Your Money and the Price of Oil (from English Aljazeera)

It doesn’t take an economist to figure out that our future looks pretty bleak and that some of the new words coming into American consciousness are bad news: subprime, hedge funds, debtor nation and a host of others.

Weird Wally has tried to understand all of it, but the articles about current economic trends always seem to involve a lot of numbers and graphs and since WW is not a numbers kind of guy (they actually give WW a headache), he gets it but does not understand it.

This morning however, WW came across a piece on English Aljazeera that seems to explain a very complicated situation in such a way that even WW caught a glimpse of understanding.



NEWS BUSINESS
Oil prices continue surge


Investors bought futures believing interest rates will fall, weakening the dollar and feeding demand। Oil futures have briefly pushed past $101 a barrel after the US Federal Reserve lowered its forecast for US economic growth this year, convincing energy investors that the central bank will slash interest rates further. The contract for March delivery of light sweet crude, which was expiring later on Wednesday, rose 73 cents to settle at a record $100.74 on the New York Mercantile Exchange after earlier rising as high as $101.32, a new trading record.

That is just below the $101.70 peak, adjusted for inflation, hit in April 1980, a year after the Iranian Revolution, according to the International Energy Agency.

On Tuesday, the contract had jumped $4.51 a barrel.

The Federal Reserve said damage from the housing slump and problems in the credit markets will slow economic growth to between 1.3 per cent and 2 per cent this year, down from a previous forecast for GDP growth of between 1.8 per cent and 2.5 per cent.

Oil investors often react by selling on concerns that the economy - and thus demand for oil, is cooling – or as they did on Wednesday, by buying on the prospect that interest rates will fall, weakening the dollar and feeding new buying of oil futures.

Phil Flynn, an analyst at Alaron Trading Corp in Chicago, said "the Fed was ... the catalyst to get us going here".

Falling rates tend to weaken the dollar, and crude futures offer a hedge against a falling dollar.

In the moments after the Federal Reserve released its forecast, oil prices spiked sharply.

Cooling US economy

Two new economic reports on Wednesday suggested the US economy is cooling.

The labour department said its consumer price index, a measure of inflation, rose by 0.4 per cent last month, more than economists expected.

The commerce department said construction of new homes and apartments rose by 0.8 per cent in January, but that applications for building permits, an indicator of future activity, fell by 3 per cent.

The reports come a week after the Energy Department, the Organisation of Petroleum Exporting Countries and the International Energy Agency all lowered their oil demand growth forecasts for this year.

But the prospect that the Federal Reserve will reduce rates proved too strong on Wednesday, feeding a new buying frenzy, analysts said.

There are concerns that high oil prices – and the higher petrol and heating oil prices they spawn – are sowing the seeds of their own destruction by contributing to the economic slowdown.

"The price gains raise questions about their sustainability in the face of eroding fundamental strength," said Antoine Halff, an analyst a Newedge USA LLC in a research note.

Weird Wally Wants to Know

What is the best possible sound bite for a situation such as this?

Al Jazeera Partners With NBC...is that cool..uncool or what?

NEWS AMERICAS
Obama and McCain win in Wisconsin...

McCain easily defeated Huckabee in Wisconsin [EPA]
Barack Obama and John McCain have chalked up more victories in the US presidential race.

Obama won the Wisconsin primary for the Democratic nomination on Tuesday night, his ninth straight triumph over Hillary Clinton, while McCain easily won the Republican contest, Al Jazeera's US broadcast partner NBC projected.

Republican and Democratic voters flocked to the polls in Wisconsin despite bad weather conditions. Obama cut deeply into Clinton's political bedrock, splitting the support of white women almost evenly with the former first lady and running well among working class voters in the Midwestern state, according to polling place interviews.

McCain easily dispatched Mike Huckabee, the former Arkansas governor, and edged closer to the 1,191 delegates needed to clinch the party's nomination.

Obama's words

"I will fight every moment of every day in this campaign to make sure that Americans are not deceived by an eloquent but empty call for change," the Republican nominee-in-waiting said in a thinly veiled attack on Obama.

In focus
In-depth coverage of the US presidential election His words seemed to echo Clinton's, who all but conceded Wisconsin even before the release of results.

