Tuesday, November 27, 2007
This is the 1949 movie based on Ayn Rands Novel The Fountainhead.
Its about the old struggle between Collectivism / Individuality ... all » Socialism vs Freedom
Ayn Rands shows to us her Philosophy of Objectivism, something even the Founding Fathers of America could embrace.
From The Fountainhead, by Ayn Rand
“Thousands of years ago, the first man discovered how to make fire. He was probably burned at the stake he had taught his brothers to light. He was considered an evildoer who had dealt with a demon mankind dreaded. But thereafter men had fire to keep them warm, to cook their food, to light their caves. He had left them a gift they had not conceived and he had lifted dardness off the earth. Centuries later, the first man invented the wheel. He was probably torn on the rack he had taught his brothers to build. He was considered a transgressor who ventured into forbidden terrritory. But thereafter, men could travel past any horizon. He had left them a gift they had not conceived and he had opened the roads of the world.
“That man, the unsubmissive and first, stands in the opening chapter of every legend mankind has recorded about its beginning. Prometheus was chained to a rock and torn by vultures—because he had stolen the fire of the gods. Adam was condemned to suffer—because he had eaten the fruit of the tree of knowledge. Whatever the legend, somewhere in the shadows of its memory mankind knew that its glory began with one and that that one paid for his courage.
“Throughout the centuries there were men who took first steps down new roads armed with nothing but their own vision. Their goals differed, but they all had this in common: that the step was first, the road new, the vision unborrowed, and the response they received—hatred. The great creators—the thinkers, the artists, the scientists, the inventors—stood alone against the men of their time. Every great new thought was opposed. Every great new invention was denounced. The first motor was considered foolish. The airplane was considered impossible. The power loom was considered vicious. Anesthesia was considered sinful. But the men of unborrowed vision went ahead. They fought, they suffered and they paid. But they won.
“No creator was prompted by a desire to serve his brothers, for his brothers rejected the gift he offered and that gift destroyed the slothful routine of their lives. His truth was his only motive. His own truth, and his own work to achieve it in his own way. A symphony, a book, an engine, a philosophy, an airplane or a building—that was his goal and his life. Not those who heard, read, operated, believed, flew or inhabited the thing he had created. The creation, not its users. The creation, not the benefits others derived from it. The creation which gave form to his truth. He held his truth above all things and against all men.
“His vision, his strength, his courage came from his own spirit. A man's spirit, however, is his self. That entity which is his consciousness. To think, to feel, to judge, to act are functions of the ego.
“The creators were not selfless. It is the whole secret of their power—that it was self-sufficient, self-motivated, self-generated. A first cause, a fount of energy, a life force, a Prime Mover. The creator served nothing and no one. He lived for himself.
“And only by living for himself was he able to achieve the things which are the glory of mankind. Such is the nature of achievement.
“Man cannot survive except through his mind. He comes on earth unarmed. His brain is his only weapon. Animals obtain food by force. Man has no claws, no fangs, no horns, no great strength of muscle. He must plant his food or hunt it. To plant, he needs a process of thought. To hunt, he needs weapons, and to make weapons—a process of thought. From this simplest necessity to the highest religious abstraction, from the wheel to the skyscraper, everything we are and everything we have comes from a single attribute of man—the function of his reasoning mind.
“But the mind is an attribute of the individual. There is no such thing as a collective brain. There is no such thing as a collective thought. An agreement reached by a group of men is only a compromise or an average drawn upon many individual thoughts. It is a secondary consequence. The primary act—the process of reason—must be performed by each man alone. We can divide a meal among many men. We cannot digest it in a collective stomach. No man can use his lungs to breathe for another man. No man can use his brain to think for another. All the functions of body and spirit are private. They cannot be shared or transferred.
“We inherit the products of the thought of other men. We inherit the wheel. We make a cart. The cart becomes an automobile. The automobile becomes an airplane. But all through the process what we receive from others is only the end product of their thinking. The moving force is the creative faculty which takes this product as material, uses it and originates the next step. This creative faculty cannot be given or received, shared or borrowed. It belongs to single, individual men. That which it creates is the property of the creator. Men learn from one another. But all learning is only the exchange of material. No man can give another the capacity to think. Yet that capacity is our only means of survival.
