would mean for different industries and US trading partners.

Yields May Not Be A Threat Yet

With the rising yield of the 10-year Treasury note spooking the markets, it may be worth a historical look vs. the S&P 500. The chart (1962-2007) does show several periods where spikes in the 10-year yield coincided with corrections in the S&P 500 (see the thin black vertical lines). However, the vast majority of the 1982–2000 bull market in U.S. stocks took place during a period where the yield on the 10-year was higher than present level of 5.22% (see green box).

Peak Oil Linkfest - 06/15/07

World oil supplies are set to run out faster than expected, warn scientists

Scientists have criticised a major review of the world's remaining oil reserves, warning that the end of oil is coming sooner than governments and oil companies are prepared to admit.

BP's Statistical Review of World Energy, published yesterday, appears to show that the world still has enough "proven" reserves to provide 40 years of consumption at current rates. The assessment, based on officially reported figures, has once again pushed back the estimate of when the world will run dry.

Import Bingo

Live by the imports or die by the imports. With US refineries continuing to struggle, our fortunes with gasoline supply and price are becoming increasingly dependant on imports. And if we aren’t breaking records we have to rely on our broken refinery system.

Where have all the imports gone? Long time passing: A drop in refinery runs and a drop in gasoline imports set the stage for a big up day in the petroleum complex. Traders convinced that gasoline supplies would increase by as much as 2 million barrels were stunned to see that supplies of gasoline basically flat from the dismally low levels from the week before. It's clear that US refiners are in disarray but you still have to give them an "A" for effort, or at least a smiley face and a gold star. Because even with refineries running at a dismal 89.2% of capacity they were able to up gasoline production from the week before to about 9.3 million barrels a day. It is amazing what you can do when margins are sky high. That of course is still short of the average daily demand of 9.5 million barrels a day but it shows that the refiners are focused on doing everything they can to produce as much gasoline as they possibly can.


Qantas' cold comfort

IT was one of those mornings yesterday for hundreds of bleary-eyed passengers out at Melbourne Airport.

Having struggled through Melbourne's coldest morning of the year before dawn, most early passengers went nowhere due to ice on the aircraft.

20 years later, we still have 40 years of oil left

BP Statistical Review of World Energy released a report that estimated there are enough world petroleum reserves to last for 40 years, assuming we consume at our current rates. The article notes that in the 1980’s the amount of proven reserves was also 40 years. 20 years go by, consumption rates change, new customers change, new oil fields are found, old ones produce more, and voila, is we’re good to go for another 40 years of oil.

Peak Oil Update - June 2007: Production Forecasts and EIA Oil Production Numbers

Monthly production records are unchanged except for NGPL:
All Liquids: the peak is still July 2006 at 85.43 mbpd, the year to date average production in 2007 (2 months) is 84.26 mbpd, up 0.2 mbpd from 2006.
Crude Oil + NGL: the peak date remains May 2005 at 82.08 mbpd, the year to date average production for 2007 (2 months) is 81.24 mbpd, down 0.06 mbpd from 2006.
Crude Oil + Condensate: the peak date remains May 2005 at 74.15 mbpd, the year to date average production for 2007 (2 months) is 73.09 mbpd, down 0.25 mbpd from 2006.
NGPL: the peak date is now February 2007 at 8.24 mbpd, the year to date average production for 2007 (2 months) is 8.15 mbpd, up 0.19 mbpd from 2006.

Global warming future: Drought, wildfire, floods, pestilence

Top climate scientists offered Western governors an assessment on the impacts of global warming that sounded like something out of the Old Testament: drought, wildfire, floods and pestilence.

More importantly, the governors themselves put to rest any remaining doubt on a human role in the problem.

"Are there any respected scientific organizations left that dispute what you are saying?" asked Utah Gov. Jon Huntsman Jr., adding, "and you can't say the White House and Congress."

Scientists warn that oil will start to run out in four years' time

Scientists have criticised a major review of the world's remaining oil reserves, warning that the end of oil is coming sooner than governments and oil companies are prepared to admit.

BP's Statistical Review of World Energy, published yesterday, appears to show that the world still has enough "proven" reserves to provide 40 years of consumption at current rates. The assessment, based on officially reported figures, has once again pushed back the estimate of when the world will run dry.

Opec says oil demand at 1.5%

Opec has left unchanged its estimate of 2007 world oil demand growth at 1.5%, or 1.3m bpd, in its June monthly report, according to MarketWatch. Opec has repeatedly resisted calls by oil consuming nations to put more crude on world markets. The group said the US downstream sector was tight, and the market is likely to remain exposed to refinery glitches.

