FED UP USA ----- Financial Crisis 2008

This video just came out this morning at http://www.fedupusa.org Please take the time to watch it and get educated about what is happening to us. This may be the most important thing you can do today.

After viewing the video, TAKE ACTION! Sign the petition at http://www.fedupusa.org

BOMBARD your congressmen with emails and phone calls. FORWARD this information to everyone you know. We MUST get their attention.

FAILURE IS NOT AN OPTION. If the bailout occurs, we (the taxpayer) will have to fund it.

Peak Oil Truths and Consequences

Below is an excerpt from Weiss Research,Inc.'s Money and Markets http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=1908
I hear that along with Peak Oil, the world is now hitting Peak Fertilizer. Well, there's enough BS being spread about the oil crisis that it could solve our fertilizer problem in a jiffy.

Much of it is — no surprise — coming from Washington. Another load of bull is coming from our so-called "friends" in the Middle East. Even corporate America, where you might expect common sense to hold some sway, is busy shoveling misinformation. As a result, many investors are left neck-deep, choking, and grasping for a lifeline.

The good news is that I do have solutions for you. More on that in a little bit.

First, I want to start with some Peak Oil truths, half-truths, outright lies, and the dire consequences that are coming due if we don't get on the stick soon.

Truth: America consumes 25% of the
world's oil (20.5 million barrels per day),
but has 3% of the world's oil resources.

Right now, we pump 7% of the world's production (in other words, we are depleting our resources faster than other parts of the world). But we don't have enough oil to meet our own needs — we cannot drill our way out of this.

But here's some good news: Although the U.S. is the biggest consumer of oil, the U.S. represents only 4.8% of the world's population. That means we have plenty of room to save oil by pushing conservation.

Truth: The Saudis aren't our friends.


Despite their recent assurance to raise oil production to record levels within weeks, Saudi Arabia has effectively used propaganda methods for decades to convince governments, corporations and individuals to believe their statements.
The market is grateful because the Saudis are talking about boosting production by 200,000 barrels per day on top of a 300,000 barrel per day hike in May. But this is just bringing Saudi production back to the level it was at in 2006. Why did the Saudis cut production in the first place? Because they want higher oil prices!

OPEC production cuts, rebel attacks in Nigeria, mismanagement in Venezuela and the crashing of production in Mexico have all removed about a million barrels a day from the global market. The Saudi hike barely makes up for half that. With friends like that, who needs enemies?

And while the Saudis say they are raising production ...

Truth: OPEC exports will probably FALL in July.

According to Britain-based tanker tracker Oil Movements, OPEC crude oil shipments are projected to fall by 230,000 barrels a day to a total 24.59 million barrels a day in the four-week period to July 5.

The biggest drop is in the Middle East. Shipments from key Middle Eastern OPEC producers are projected to decrease by 350,000 barrels a day to 17.63 million barrels a day.

Oil Movements forecasts OPEC exports based on spot and term chartering of crude oil from OPEC member countries.

So how does this jibe with Saudi Arabia's promise of more production? Answer: It doesn't! But then, a promise made isn't always a promise kept.

Truth: America isn't in the driver's seat
when it comes to global oil prices.

Global energy consumption increased by 2.4% in 2007 on top of a 2.7% increase in 2006. U.S. energy consumption was flat, while Chinese consumption rose by 7.7%. This year, emerging markets combined (China, India, Russia and their other "life in the fast lane" buddies) will pass the U.S. in oil use. Going forward, global oil consumption is expected to keep climbing even as U.S. consumption eases. After all ...

Americans each use 25 barrels of oil per year.


The Chinese each use 2 barrels of oil per year.


And the folks in India each use just 1 barrel of oil per year.
Where do you think the growth is going to come from? The rest of the world wants to live and drive like Americans!


So with China in the driver's seat and India close behind, the U.S. can't do much to influence prices unless it cuts consumption sharply.


Truth: Refineries are the biggest bottleneck.

The kind of oil U.S. refineries like to turn into gasoline is called light, sweet crude. Light sweet crude is in short supply, especially with the Nigerian oil fields under siege by rebels. But Saudi Arabia and other Middle East countries actually have excess "heavy, sour" crude that is not easily turned into gasoline by most refineries. Iran's state-owned National Iranian Oil Co has been unable to sell about 25 million barrels of crude stored in 14 oil tankers anchored in the Arabian Gulf, even though the price on that heavy oil is discounted by up to $13 a barrel!

