the visible hand

it is the theory which decides what can be observed – einstein

Archive for November, 2007

Stealth public bailout of reckless “Countrywide”

Posted by ecoshift on November 28, 2007

I don’t even know what to say. I guess this is just one more item for the National Integrity Index. Normally, I stay away from shame-based attacks and commentary. Now I realize why, too few people in positions of fiscal responsibility seem to have any. Can you say “fiduciary?”

To quote Lily Tomlin: “No matter how cynical I get, I just can’t seem to keep up.”


RGE Monitor
The Stealth Public Bailout of Reckless “Countrywide”: Privatizing Profits and Socializing Losses
Nouriel Roubini | Nov 27, 2007

The letter by Senator Schumer questioning the $51.1 billion that Countrywide borrowed from the Federal Home Loan Bank system (specifically the Federal Home Loan Bank of Atlanta) has finally revealed the little dirty secret – that was known only to a few insiders and was noticed on this blog a month ago – that Countrywide, the largest US mortgage lender, has received a massive stealth public bailout that has put at severe risk taxpayers’ money. Here is Countrywide – the premier poster child financial institution of the reckless and predatory lending practices of the last few years – getting in severe financial trouble because of its rotten lending practice in subprime, near-prime and prime mortgages – and whose CEO Mozilo is under SEC investigation for potentially illegal activities – now receiving a massive $51.1 billion of public bailout money with little official supervision of such lending. Mozilo is under investigation for his accelerated sales of Countrywide stock under a 10b5-1 plan. Mozilo has made more than $100 million on stock sales this year, while Countrywide shares collapsed more than 50%.

As the Schumer letter correctly points out the collateral against this $51 billion loan is mostly toxic waste subprime garbage whose market value is now much lower than the face value of such mortgages; so $51 billion dollars of taxpayers’ money has been put at risk with garbage as collateral for it.

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Google goes green

Posted by ecoshift on November 27, 2007

Google Invests in Green with Renewable Energy Initiative | Epicenter from Wired.com
By Bryan Gardiner EmailNovember 27, 2007 |

Having gained a certain degree of expertise in developing and designing its own energy efficient data centers, Google thinks it’s in a position to help spur on the adoption of even more renewable energy sources.

The Mountain View company announced on Tuesday a new research and development group whose mandate will be to continue to develop electricity from renewable energy sources much cheaper (and cleaner) than coal. The new initiative, dubbed Renewable Energy Cheaper than Coal, will primarily target energy sources like advanced solar thermal power, wind power technologies and enhanced geothermal, according to Google co-founder Larry Page, and the company plans to shell out tens of millions of dollars in 2008 on R&D and related investments.

Google also said it anticipates investing hundreds of millions of dollars in other renewable energy projects which the company also hopes will generate positive returns.

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LA Times: How low will home prices go?

Posted by ecoshift on November 27, 2007

Homeowners’ big question: How low will prices go? – Los Angeles Times
By Peter Y. Hong, Los Angeles Times Staff Writer
November 27, 2007

For most of this decade, skyrocketing home values were a frequent topic whenever people gathered along soccer sidelines or at backyard barbecues. But the conversation has taken an about-face, noted Jeff Vendley, a Ventura mortgage broker who is trying to sell two Oxnard town houses he bought in 2004 and 2005.

Now, he said, people are wondering, “How low we can go?”

No one knows how severe the slump will be, but economists and real estate experts interviewed by The Times, and who were willing to make predictions, said prices could fall 15% to 25% before turning back up.

Most said values would continue falling through at least next year, and some thought the market wouldn’t reverse course until 2010.

That could translate to big declines for home buyers who bought at the peak of the market, which various measures place in late 2006 or early 2007.

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Jittery consumers seem likely to trigger a recession

Posted by ecoshift on November 27, 2007

Just remember all you jittery consumers out there, if we dip into a recession, it will be you who pulled the trigger. The economy is depending on you. And you are about to let us down. What are you thinking? One HDTV is enough? What about the basement and the kid’s rooms? Surely you have a few more thousand to go before all your cards are maxed out. Buck up. Nothing like a little debt to build character.