Addressing supporters, Clinton never mentioned her Wisconsin loss and instead attacked Obama's oratorical talent as empty and meaningless.

The primary campaign "is about picking a president who relies not just on words but on work - on hard work to get America back to work", she told a Youngstown, Ohio, rally on Tuesday night, adding that the "best words in the world are not enough" unless they are matched with action.

Obama began the evening with eight straight primary and caucus victories, a remarkable run that has propelled him past Clinton in the overall delegate race and enabled him to chip away at her advantage among elected officials within the party who will have convention votes as "super delegates".

Clinton, who was hoping to blunt some of Obama's momentum, will have to win next month in Ohio and Texas to salvage her presidential campaign.

Democrats in Hawaii, where Obama was born and is a heavy favourite, also voted on Tuesday, as did Republicans in Hawaii and Washington state.

Source: Agencies

Yes We Can vs. No, You Can't -- NO SE PUEDE.

The Republican music video: The obvious answer to, "yes we can," is, "no you can't!"

What is Jungle Capitalism?

Weird Wally came across the following post on Scholars and Rouges and was really impressed with what the author had to say. Seems like the big corporations created a "culture of greed," and fucked over us American citizens. Now, a lot of citizens are saying, "fuck you," back to the corporations and walking away from their debts. WW wonders of the Law of Karma might be manifesting itself. After all, what goes around comes around.

Welcome to the jungle How "gatcha capitalism" has destroyed the American Social contract

In order for a disparate group of individuals to band together into a workable community, there have to be rules, both implicit and explicit. There are laws that people agree to follow to preserve the good of the whole, and there are social constructs developed that the members adhere to. “Don’t screw your friends.” “Play fair.” “You get what you pay for.” Basic principles that everyone (at least overtly) respects, thus maintaining the even keel of the group.

But we’ve seen over the last thirty years a slow, deliberate erosion of those sort of rules, replaced with the glorification of the individual self as paramount. Nothing else matters but you and what you get for yourself. As long as you profit and make out okay, fuck everyone else. This has led to deliberately hostile, antagonistic moves between the buyer and seller in almost every kind of financial transaction imaginable, and many other social obligations besides. The name of the game is to screw the other guy, before he screws you.

MSNBC reporter, columnist, and author Bob Sullivan has explored the erosion of the social contract through the lens of what he smartly calls “gotcha capitalism”–how big businesses use inscrutable agreements, hidden fees, and “gotcha” penalties to wring extra profit from the consumer in everything from credit cards to cable TV contracts, taking advantage of nonexistent regulatory oversight to work their will. As Sullivan writes:

Fundamentally, “Gotcha Capitalism” is a story about the death of the price tag, about the constant bait-and-switch tactics that layer on fees and surcharges long after we’re in a position to bargain over them. It’s about rampant false advertising, about the explosion of small print and asterisks and about the seeming disappearance of federal authorities working to keep our marketplaces fair. It’s about a threat to our economic system, which was designed to reward good companies with innovative products, low prices and smart employees, but now benefits cheating companies who hire the best liars and create the most misleading ads and confusing fine print.

You can see Sullivan’s theory (described at length in his excellent book of the same name) play out in decisions like that of Bank of America, which recently decided to hike the interest rates of many of its cardholders for literally no reason–at least no reason it would name, but in truth to help shore up its losses from exposure to the collapsed mortgage market. Essentially, the bank made a huge number of bad deals and is literally punishing its good customers in order to protect itself. By any standard, this is not playing fair.

Speaking of mortgages and not playing fair, Sullivan’s theory manifests again in a withering editorial by Elliot Spitzer, former Attorney General and current Governor of New York. Spitzer blasts the Bush Administration for actively opposing states’ efforts to combat predatory lending, even going so far as to pass federal regulations that blocked states from bringing suits against subprime lenders.

The social contract has been broken. Businesses use every trick in the book, from mandatory arbitration to universal default, to screw consumers over. Our areas of redress in government have not only diminished to insignificance, but often actively assist corporations in screwing us over. Is it any wonder, then, that citizens no longer feel an obligation to uphold their own social contracts, and do things like walk away from homes buried in debt?:

In recent years, we have also become aware of shifting social attitudes: debt is no longer viewed as a “moral” obligation, a binding social contract between consenting parties, but as an adversarial relationship between borrower and lender. Therefore, as conservative businesspeople we must also account for a higher probability that borrowers will walk away from their debts, if it suits them.