Securing the future - An oil company perspective

Ladies and gentlemen. Good afternoon. It’s a great pleasure to be here today – in some senses returning to my roots. What I would like to do is to step back and reflect on the challenges the world faces in the matter of energy and what we as an industry might do to meet the challenge.

The 21st century dawned with a great sense of optimism. The Cold War, which had dominated the previous half-century, was over and with its end the spirits of the world were lifted. The battle of political ideas had apparently been won - free markets and democracy triumphed over the centrally planned state. A dynamic new information age offered enhanced freedom and prosperity. The revolution in the biological sciences promised health, beauty and longevity. World trade took off and, in the less developed nations, hundreds of millions of people were joining the world economy for the first time, seizing the chance to lift themselves out of poverty.


The future of North Sea oil

Will June 14, 2007, be added to the list of defining dates in the history of North Sea oil? The doomsayers might think so. The chronology goes back to 1964, when the first UK offshore licence was granted. Other important dates include 1967 (when the first gas field started production) and 1975 (when it was oil's turn). Production is past its peak and those of a pessimistic disposition will interpret yesterday's announcement that Shell, along with Esso, are to sell most of their northern North Sea assets as confirmation that the North Sea basin is on a slippery slope of moribundity.

OPEC should raise output: Energy secretary

OPEC should weigh recent projections for higher crude demand this year and raise its output if appropriate, U.S. Energy Secretary Sam Bodman said Wednesday.

This week the International Energy Agency, adviser to 26 industrialized countries, and its U.S. counterpart, the federal Energy Information Administration, both accelerated the rate of oil use growth from the previous month's forecasts.

'Bomb, bomb, bomb Iran'

US Senator Joseph Lieberman's call for cross-border bombing raids into Iran appears to be the culmination of a two-week campaign by proponents of war to put the military option center-stage in the US debate over Iran once more.

The immediate effect of reigniting the let's-bomb-Iran discussions is the undercutting of the recently initiated US-Iran talks over Iraq, which in turn will cause the military confrontation with Iran to be viewed in a new light.

Greenspan says oil output a threat to Mexico

Declining oil output in Mexico could spark a major fiscal crisis there, former Federal Reserve Chairman Alan Greenspan said Wednesday while also railing against U.S. immigration policy.

"There is no doubt that Mexican overall [oil] production is down and if it continues down, and prices don't continue up to offset that, then there is a huge fiscal crisis pending," the former U.S. central banker said via a video link to a business conference in Mexico City.

North Sea running dry says BP

Britain only has enough gas and oil left under the North Sea to last six years at current production rates, leaving us increasingly exposed to volatile supplies from Russia and the Middle East.

The UK saw one of the most precipitous output declines of any nation last year, exceeded only by Saudi Arabia and Norway, BP's Statistical Review of World Energy revealed. The biggest jumps were achieved by the United Arab Emirates and Russia.