Jittery consumers seem likely to trigger a recession – Nov. 25, 2007
Don’t look now: Here comes the recession
By Colin Barr, senior writer

NEW YORK (Fortune) — The cash registers were ringing on Black Friday, but make no mistake: American consumers are jittery, and seem all but certain to push the U.S. economy into recession.

After years of living happily beyond their means, Americans are finally facing financial reality. A persistent rise in energy prices will mean bigger heating bills this winter and heftier tabs at the gas pump. Job growth is slowing and wage gains have been anemic. House prices are sliding, diminishing the value of the asset that’s the biggest factor in Americans’ personal wealth. Even the stock market, which has been resilient for so long in the face of eroding consumer sentiment, has begun pulling back amid signs of deep distress in the financial sector….

With consumer spending accounting for about three-quarters of U.S. economic activity, some economists say it is inevitable that the economy will stop growing at some point in the coming year, for the first time since the mild recession of 2001. “Right now, the question is how bad it’s going to get,” said David Rosenberg, chief North American economist at Merrill Lynch. “The question is one of magnitude.”

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OPEC: Iran and Venezuela push for weak dollar statement

Posted by ecoshift on November 17, 2007

I’m not specifically targeting oil stories recently. After all, asset value write downs at the major investment banks look like they may total a half a trillion dollars, inventories of new and existing homes remain high, we are hearing the word recession more and more often from various analysts including a lead article in the Economist, and, of course discussion of local TPZ policy continues at the county level. There are plenty of things think about.

Never the less, this story seems worth noting. With oil prices still near a recent peak, and the dollar index tentatively slowing it’s rapid depreciation in the past week this story may have more to say about where our economy is headed than all the others — not to mention US foreign policy. We’ll see what they decide…


FT.com / World – Opec nations clash over weak dollar
By Javier Blas and Ed Crooks in Riyadh
November 16 2007 22:30

Opec countries meeting in Saudi Arabia clashed on Friday over the declaration to be made by leaders at this weekend’s summit, as Venezuela and Iran pushed for a statement on the impact of the weak dollar on the group’s revenues.

The disagreement was revealed when a ministerial meeting Friday afternoon, supposed to be in closed session, was accidentally broadcast live to reporters.

The Iranian and Venezuelan ministers called for more radical measures and a specific mention of the effect of the dollar to be added to the draft declaration.

But Saud Al-Faisal, the Saudi foreign affairs minister, warned the meeting: “The mere mention that Opec is studying the issue of the dollar is going to have an impact.”

He said a reference to the US currency in the declaration could cause the dollar to “collapse”.”

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Oil price rise causes global shift in wealth…

Posted by ecoshift on November 10, 2007

I was just reading the Washington post article (below) and finally realized that… well, it turns out that Russia, Iran and Venezuela have quite a bit of our oil. Now, with oil prices rising, they are “enjoying the benefits.” And, just to make matters worse China is buying our oil with our money and, apparently, it’s still not enough. How can this be fair? I blame Hillary.

At least Iraq isn’t enjoying the benefits. And the Saudis don’t count.

Oil Price Rise Causes Global Shift in Wealth – washingtonpost.com
Iran, Russia and Venezuela Feel the Benefits

By Steven Mufson
Washington Post Staff Writer
Saturday, November 10, 2007; Page A01

High oil prices are fueling one of the biggest transfers of wealth in history. Oil consumers are paying $4 billion to $5 billion more for crude oil every day than they did just five years ago, pumping more than $2 trillion into the coffers of oil companies and oil-producing nations this year alone.

A few selected quotes from the article:

The benefits, to the tune of $700 billion a year, are flowing to the world’s oil-exporting countries.

  • Two of those nations — Iran and Venezuela — may be better able to defy the Bush administration because of swelling oil revenue. Venezuela has used its oil wealth to dispense patronage around South America, vying for influence even with longtime U.S. allies. And Iran could be less vulnerable to sanctions designed to pressure it into giving up its nuclear program or opening it to inspection.
  • Russia, the world’s No. 2 oil exporter, shows oil’s transformational impact in the political as well as the economic realm. When Vladimir Putin came to power in 2000, less than two years after the collapse of the ruble and Russia’s default on its international debt, the country’s policymakers worried that 2003 could bring another financial crisis. The country’s foreign-debt repayments were scheduled to peak at $17 billion that year.
  • Russia’s gold and foreign-currency reserves have risen by more than that amount just since July. The soaring price of oil has helped Russia increase the federal budget tenfold since 1999 while paying off its foreign debt and building the third-largest gold and hard-currency reserves in the world, about $425 billion.