(This phenomenon requires a discussion all by itself. In brief, I believe it is ultimately the product of leadership failure, the placing of inordinate emphasis on “free” markets and individualism instead of regulation and the development of cohesive social structures. Let me put it in this - admittedly extreme- way: in the jungle no one owes anything to anyone.)

The glorification of the individual as the ultimate center of the universe brings with it a concurrent lack of shame or guilt. If you are all that matters–if you are everything there is–then you feel no remorse about anything you do. We’ve seen this abhorrent behavior made manifest in the every action of our so-called “leader” for the past eight years, but even Bush is just a symptom of the larger trend. And as a commenter on Sudden Debt notes, that lack of shame has spread from corporations down to individuals, who no longer care about the consequences of defaulting on loans or their mortgages:

I believe the shift in attitude re debt is due to the adversarial attitude taken by lenders. Anyone who’s ever had a debt collector after them can attest to that. Consumers have finally figured out the game. Defaulting on debt has always been a business decision, but the consumer has baggage of shame and guilt. The cut-throat attitude of lenders in getting consumers to borrow, and then collecting the debt has finally taken its toll. Consumers have woken up, and did the only thing they can - refuse to pay.

In order for a society to function, there have to be rules that everyone adheres to. If no one follows the rules, then it really is every man for himself. And if we don’t stop glorifying the self as the ultimate–if we don’t stop treating citizens like criminals and patsies to be played and bilked at every turn–if we don’t reinvest our common government with the power to protect its people–then we’ll have no society.

Welcome to the jungle.

UPDATE: I would be remiss if I didn’t include a link to Sean-Paul Kelley of the Agonist, who communicated very similar sentiments last week, and quoted from the always-excellent Mish Shedlock in the doing.

(Special thanks to Open Left for tipping me off to the Sudden Debt blog।)

another take on how and why we got screwed...

Sam Cooke a change gone come[IN SIGNLANGUAGE]

Happy Monday.

A few lucky people have today off and for others, it's just another Monday.

And the best thing to focus on, on a Monday morning is, "change gone come."

We all live in interesting times and are blessed.

Trust me,
Weird Wally

What Does English Aljazeera Have to Say?: Inside Iraq - Iraq in US politics - 08 Feb 08 - Pt 1

A new kind of news report...not mush available in U.S.A. mainstream media.

Inside Iraq - Iraq in US politics - 08 Feb 08 - Pt 2

What does Aljazeera English have to say?

Anatomy of a Good Screw

Over the past few months Weird Wally could not help but wonder who was asleep at the wheel and let some greedy U.S. banks totally screw the world economy and leave so many Americans unable to pay bills and buy food?

You won't hear much about how it happened in the media, but the truth is out there. At any rate, WW came across the following article in the Washington Post and now realizes how we all got screwed without even being kissed.

Predatory Lenders' Partner in Crime
How the Bush Administration Stopped the States From Stepping In to Help Consumers

By Eliot Spitzer
Thursday, February 14, 2008; A25

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

The writer is governor of New York.

What is Infragard?

Report: Over 23,000 Business Leaders Working With FBI and Homeland Security

The Progressive magazine is reporting that more than 23,000 representatives of private industry are working quietly with the FBI and the Department of Homeland Security. The business leaders form a group known as InfraGard that receives warnings of terrorist threats directly from the FBI before the public does. We (Amy Goodman) speaks with the the reporter who broke the story and the editor of The Progressive, Matt Rothschild. [includes rush transcript].

Infragard's website

This is some scary shit!

Weird Wally

Weird Wally likes Both Barack and Hillary, but this, "Yes We Can," video seems to get at the heart of the matter.

Very cool video, but Weird Wally is still undecided. In November, 2008, WW would vote for either one.

Note: to fully appreciate this video, please watch the above posted video "Yes We Can," first.

Since Weird Wally aspires to be like FOX News, "Fair, Balanced and Unafraid," Here is the John McCain Music Video.