Refineries in the U.S. are running at less than 90% of capacity. The culprits: Poor maintenance, reduced productivity of workers, no new technology, and more. And oil companies aren't exactly eager to spend $7 billion to $10 billion and 5 years building new refineries that could handle heavy, sour crude if we're on a collision course with peak oil.

Truth: There aren't enough drilling
rigs or ships to exploit the deep-water
fields in the Gulf of Mexico.

The world's existing drill-ships are booked solid for the next five years.

And that shortage should continue. Transocean, the world's largest drilling company, is building nine new deepwater rigs, and eight of them are already under contracts that run from four to seven years — even before they leave the shipyards!

Those drill ships are designed to plumb the depths of deepwater oil fields, those below more than 1,000 feet of water that represent one of the final frontiers of oil prospecting. In fact, some of the best prospects are in so-called ultra-deepwater fields beyond 5,000-foot depths. Thanks to the shortage, drilling costs for some of the newest deepwater rigs in the Gulf of Mexico have hit $600,000 a day, compared with $150,000 a day in 2002. So while we might eventually find more oil there, it won't be cheap oil.

Half-truth: Billions of barrels of oil are
locked away, out of reach, on federal lands.

Well, sort of. There may be up to 75 billion barrels of oil on land that is currently off limits. But there's probably a lot more than that on 68 million acres of land that oil companies can currently drill, but aren't.

According to the Mineral Management Service two-thirds of the 36 billion barrels of oil believed to lie on federal land, mainly in the Rocky Mountain West and Alaska, are accessible to drilling. Another 89 billion barrels of recoverable oil is believed to lie offshore, and fourth-fifths of that is open to industry. And it's not just oil — in the Gulf of Mexico, four times more natural gas is probably contained in the areas already open to drilling than in those protected by the ban.

In the last four years, 10,000 more permits have been issued to oil and gas drillers than have been used. That means the companies are actually stockpiling extra permits.

As for the offshore areas in the Gulf of Mexico, there are 7,740 active leases and only 1,655 in production. Only 10.5 million of the 44 million offshore leased acres are currently producing oil or gas.

So why do oil companies want to open up new lands for drilling? Maybe it's that if they lease that new land — and stockpile more permits — they can add to their "potential" oil reserves without putting one drill in the ground, and potentially boost their share prices in the short term.

Lie: Drill here, drill now, and pay less.

The talking point in some parts of Washington is that if only we would open up the Alaska National Wildlife Reserve (ANWR) and restricted parts of the Gulf of Mexico to drilling, gasoline prices would fall pretty quickly.

Nothing could be further from the truth. Now let me be clear — I believe we SHOULD open up ANWR and the offshore Florida coast to drilling — eventually we'll want all the oil we can get from those spots, so we might as well start the process now. But it won't affect prices at the pump for years to come. Even if we dropped the ban right now, production probably wouldn't start before 2017.

A 2004 study by the government's Energy Information Administration (EIA) found that drilling in ANWR would trim the price of gas by 3.5 cents a gallon by 2027. If oil prices continue to soar, the savings would be more, but not much. Opening up areas off the Florida Coast may also cut gasoline by a few pennies a gallon when that oil eventually comes to market.

Reason: While offshore territories and public lands like ANWR may contain up to 75 billion barrels of oil, and that may sound like a lot, it won't make a significant difference in a world that uses about 86 million barrels of oil a day and will use even more by the time those fields start pumping.

However, that said, the Democrats are on the wrong side of this issue. Sure it will take years to find new fields and get them producing. But we'll still need oil in 2017, 2027 and beyond, and it will be more valuable — and more useful — than it is now.

So while I'm in favor of drilling off the coast of Florida, people should be aware that it won't lower gas prices anytime soon ... and they should want to do it for the right reasons, AFTER we already have a massive conservation program underway.

The bottom line is that the best thing we can do to lower the price of oil very quickly is to conserve. After all, the cheapest oil is oil you DON'T use.

Lie: Opening up Florida's coast to offshore
drilling will be an environmental disaster.

Actually, drilling industry technology and safety standards in North America are getting better. Drillers have a very good track record in recent years. And remember how Hurricanes Katrina and Rita ripped up rigs all through "Energy Alley"? That didn't cause massive spills.

There IS a "dead zone" the size of New Jersey in the Gulf of Mexico, but it's caused by fertilizer and chemical run-off from Midwestern farms that flush out through the Mississippi. The recent floods in the Midwest and the resulting washout of chemicals into the Gulf are probably causing more of an ecological disaster than new drilling ever could.

Lie: The oil market needs more regulation.