Economist Bjorn Lomborg: Global warming is not a priority

Energy Briefs - Peak Oil Review

• Venezuelan President Chavez said last week that an unnamed US oil company has abandoned its oil wells in Venezuela and left.
• Increasing numbers of diesel vehicles has forced oil-exporting Qatar to begin importing diesel fuel. There are now about 500,000 vehicles in the country. Some 84,000 vehicles were imported last year as compared to 26,000 in 2005 and 18,000 in 2004.
• Norway announced that its crude-oil production fell 7.4 percent in May from a month earlier, and that gas production is also falling. The Norwegians are developing new gas fields in the Norwegian Sea and the Barents Sea and eventually will become the world's second-largest gas exporter.
• Natural gas prices surged in New York to a six-month high as the second named tropical storm of the year focused trader concerns on possible supply disruptions this hurricane season, spurring buyers to move gas into storage.
• Changing climate will mean increasing drought in the American Southwest — a region where water already is in tight supply — according to a new study issued by Columbia University’s Lamont Doherty Earth Observatory. [Ed. note: this could hurt plans to establish viable water-intensive production of oil from oil shale deposits in dry NW Colorado/SW Wyoming and NE Utah.)
• China will put climate change at the heart of its economic and energy policies but without committing itself to "quantified emissions-reduction targets," according to Beijing’s first comprehensive policy document on the issue.
• Azerbaijan is richer in oil and gas than previously reported, according to President Ilham Aliyev. He said studies show reserves at Azerbaijan's oil and gas fields are twice the size estimated when the country signed a series of development contracts with Western companies in the 1990s. Azerbaijan is a partner in projects to deliver Caspian Sea energy reserves to the West via oil and gas pipelines to Turkey.
• Bill Holbrook, spokesman for the National Petrochemical & Refiners Association, said the industry has built the equivalent of one large-scale refinery in each of the past 14 years in the form of expansions, and that "basically every major company is contemplating an expansion at a facility somewhere."
• Higher US demand for electricity forecast for this summer will shrink the cushion of surplus power needed to avoid blackouts to 16.5 percent from 17.4 percent a year ago, said the North American Electric Reliability Corp., which oversees the power grid.
• Last week, General Motors announced its selection of battery makers to develop and test battery packs for use in its proposed electric vehicles. Manufacturers say that they've overcome the performance and cost limitations that have been an obstacle to electric vehicles in the past.
• Uranium prices may reach $200 a pound within the next two years. Prices have jumped 12-fold since early 2003, due to shortage, concerns over future production and a lack of investment in new mines.
• Starting last week, Iranian drivers can only buy gasoline using special electronic cards, as part of a plan to ration fuel and cut surging consumption. The government has already increased the price of gasoline 25 percent to 11 US cents a liter.
• High gasoline prices have spurred automakers to make plans to introduce tiny cars into the U.S. market, beginning early next year, when Mercedes plans to begin selling tiny, two-seater Smart models. General Motors unveiled three small Chevrolet concept cars aimed at young car buyers in urban markets. However, research from consulting firm CSM Worldwide shows that American consumers are not very big on very small cars,
• According to the International Energy Agency, by 2015 demand for Opec oil will likely be 38.8 million b/d, up from about 31 million b/d today, while biofuels would provide just 3m b/d.
• A study from the Carnegie Mellon Electricity Industry Center concludes that while enacting policies to subsidize the production of coal-to-liquids transportation fuel would enhance national security by lowering oil imports, encouraging plug-in hybrids powered by coal-generated electricity is a less costly policy that also reduces oil imports and does more to lower greenhouse gas emissions (GHG).
• Back in 2004, leaders of Venezuela’s national oil company said they planned to produce over 5 million barrels per day by 2009 and that they would spend $37 billion to achieve that objective. Half way there—at a time when production should have reached over 4 million b/d—Venezuelan production is well below 3 million b/d and dropping, according to Petrolemworld News.

Debt, Deficits, Derivatives & Delusions - 06/11/07

Spain Shifting Reserve Assets To Bonds From Gold - Fin Min

The Bank of Spain's recent gold sales are part of a strategy to shift its reserves into more profitable fixed-income instruments, Spanish Finance Minister Pedro Solbes said Wednesday.

"What we aim to do is to sell gold, an unprofitable asset, to reinvest in bonds, which are more profitable," a Solbes spokeswoman quoted the minister as saying in answer to a question about the gold sales in a Senate hearing.

I'VE GOT A HOT TIP FOR THE FINANCIAL PRESS

The Labor Department over-estimated job growth again.

Last Friday the department reported that 157,000 new jobs were created in May.

That was considerably higher than the 140,000 that the "experts" had been expecting.

China may want BHP

BHP Billiton could be in the sights of a new $237 billion Chinese state-owned investment fund, according to Bell Potter research chief Peter Quinton.

The new Chinese State Investment Company was established last month to manage part of China's foreign investment reserves and made its debut on the world stage with a $US3 billion investment in private equity firm Blackstone.

LME intervenes in nickel market

The London Metal Exchange has intervened in the nickel market amid suspected collusion at a time of soaring prices and critically low stock levels.

“The LME has detected collusive behaviour in nickel trading and acted to tighten the lending guidelines for the metal significantly,” said John Kemp, analyst at Sempra Metals.

Putin wants new economic "architecture"

President Vladimir Putin sought to reassure investors and foreign leaders that Russia remained committed to free trade and investment for businesses that work here, in spite of a chill in political relations with the West.

But Putin said Russia would integrate with the world economy on its own terms - and possibly not by embracing the current rules of the global economic order.

OTC derivatives to reach USD550trn by 2008, says Celent

Over-the-counter derivatives will exceed the USD550trn mark in 2008, up from USD375trn at the end of 2006, according to a new report from Celent, a research and consulting firm that focuses on the application of information technology in the global financial services industry.

Growing OTC derivatives trading volume, escalating exposure to OTC derivatives and structured deals, the increased complexity of products and lack of trade automation have increased the importance of accurate valuation, according to the report, entitled Risk and Pricing Analytics: Addressing Valuation Challenges in OTC and Structured Products.

The subprime barn door

HOME FORECLOSURES are on the rise, and lenders specializing in subprime mortgages -- that is, loans for homebuyers with blemished credit -- have been evaporating left and right. At long last, lawmakers and regulators have taken an interest in this untidy corner of the mortgage market, and financial-services trade groups are getting in on the act, too, recently issuing a joint statement offering their response to the mess.