Oil-importing countries face their own challenges….

  • In the United States, the rising bill for imported petroleum lowers already anemic consumer savings rates, adds to inflation, worsens the trade deficit, undermines the dollar and makes it more difficult for the Federal Reserve to balance its competing goals of fighting inflation and sustaining growth.
  • A scarcity of diesel fuel even hit China’s richest cities — Beijing, Shanghai and trading ports on the east coast — which in the past have been kept well supplied. In Ningbo, a city south of Shanghai, the wait at some gas stations this week was more than three hours, and lines stretched more than 200 yards.
  • Rumors circulated that gas stations or the government was hoarding fuel in anticipation of further price increases, prompting the official New China News Agency to warn that anyone caught spreading rumors about fuel-price increases will be “severely punished.”
  • Since shedding orthodox Maoist economic policies, China’s leaders have unleashed decades of pent-up demand. China consumes 9 percent of world oil output, up from 6.4 percent five years ago, according to the International Energy Agency. Yet it still subsidizes fuel. As a result, consumption this decade has skyrocketed at an 8.7 percent annual rate despite soaring prices and concerns about the environmental impact of profligate fuel use.

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World Energy Outlook 2007: vigorous, immediate and collective action crucial

Posted by ecoshift on November 8, 2007

Yet, another call for the capacity to cooperate…
Here’s link to the World Energy Outlook 2007 report.


FT.com | Transcript: Interview with International Energy Agency chief economist Faith Birol

FB: “We want more action, instead of more targets and more meetings and more talks.”

EC: “And, we really need that action right away?”

FB: “Exactly, right away and in a bold manner.”


The End of Oil is Upon Us. We Must Move On – Quickly – Autopia from Wired.com
By Chuck Squatriglia
November 07, 2007 | 6:30:33

If there are any lingering doubts as to whether the age of oil is nearing its end, the International Energy Agency has put them to rest and made it clear that only a massive and immediate investment in sustainable energy will prevent a global crisis.

The agency states in no uncertain terms in its annual World Energy Outlook that “alarming” growth in worldwide energy needs will within a generation threaten energy security, accelerate global climate change and possibly bring worldwide shortages and conflicts.

It’s an unusually pessimistic view from an agency that has long said oil production, with trillions of dollars of investment, could meet rising energy needs. But the explosive growth of China and India has caused a seismic change in thinking at the IEA, which says we must move swiftly, boldly and decisively beyond fossil fuels if we are to avert a crisis.

“All countries must take vigorous, immediate and collective action to curb runaway energy demand,” Nobuo Tanaka, head of the IEA, said. “The next ten years will be crucial for all countries… We need to act now to bring about a radical shift in investment in favor of cleaner, more efficient and more secure energy technologies.”

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we could have it all: development, sustainability and profitability

Posted by ecoshift on November 8, 2007

i gather yesterday’s hearing on the TPZ building moratorium at the board of supes chambers was a zoo.

in some ways it seems like a no brainer. beautiful county. lots of land. few people. absolutely incredible coastline. the most productive forestland in the world. the beating heart of the redwood biome.

people want to live, visit, vacation here. people want to buy our wood. everybody likes our remote wildernessy quality of life.

so it’s simple.

  • we green build homes and venues for wildernessy experiences.
  • we restore, protect and manage productive forestland in a certified wildernessy way.

we allow clustered development in appropriate areas. we distribute the benefits of focused developments: we buy existing subdivision entitlements. we set aside core areas to protect the resiliency of the ecosystem. we allow residential use on existing TPZ parcels. we recover development value and we retain our most productive timber and ag land for timber and ag.

go team. everybody profits. even the big money. even the small TPZ landowners. even the environment. what’s the problem?