The topic of energy speculation is taking center stage on Capitol Hill this week, where nine bills attempt to limit the role of traders. A House panel examination is set for Thursday.
Oh, please! A U.S. Commodities Futures Trading Commission (CFTC) investigation showed NO evidence of price fixing in the commodities markets. Global investors (perhaps including a fund that's in your 401k) are hedging their bets in the stock market by betting on rising commodity prices. Oil is a commodity that looks like an especially good bet. Therefore, there's speculation in oil futures.

This isn't a plot by the Forces of Evil. It's the way free markets work. And while big funds may buy oil futures contracts, they don't take delivery — in other words, they aren't adding to global demand.

As for regulating the oil companies themselves — while I don't think they need tax breaks, I don't think they need Big Brother riding them either. If they want to drill, let's cut the red tape and get out of their way.

Lie: The government is working to solve the crisis.

This is the most depressing lie of all. I already told you about the Democrats being on the wrong side of offshore drilling. And just last week, GOP members of the Senate put the kibosh on a bill that would have extended tax credits for wind power, solar, and renewable energy sources like biomass, geothermal, landfill gas and trash combustion. There is no good excuse for the GOP action — none — except that it makes their contributors at the oil companies happy (less alternative energy means more demand for oil). And leadership from the White House on this issue has been laughable.

The flood of lies and the inability to see the truth has consequences ...

If America Doesn't Get Its Act Together,
The Consequences Will Be Dire

Here are just three things that could go wrong ...

1) We could lose the natural resource wars. Countries like China and India have a plan. What resources they don't have enough of, including oil, they go out and get by making deals. The U.S., on the other hand, makes enemies.

The U.S. plan was (apparently) to seize the oil from Iraq. That didn't work out so well, though Iraqi oil production is finally climbing. Now, the same people in Washington who wanted to invade Iraq are pushing for war with Iran. If it comes to that ... if the Iranian oil fields go up in flames and they start lobbing missiles around the Middle East ... forget $200 per barrel oil. Heck, oil prices will probably go to $300 or even $400 per barrel.


Apocalyptic literature sales are booming in America as oil prices explode. Author John Walvoord's deep and probing book entitled Armageddon Oil and the Middle East Crisis: What the Bible Says About the Future of the Middle East and the End of Western Civilization has sold over 1 million copies.
2) We could slide into a steep recession. High energy prices are already killing the airlines and hammering American companies both big and small. In contrast, the World Bank just raised China's economic growth forecast to 9.8% from 9.4%.

An expanding Chinese economy is very bullish for oil/diesel/gasoline prices, even though China is cutting fuel subsidies for its citizens. Last week, China announced it was raising the cost of diesel and gasoline by about 42 cents a gallon. But folks in Beijing still get fuel at a discount, and they'll probably have more of it BECAUSE prices went up — before the price hike, fuel stations across China sometimes ran out of gasoline because Chinese companies don't like to sell at a loss.

China's biggest area of growth is internal demand. If it keeps growing while the U.S. economy falters, that could spark more trouble ...

3) The U.S. dollar could tumble even lower. The U.S. dollar is 86% negatively correlated to the price of oil. That means when one goes up, the other usually goes down.

This makes our Arab oil "friends" grind their teeth, because they're selling oil in dollars. If rising oil prices weaken the U.S. economy, pushing the U.S. dollar lower, that's one more reason for OPEC to move to pricing oil in a basket of currencies.

The U.S. dollar is propped up by its role as the world's reserve currency for oil transactions. If that is undermined, that could send the greenback crashing on its next big leg down.

See more of this article at http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=1908

THAT ROSE, FANNIE MAE - versusplus.com HOUSING BUBBLE parody

Oh that rose, FANNIE MAE!!!! The sheeple beg for a bailout. For the rest of us the rose really blows.

Ray Charles - Busted

My bills are all due and the baby needs shoes and I'm busted
Cotton is down to a quarter a pound, but I'm busted
I got a cow that went dry and a hen that won't lay
A big stack of bills that gets bigger each day
The county's gonna haul my belongings away cause I'm busted.

I went to my brother to ask for a loan cause I was busted
I hate to beg like a dog without his bone, but I'm busted
My brother said there ain't a thing I can do,
My wife and my kids are all down with the flu,
And I was just thinking about calling on you 'cause I'm busted.

Well, I am no thief, but a man can go wrong when he's busted
The food that we canned last summer is gone and I'm busted
The fields are all bare and the cotton won't grow,
Me and my family got to pack up and go,
But I'll make a living, just where I don't know cause I'm busted.