“Nothing is given to man on earth. Everything he needs has to be produced. And here man faces his basic alternative: he can survive in only one of two ways—by the independent work of his own mind or as a parasite fed by the minds of others. The creator originates. The parasite borrows. The creator faces nature alone. The parasite faces nature through an intermediary.
“The creator’s concern is the conquest of nature. The parasite’s concern is the conquest of men.
“The creator lives for his work. He needs no other men. His primary goal is within himself. The parasite lives second-hand. He needs others. Others become his prime motive.
“The basic need of the creator is independence. The reasoning mind cannot work under any form of compulsion. It cannot be curbed, sacrificed or subordinated to any consideration whatsoever. It demands total independence in function and in motive. To a creator, all relations with men are secondary.
“The basic need of the second-hander is to secure his ties with men in order to be fed. He places relations first. He declares that man exists in order to serve others. He preaches altruism.
“Altruism is the doctrine which demands that man live for others and place others above self.
“No man can live for another. He cannot share his spirit just as he cannot share his body. But the second-hander has used altruism as a weapon of expoloitation and reversed the base of mankind’s moral principles. Men have been taught every precept that destroys the creator. Men have been taught dependence as a virtue.
“The man who attemps to live for others is a dependent. He is a parasite in motive and makes parasites of those he serves. The relationship produces nothing but mutual corruption. It is impossible in concept. The nearest approach to it in reality—the man who lives to serve others—is the slave. If physical slavery is repulsive, how much more repulsive is the concept of servility of the spirit? The conquered slave has a vestige of honor. He has the merit of having resisted and of considering his condition evil. But the man who enslaves himself voluntarily in the name of love is the basest of creatures. He degrades the dignity of man and he degrades the conception of love. But this is the essence of altruism.
“Men have been taught that the highest virtue is not to achieve, but to give. Yet one cannot give that which has not been created. Creation comes before distribution—or there will be nothing to distribute. The need of the creator comes before the need of any possible beneficiary. Yet we are taught to admire the second-hander who dispenses gifts he has not produced above the man who made the gifts possible. We praise an act of charity. We shrug at an act of achievement.
“Men have been taught that their first concern is to relieve the sufferings of others. But suffering is a disease. Should one come upon it, one tries to give relief and assistance. To make that the highest test of virtue is to make suffering the most important part of life. Then man must wish to see others suffer—in order that he may be virtuous. Such is the nature of altruism. The creator is not concerned with disease, but with life. Yet the work of the creators has eliminated one form of disease after another, in man’s body and spirit, and brought more relief from suffering than any altruist could ever conceive.
“Men have been taught that it is a virtue to agree with others. But the creator is the man who disagrees. Men have been taught that it is a virtue to swim with the current. But the creator is the man who goes against the current. Men have been taught that it is a virtue to stand together. But the creator is the man who stands alone.
“Men have been taught that the ego is the synonym of evil, and selflessness the ideal of virtue. But the creator is the egotist in the absolute sense, and the selfless man is the one who does not think, feel, judge or act. These are functions of the self.
“Here the basic reversal is most deadly. The issue has been perverted and man has been left no alternative—and no freedom. As poles of good and evil, he was offered two conceptions: egotism and altruism. Egotism was held to mean the sacrifice of others to self. Altruism—the sacrifice of self to others. This tied man irrevocably to other men and left him nothing but a choice of pain: his own pain borne for the sake of others or pain inflicted upon others for the sake of self. When it was added that man must find joy in self-immolation, the trap was closed. Man was forced to accept masochism as his ideal—under the threat that sadism was his only alternative. This was the greatest fraud ever perpetrated on mankind.
“This was the device by which dependence and suffering were perpetuated as fundamentals of life.