Narrowing U.S. trade deficit may lift economic growth

The U.S. trade imbalance with the rest of the world narrowed slightly in April, providing a tentative sign that less-lopsided trade could help lift the economy this year.

With economic growth expected to be only about two-thirds the pace of last year, trade could be an important factor in keeping the economy from stalling, economists said. Growth has slowed in the United States, but economies in Asia and Europe are surging and consuming more and more American exports.

Energy Linkfest - 06/09/07

Peak Oil Passnotes: What Price Energy Security?

If the quest for energy stability is one that the world’s major economies want to pursue, then things are not going well. If you take a second to stand back and look at the countries that produce large quantities of energy then it seems obvious that we are destined to have some major problems. That is if you like cheap energy. If you like high prices then things look good.

China and India reject climate change deal

China and India yesterday poured cold water on the climate change deal reached at the G8.

They both rejected attempts by America to make environmental targets dependent on their willingness to follow suit.

China gave a studied, neutral response to the deal in Germany to move towards cuts in greenhouse gas emissions.

Clean Technology Investment Surges amidst Global Warming

Investments in the clean technology sector soared in 2006, as venture capitalists increased spending by 78 percent to $2.9 billion. Experts say the market is hot amidst concern about global warming, higher energy prices, improved technology, and public policies enacted at the state and national levels.

Crude Oil Tumbles More Than $2 on Signs of Weaker Demand Growth

Crude oil plunged more than $2 a barrel from a nine-month high in New York on concern that rising interest rates may lead to slower growth in demand.

Drive Safely

Who are the major producers of oil in the world? The unsettling answer is Saudi Arabia and Russia. They produce about 9 million barrels of oil a day. And who are the world's major producers of natural gas? Again the answer is unsettling, Iran and Russia. There are students of geopolitics with a special knowledge of energy resources who worry about this. One, the economist Philip K. Verleger, Jr., believes that with regard to Russia and its energy reserves, we are in the second round of the Cold War.

Profiting From Climate Change: Ignore Gore the Bore, Build A ‘Floatel’

Here’s a note from a reader yesterday. It reminded us of an opportunity in offshore real estate. But first the note:

“Hi guys,

“Enjoy your work, keep it up. Be as verbose as you like.

In today’s London missive, Bill Bonner says “Why rising temperatures are a threat to this old ball has never been fully clarified.” Well, I’m sorry Dan missed the film about oil in Melbourne, but you can hire “An Inconvenient Truth” at any DVD place.

The Peak Oil Crisis: Twin problems

As we move into June, we are still confronted with a pair of energy crises that have the potential to upset our way of life. At the global level, worldwide oil production has been stagnant for the last two years. This is true for all the various kinds of liquid fuels we now consume: ethanol, conventional crude, liquids separated from natural gas, synthetic crude from tar sands, as well as other flavors of hydrocarbons that can be converted to liquid fuels. Demand for oil from China, India, Russia, and the oil producing Gulf States is still increasing dramatically; demand from the developed countries is flat or increasing slowly; and as usual, the poor countries, who cannot afford $70 a barrel oil, are going without.

Relocalization: A Strategic Response to Climate Change and Peak Oil

Here are a few of my predictions: Many trends of the last century or more, made possible by cheap and abundant energy sources, are going to be reversed. These trends include population growth, centralization of political and economic power, vastly increased quantity of global trade, and mass tourism. But what does that mean?

Natural Gas Prices Heading Higher Again

Investors err in believing summer time is slow for stocks.

When we began coverage on the uranium sector three years ago, an investor could have thrown a dart at any uranium company and made money.

Profiting from the Chinese pork shortage

I was captivated when I read in yesterday's Wall Street Journal [subscription] that the Chinese government, in response to a growing pork shortage brought about by the country's growing prosperity, was considering tapping into its STRATEGIC PORK RESERVE. Really. Apparently, it has stockpiled frozen pork as well as pigs on the hoof against the day meat prices skyrocket.

Can you afford $20 per gallon?

The answer is Peak Oil. The question is what will make $3 a gallon gas seem like the good old days. In the early '70s a geologist working for the oil companies, King Hubbert was his name, predicted that in the early years of 2000 world oil production would peak (it has, at 84 million barrels per day) but oil consumption would surpass supply (it has, by a million barrels per day so far). The oil companies believed him, so they stopped building refineries 30 years ago (no oil to refine, no need for new refineries), so when a few refineries go offline it hurts supplies and prices raise. They also started trying to find a replacement to oil but nothing can and they have looked.