I'm broke, no bread, I mean like nothing,

The Federal Reserve is WRONG

Now that Fed Chief Ben "Hanky Panky" Bernanke has begun to acknowledge the housing crisis and its true impact on our economy, the "private recession" in the housing market is becoming public knowledge.

The fact is that "Hanky Panky's" statement the other day about how he wants Fannie and Freddie to "raise more money to purchase loans" and allow people to switch from subprime to federally insured mortgages be will only create further problems for our economy down the road. Since real estate is cyclical, we will eventually have another downturn. The bailout of that next downturn will fall squarely on us taxpayers.

This leads me to believe that the government is beginning to think that it is necessary to bailout the homeowners that are in trouble. THIS IS THE WORST THING THAT CAN HAPPEN.

What we really need is to have housing prices FALL. Yes it will be painful in the short term. The long term benefit of the lowered cost of housing is that "Joe Six Pack" can then actually AFFORD his home, while utilizing CONSERVATIVE mortgages that have none of the ugly surprises that the exotic mortgages of the past held buried within.

We never had this kind of growth in the housing market before, and we hopefully will never have this radical a downturn again....but the next downturn absolutely depends upon our handling this one properly.

I have already seen the benefits of lower cost of development property begin to stimulate that sector of the market. We need for this to apply across all real estate market segments that were inflated beyond their true value.

The bottom feeding has already begun in the residential development world. Lots that builders were paying big bucks for two years ago are now selling at amazing low prices. I am showing a subdivision today that is only $12,500 per FINISHED, pad-ready lot....former retail value over $60,000. This is located in a good area within Central Florida. Hedge funds are beginning to invest in these opportunities with billions of dollars available for 3-5 year projected holds.

I believe that the availability of reasonably priced lots will eventually help with the cost of housing, as long as there is a true downturn in retail housing prices. If the retail prices do not fall, builders and bulk investors will make too much money, possibly causing yet another crisis.

Meanwhile, if anyone wants a deal on some development property, hit me up!

Til next time,

Hobo

Predictions of Massive Bank Failures

http://www.cnn.com/2008/LIVING/personal/02/27/bank.safety/index.html?ref=patrick.net

Between 100-200 bank failures are predicted for the next 12 - 24 months.

Looks like the line may increase at the soup kitchen.

Current Subprime Mess Eclipsing S&L Crisis

Why is it that we are so stupid? It seems we can't learn from our past mistakes. This credit crunch was brought on by the same idiotic lending practices that caused the S&L crisis and now we have even bumped it up a notch.


http://www.mortgagenewsdaily.com/2192008_Subprime_Lawsuits.asp


Subprime Lawsuits Already Outpacing S&L Litigation


Even as the stock prices of investment banks began to fall and foreclosures started to rise, everyone knew what was coming next.
Lawsuits!
So a study released by Navigant Consulting Inc. last week was hardly a shock. The study shows that the number of subprime mortgage-related lawsuits filed in federal courts in the last few months have already outstripped the number of savings and loan (S&L) suits in the early 1990s.
According to the study, there were 97 such cases filed in the first half of 2007; a number that nearly doubled in the second half of the year to 181 for a total of 278 filings in 2007. There were 559 cases handled by the Resolution Trust Company during the S&L collapse, but these cases were over multiple years. Also, the subprime figures compiled by Navigant include only filings in federal courts.
Jeff Nielsen, managing director of Navigant Consulting said in a press release, "The S&L crisis has been a high water mark in terms of the litigation fallout of a major financial crisis. The subprime-related cases appear on their way to eclipsing that benchmark."
Forty-three percent of the 278 suits were borrower class actions, 22 percent were securities cases, and 22 percent were commercial contract disputes. The remainder was bankruptcy, employment, and other cases.
The study found that virtually every participant in the subprime mess is being sued. Fifty-six percent of the defendants are Fortune 1000 firms with mortgage bankers and loan correspondents representing the largest category of companies at 32 percent. However, mortgage brokers, lenders, homebuilders, servicers, title companies, appraisers, and loan servicers are all getting a share of the subpoenas.
Nielsen said "This appears to be just the beginning. We are already observing a steady acceleration of continuing litigation activity into 2008. The course of regulatory investigations, the prospect of government intervention and marketplace variables may affect the volume of filings, but the explosion of cases in 2007 suggests a daunting forecast of what is still to come."
Navigant Consulting is a NYSE firm providing consulting services to government agencies, legal counsel, and large companies. It focuses on industries undergoing substantial regulatory and structural change.