we are politically insignificant on a statewide scale. even more insignificant on a national scale. tossed about by national political and economic trends and veritably bitch slapped by global economic forces that are unaware that we even exist. the dollar is falling through the floor. home prices falling. credit tight. losses from the first round of subprime shakeout now a trillion dollars if not more: failed mortgage lenders, bank write-downs, lost home equity. global warming heating up. national home builders ready to go belly up. oil ready to break 100 a barrel. no bottom in sight. this hits us hard in both lumber and real estate markets.

do we pull together to protect and maximize our competitive economic advantages?
no. we piss and moan. blame each other. nurse decades old grudges. attack imaginary weaknesses in our enemies. overlook deceptive behaviour among allies — until they diverge from our narrow agenda du jour. we buy into bubble peaks and sell our future into crashing markets.

developers, landowners, ranchers and timberland owners, with few development alternatives, fixate on protecting their rights to profit from peak bubble real estate prices through underlying patent parcel entitlements. patent parcels drawn up 100 years ago with little to no concern for water courses, water sources, appropriate road access, fire safety, habitat or even access for timber management. an out of control real estate market puts dollar signs in the most committed rancher and timber managers eyes — and in the eyes their heirs.
we call this protecting private property rights.

meanwhile suburban environmentalists fixate on protecting conservation values and beating back the development bogyman using a state law designed and written at a time when timber values dominated remote real estate values and a community backlash against the egregious liquidation practices of a vulture capitalist to change 30 years of residential use patterns on timberland parcels zoned for TPZ and prevent residential development or TPZ rural residential subdivisions outside of high density sub-urban development zones. these moves take little to no account of baked in equity values for existing land owners, small and large, who’ve been buying, selling and building on these parcels for the past three decades.
we call this protecting public trust values.

and, of course, everyone mistrusts and blames the county thereby gutting our ability to act in our collective long-term self-interest while big money focuses on short term profit.

we could have it all. profitable green development and restoration. sustainably profitable productive forests and high conservation values.

what we have, is a failure, to cooperate.

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Green building to remain “unaffected” by the current housing slowdown

Posted by ecoshift on November 7, 2007

Green Building Market to Grow More Than $2B by 2011
GreenerBuildings.com

NEW YORK, Nov. 5, 2007 — A new report from market researcher SBI finds that the booming green building market will continue its rapid expansion through 2011, more than doubling in size to $4.7 billion in the next four years.

The report, “Green Building Materials in the U.S.,” also finds that the market for green building materials has been growing at a rate of 23 percent per year through 2006. Although the growth is expected to slow slightly — growing only by 17 percent per year — but will remain unaffected by the current housing slowdown in the U.S.

The boom has been fueled by a combination of commercial and residential building buyers and occupants, as well as people undertaking DIY renovation and upgrade projects. These groups, the report’s authors find, are now considering energy efficiency, indoor air quality and other measures of sustainability fundamental to occupying homes and offices.

Another prediction in the report suggests that green flooring, whether through sustainable or renewable wood products or other green methods, will leapfrog from the slowest-growing segment of the green building market to the fastest-growing segment by 2011.

The report, which is available to purchase from SBI, also covers emerging opportunities in the green building market, including the expansion of the green residential market, how competing green standards will affect the market, and profiles of the biggest players in the market.

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Carbon calculus

Posted by ecoshift on November 7, 2007

The Carbon Calculus – New York Times
By MATTHEW L. WALD
Published: November 7, 2007

CHANGE is in the works that could go a long way toward making alternative energy less alternative, and more attractive to consumers and businesses.

It’s not a technological fix from some solar-cell laboratory in Silicon Valley or wind-turbine researcher in Colorado or the development of some superbug to turn wood waste into ethanol.

Rather, the change would come from Washington, if Congress does what it has talked about and puts a price tag on greenhouse-gas emissions. Suddenly the carbon content of fuel, or how much carbon dioxide is produced per unit of energy, would be as important as what the fuel costs. In fact, it might largely define what the fuel costs.

That could shake up the economics of energy, handicapping some fuels and favoring others. Those that produce hefty emissions, like coal and oil, would likely look much worse. And some — sunlight, wind, uranium, even corn stalks and trash as well as natural gas — would probably look much better. “Carbon-negative” fuels that take carbon dioxide out of the atmosphere as they are made, might even become feasible.

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