I see a red bar and i want to paint it black

Some see the world as black and white yet others try to find the shades of gray. If I had to choose how the crude market saw the world yesterday I would say they would color it bullish. Assuming bullish was a color. Well I guess it could be assuming you don’t see the world as black or white.

My temper is rising. Must be global warming . . .

The climate debate is reaching a crisis. When I hear the words “global warming”, my temperature rises to the point where I want to reach for a gun.

Back in 1976 BCCC (Before Catastrophic Climate Change), Peter Cook and Dudley Moore did a Derek and Clive sketch called Cancer, tut-tutting over everything as a symptom of the big C. “I heard that George Stit had moved away from the Willesden area and gone up round Chadwell Heath.” “Cancer?” “Yeah.” “Tch, Christ. You remember the Nolan twins? . . . They’ve taken up darts.” “Cancer?” “Yep.” “Tch.” If they were around to remake that sketch in AD (Anno Doom-ini) 2007 it might be called Global Warming.

Peak oil: A detailed and transparent analysis

Industry professionals and studious observers, through the Association for the Study of Peak Oil (ASPO) and other networks, have made a remarkable contribution to the dialogue concerning future oil production. They continue to provide detailed analysis, using all of the data available to them, and present a compelling argument for a near-term peak in global oil production. A growing number of government, corporate and community stakeholders find the case convincing and increasingly robust.

Dr. Ron Paul Debate After Party

here are the 3 spammers who are spamming the online polls on behalf of Dr. Ron Paul

Energy Briefs - Peak Oil Review

• OPEC increased crude production in May as higher output from some members including Algeria and the United Arab Emirates countered a drop in Nigerian production. May supply from the OPEC-10 countries was 880,000 bpd less than in October, or about 52 percent of the total production cut pledged.
• Venezuela and Vietnam signed a series of agreements last week to produce heavy crude and build a refinery in Vietnam.
• Germany and the European Commission reacted angrily to President Bush’s apparent change of heart on climate change, setting the stage for a stormy G8 summit of rich industrialized countries this week. "The declaration by President Bush basically restates the US classic line on climate change -- no mandatory reductions, no carbon trading and vaguely expressed objectives," said EU Environment Commissioner Stavros Dimas.
• US oil and gas royalties are some of the lowest in the world, according to a US GAO report. Countries like Angola, Australia, and Egypt, and states like Wyoming, Alaska and California, all asked more for their resources than did the US federal government.
• The number of rigs drilling for oil and natural gas in North America rose by 36, or 1.9%, to 1,910, according to a weekly update issued by Baker Hughes Inc. The U.S. rig count was 117 units higher than a year ago, while the Canadian tally was down by 157 from last year.
• A spokesman for Imperial Oil says work on the proposed Mackenzie Valley gas pipeline is ongoing, despite comments Wednesday from Exxon Mobil CEO Rex Tillerson suggesting the project will be shelved. Speaking at the company's annual general meeting, Tillerson said it may abandon the long-delayed pipeline project if the Canadian government does not foot part of the bill.
• Russia's Federal Agency for Natural Resources has postponed for two weeks a decision on whether or not to revoke the license for a huge Siberian gas field controlled by BP’s Russian unit.
• A consortium of several South Korean firms said it has confirmed the existence of a large offshore oil deposit in Russia's West Kamchatka region. The field, 40% owned by the South Korean firms and 60% by Russia's Rosneft, has an estimated 10 billion bbl of crude oil in place. A spokesman for the state-run firm said the field could provide South Korea—which imported 880 million bbl in 2006—with oil for more than a decade.
• The year-on-year decline in oil and gas production in the UK’s sector of the North Sea is continuing its decline. Oil production was down 5 per cent on the month at 1,403,005 barrels per day (bpd) and down 14 per cent on the year, while natural gas output production decreased 3 per cent and 6 per cent respectively to 8,581 million standard cubic feet per day (mmcfd).
• Toyota posted record sales of hybrids in the US in May 2007, with 36,101 units sold, up 110% on an unadjusted basis from May 2006. The increase is based entirely on sales of the Prius and Camry hybrids.
• The Dubai Mercantile Exchange, the Gulf sheikhdom's venture with Nymex Holdings, started crude oil futures trading last week, competing with Intercontinental Exchange in setting prices for Asian importers and traders.
• Talks between Iran’s nuclear negotiator and a top envoy for the EU ended late Thursday with few signs they were closer to breaking their deadlock over Iran’s nuclear ambitions. Javier Solana, the European Union’s foreign policy chief, said talks with Ali Larijani, the Iranian negotiator would start again within weeks.
• A cold snap in Argentina led to electricity and natural gas shortages last week, idling factories and taxis and causing sporadic blackouts in the capital. The coldest May since 1962 strained Buenos Aires' electrical grid for three nights, forcing authorities to slash power supply nationwide and briefly cut domestic natural gas exports to Chile.
• US economic growth slowed to 0.6 per cent last quarter in the worst performance for the economy in four years, according to the latest government estimates. The anemic performance was worse than economists expected but is likely to be viewed by the Federal Reserve as a prelude to a broad-based recovery.
• Angola's oil production is expected to increase to 1.8 million b/d at the end of this year as against current 1.4 million b/d, according to the official news agency ANGOP.
• California Governor Schwarzenegger and Ontario Premier McGuinty signed a Memorandum of Understanding on climate change. Under the accord, Ontario and California will partner to fight global warming by coordinating policies on low-carbon fuel standards. Ontario will require producers to reduce carbon emissions from transportation fuels by 10% by 2020.
• The US auto industry started rolling out a comprehensive campaign to convince Americans to oppose proposed increases in the Corporate Average Fuel Economy (CAFE) standards, and to pressure their elected officials to vote down such proposals.
• Sales of electric bicycles have skyrocketed in China, now the global leader in this inexpensive form of motorized transportation. At least 1,000 companies have sprung up to meet the demand. Sales have almost doubled every year. Last year, Chinese bought 16 million to 18 million electric bicycles.
• AeroVironment announced that it performed a fast charge demonstration of a lithium chemistry electric vehicle battery pack. The 35kWh (kilowatt-hour) battery pack, designed to allow the truck to travel more than 100 miles on a single charge, showed the capability of being fully charged in less than ten minutes.
• According to Fortune Magazine, as gasoline prices hit an all time high of $3.227 Congress has taken the easy way out. Instead of doing anything substantive about the US' demand for gasoline, it has gone searching for phony villains - and found them in the personage of mysterious "price gougers."
• Japan's jet fuel exports have been rising as refiners focus more on exports amid weak domestic demand for oil products.
• With Texas, Washington and California leading the way, the U.S. is the fastest growing wind power market in the world, according to a report by the U.S. Energy Department.
• A new oil discovery in western China that may be a third of the size of PetroChina 's Jidong Nanpu is the country's biggest find in 50 years.
• China has discovered huge gas reserves in the southwestern province of Sichuan, and is hoping that the find will help ease growing concerns about energy security, state media reported Monday. A total of 3.8 trillion cubic meters (133 trillion cubic feet) of natural gas deposits have been found in the western part of the Sichuan Basin.

Debt, Deficits, Derivatives & Delusions - 06/05/07

Foreclosure Forecast To Top 2 Million Homes

Foreclosures will top 2 million homes in the wake of the nation's worst real estate crisis since the U.S. Savings and Loan scandal, according to the Housing Predictor forecast.

Gold matches two-week highs

Gold steadied on Monday after matching the previous session’s two-week highs, and analysts said the metal was likely to trade in a range in the near term.

Silver matched Friday’s five-week peak, while platinum and palladium rose to their highest levels in nearly two weeks before easing.

India trade deficit near double on crude costs

India’s trade deficit nearly doubled in April, the first month of the financial year, from a year ago as costs for imported oil jumped, the government said in a statement yesterday.

CBOT to launch credit default swap futures

The Chicago Board of Trade (CBOT) on Thursday said it plans to launch exchange-traded futures contracts on credit default swaps, in an effort to increase liquidity and transparency in the burgeoning credit derivative market.

Banks sell risky portions of CDOs to public pension funds

U.S. securities companies are hawking the riskiest portions of collateralized debt obligations to public pension funds.

At a sales presentation by Bear Stearns to 50 public pension fund managers in a Las Vegas hotel ballroom, Jean Fleischhacker, a Bear Stearns senior managing director, told fund managers they could get a 20 percent annual return from the bottom level of a collateralized debt obligation, or CDO.

Forcing fast RMB rise will be lose-lose situation

Clutching at yuan revaluation like a magic bullet, the U.S. continues to press China for a major appreciation of the renminbi to narrow the U.S. trade deficit with China.

The renminbi was a focus of the second round of the China-U.S. Strategic Economic Dialogue (SED) in Washington last month.

Foreclosures and subprime crisis still a threat to U.S. economy

Foreclosure filings in the United States were up 62 percent in April of 2007 from the previous year according to an Irvine, California-based RealtyTrac. This glum news was somewhat tempered by the fact that foreclosure activity dipped from March of 2007 by about 1 percent.

Statistics from RealtyTrac showed almost 148,000 filings in March such as default notices, auction sale notices, and bank repossessions. Slowdowns or declines in home values and problems with so-called subprime loans made to borrowers with shaky credit histories are widely credited with fueling the housing slump.

Japanese Interest Rates, China-US Dollar Peg Ensure Cheap Credit Flood

What is really going in the stock market? Is it a melt-up or the prelude to a melt down, or both? While Woolworths (ASX:WOW) pursues Coles (ASX:CGJ) and James Packer retreats from the media business and rushes into the gambling, business, we take a quick step back this Monday to take in the whole freakin’ financial circus.

The Great Global Warming Swindle

Energy Links Jamboree - 06/03/07

Road to nowhere?

Last week I attended a hearing on the transportation plan for my county for the year 2030. Similar plans are mandated by federal law for most localities in the United States. Though not explicit, the assumption behind our plan is that liquid fuels will remain cheap and abundant through 2030 and beyond. I suspect that most of the nation's transportation planners share this assumption and that therefore most of the country's transportation plans embrace it.

Driven to distraction

WE are not a serious people. We live in a very serious world and are beset by serious problems that call us to action. Yet our habitual form of action is complaining, and when this is too strenuous for us, we drive ourselves to distraction and find something to take our minds off of actually doing anything.

More drivers, including Utah's governor, are switching to natural gas

California Gov. Arnold Schwarzenegger has his hydrogen-powered Hummer.

Within the next couple of weeks, Utah Gov. Jon Huntsman Jr. will be driving his own own alternative-fuel vehicle - a 2005 Chevrolet Suburban he will be able to fill up for as little as 73 cents a gallon.

Economic View: Self-interest will do more to cut carbon emissions than all the low-energy light bulbs in the world

The wind has shifted direction. The acknowledgement last week by President Bush that the world needed a new treaty to curb carbon emissions, and that the US would support this, is an important back-cloth to this week's G8 economic summit in Heiligendamm on Germany's Baltic coast.

Unsurprisingly there is some scepticism at the President's sudden conversion, and since he is at the tail-end of his presidency, you could say that it is not that significant. That is true in the sense that what matters is the shift of perception that has been taking place over the past three or four years within the US; the President is merely responding to that.

Opec still has us over a barrel

IT takes a plucky writer to admit he is wrong, particularly when there is a certain type of reader out there – usually anonymous, sometimes using joined-up writing – who is happy to tell me I am wrong every week.

But I have been wrong, so far at least, on oil. High oil prices, one of the factors that have complicated the task of the Bank of England and its fellow central banks, are still with us, having climbed back above $70 a barrel in recent weeks. Last week they remained close to that level. Futures markets suggest $60-$70-a-barrel oil for the foreseeable future.

Iran sees higher oil price, warns on supply

A senior Iranian oil official expects the price of crude to increase by five percent during the summer high gasoline demand season and by another five percent during the winter, the Isna news agency said yesterday.

“It is forecast that regarding the increase in gasoline demand in the driving season, the price of crude oil in this period will increase at least five percent and in the winter will have another five percent increase,” Mohammad Ali Khatibi, deputy director for international affairs of the National Iranian Oil Company (NIOC), told Isna.

U.S. denies role in Iraq oil law

The United States did not write Iraq's draft oil law and is not telling Baghdad what to do, a State Department official said in response to allegations.

The senior department official, who spoke to United Press International on condition of anonymity, said "no one has secretly drafted" the law, calling such accusations a "gross exaggeration."

Peak Oil Passnotes: Normalising $70 Oil

In the past week or so, we have once again seen the price of Brent crude touch $70. But now it appears that even a plateau of $70 oil is not worrying politicians and bankers unduly. There is no great hurry on the parts of central banks to raise interest rates. How did we get to this point? And when Brent breaks out of its range, which way is it going to go? Up or down?

Debt, Deficits, Derivatives & Delusions - 06/01/07

ATI Funding Says Dollar's Free Fall Creates Once in a Lifetime Opportunity for Overseas Countries

ATI Funding is able to finance foreign companies as well as foreign governments on equipment and construction loans originating from the USA without collateral up to 100% Financing . ATI Funding's new program will also finance US companies exporting US products at rates and conditions never seen before.

SHINE A LIGHT ON THE PLUNGE PROTECTION TEAM

Dear John: Although I admire your quest to get information on the Plunge Protection Team, I'm not sure why you are doing so. Seems to me, if you consider it OK - in the public interest, as you say, - for the PPT to intervene in some emergencies, then you essentially consider it OK to intervene at all times.

Because who determines what a real emergency is? Where do you draw the line? You either believe in a free market or you don't. I.G.

J.P. Morgan Settles Copper Lawsuit

J.P. Morgan Chase & Co. has settled a long-running antitrust lawsuit filed by copper companies who claimed the bank's predecessor conspired with a Japanese trading house to manipulate the copper market in the 1990s.

A trial had been scheduled to begin Tuesday in federal court in Madison but court officials said the companies settled late Friday. The details of the settlement are confidential.

Bill seeks new US approach to currency battles

Senate leaders are close to finalising legislation that they hope will lead to a reversal of long-standing US policy of opposing intervention in currency markets, according to people familiar with the matter.

The Senate bill is to be introduced in the next month and will put pressure on the US Treasury to intervene in global markets if currencies become fundamentally “misaligned”, people invol­ved in the process said.

Italians claim country run by Goldman Sachs

Italians grumble that Goldman Sachs runs their country, much as the Jesuits ran countries during the Counter-Reformation.

Premier Romano Prodi is an ex-Goldman Sachs man, as is central bank president Mario Draghi and the deputy treasury chief Massimo Tononi.

Funds attack banks’ aid for subprime borrowers

Hedge funds are attacking bank decisions that help delinquent US mortgage borrowers remain in their homes in a move that pits some of the country’s richest people against its least well-off.

The dispute centres on derivatives contracts that pay money to investors when bonds backed by subprime mortgage loans – extended to people with past credit problems – run into trouble. The $1,200bn (€890bn) US subprime mortgage bond market has been hit recently by rapidly growing defaults, and hedge funds have profited from the crisis by buying such derivatives.

Banks are lending to private equity at below the interest rate

UK banks are taking the unprecedented step of lending to the private equity and hedge fund sector at below the official UK interest rate.

Experts said it was a sign of City institutions' growing desperation to buy into the booming alternative investments market.

U.S. Bank Loan Risk Falls on First Day of Derivatives Index

A credit-default swap index based on the U.S. high-yield, high-risk loan market rose in its first day of trading as hedge funds and other investors used the contracts to bet on the ability of companies to repay their bank loans.

The LCDX index rose 0.63 to 100.63 as of 4 p.m. in New York, according to London-based Markit Group Ltd., the index administrator. An increase in the index suggests improvement in the perception of credit quality; a decrease signals the opposite.

More home owners are struggling to make house payments

Dawn and Scott Hentschel came within a sliver of losing their home after Scott, a construction worker, was laid off two months earlier than usual last fall.

The couple saw a legal notice in the newspaper and then a note in the mail that said their bank planned to foreclose on the two-bedroom, ranch-style house they bought two years ago.

Foreclosures still raging in Chicago area

Chicago-area foreclosures, which set a record last year, are projected to reach full-blown crisis levels in 2007.

Cook County is on pace to record at least 30,000 and as many as 36,000 foreclosure filings this year, according to Cook County Circuit Court Judge Dorothy Kinnaird, who presides over the Chancery Division, which handles foreclosures. That would mean a 35% to 62% increase from 2006, when 22,248 filings were easily the highest in county history after having risen 36% from the previous year. (The court combines both commercial and home foreclosures, but residential mortgages comprise the vast majority of its cases.)

Subprime loan crisis is hitting Vallejo hard

Vallejo is the Bay Area's version of ground zero for the subprime loan crisis.

A significant number of residents of the largely blue-collar city of 120,000 have taken out subprime loans -- expensive mortgages issued to people with poor credit.

Venezuela Local Debt Tumbles as Protests Extend to Fifth Day

Venezuelan government debt tumbled in local markets as people took to the streets for a fifth day to protest President Hugo Chavez's decision to pull the country's most-watched television network off the air.

Concern that protests will turn violent again led investors to sell dollar- and bolivar-denominated bonds in the local market and move money out of the country, traders said. Police have detained 182 people since May 27, the day that Chavez let the concession granted to Radio Caracas Television expire, Interior Minister Pedro Carreno said last night.

U.S: Subprime Fallout - How Significant is it for Credit Markets?

In a recent speech, Fed Chairman Bernanke made the point that the impact of subprime lending on the credit markets was not significant. This is a welcome note in contrast to many commentators that portray the world in black and white. Subprime lending is having an impact but not the disaster some commentators assert.

Subprime: Correction or Calamity?
How may we gauge the significance of the subprime correction? First, the ABX bond index (top graph) dropped precipitously from 93 in early January to 63 in late February but recently has moved back up to the 76 level. This suggests that the value of these subprime instruments has declined but that the decline is limited and not building momentum towards a total collapse.