“The choice is not self-sacrifice or domination. The choice is independence or dependence. The code of the creator or the code of the second-hander. This is the basic issue. It rests upon the alternative of life or death. The code of the creator is built on the needs of the reasoning mind which allows man to survive. The code of the second-hander is built on the needs of a mind incapable of survival. All that which proceeds from man’s independent ego is good. All that which proceeds from man’s dependence upon men is evil.
“The egotist is the absolute sense is not the man who sacrifices others. He is the man who stands above the need of using others in any manner. He does not function through them. He is not concerned with them in any primary matter. Not in his aim, not in his motive, not in his thinking, not in his desires, not in the source of his energy. He does not exist for any other man—and he asks no other man to exist for him. This is the only form of brotherhood and mutual respect possible between men.
“Degrees of ability vary, but the basic principle remains the same: the degree of a man’s independence, initiative and personal love for his work determines his talent as a worker and his worth as a man. Independence is the only gauge of human virtue and value. What a man is and makes of himself; not what he has or hasn’t done for others. There is no substitute for personal dignity. There is no standard of personal dignity except independence.
“In all proper relationships there is no sacrifice of anyone to anyone. An architect needs clients, but he does not subordinate his work to their wishes. They need him, but they do not order a house just to give him a commission. Men exchange their work by free, mutual consent to mutual advantage when their personal interests agree and they both desire the exchange. If they do not desire it, they are not forced to deal with each other. They seek further. This is the only possible form of relationship between equals. Anything else is a relation of slave to master, or victim to executioner.
“No work is ever done collectively, by a majority decision. Every creative job is achieved under the guidance of a single individual thought. An architect requires a great many men to erect his building. But he does not ask them to vote on his design. They work together by free agreement and each is free in his proper function. An architect uses steel, glass, concrete, produced by others. But the materials remain just so much steel, glass and concrete until he touches them. What he does with them is his individual product and his individual property. This is the only pattern for proper co-operation among men.
“The first right on earth is the right of the ego. Man’s first duty is to himself. His moral law is never to place his prime goal within the persons of others. His moral obligation is to do what he wishes, provided his wish does not depend primarily upon other men. This includes the whole sphere of his creative faculty, his thinking, his work. But it does not include the sphere of the gangster, the altruist and the dictator.
“A man thinks and works alone. A man cannot rob, exploit or rule—alone. Robbery, exploitation and ruling presuppose victims. They imply dependence. They are the province of the second-hander.
“Rulers of men are not egotists. They create nothing. They exist entirely through the persons of others. Their goal is in their subjects, in the activity of enslaving. They are as dependent as the beggar, the social worker and the bandit. The form of dependence does not matter.
“But men were taught to regard second-handers—tyrants, emperors, dictators—as exponents of egotism. By this fraud they were made to destroy the ego, themselves and others. The purpose of the fraud was to destroy the creators. Or to harness them. Which is a synonym.
“From the beginning of history, the two antagonists have stood face to face: the creator and the second-hander. When the first creator invented the wheel, the first second-hander responded. He invented altruism.
“The creator—denied, opposed, persecuted, exploited—went on, moved forward and carried all humanity along on his energy. The second-hander contributed nothing to the process except the impediments. The contest has another name: the individual against the collective.
“The ‘common good’ of a collective—a race, a class, a state—was the claim and justification of every tyranny ever established over men. Every major horror of history was committed in the name of an altruistic motive. Has any act of selfishness ever equaled the carnage perpetrated by disciples of altruism? Does the fault lie in men’s hypocrisy or in the nature of the principle? The most dreadful butchers were the most sincere. They believed in the perfect society reached through the guillotine and the firing squad. Nobody questioned their right to murder since they were murdering for an altruistic purpose. It was accepted that man must be sacrificed for other men. Actors change, but the course of the tragedy remains the same. A humanitarian who starts with declarations of love for mankind and ends with a sea of blood. It goes on and will go on so long as men believe that an action is good if it is unselfish. That permits the altruist to act and forces his victims to bear it. The leaders of collectivist movements ask nothing for themselves. But observe the results.
“The only good which men can do to one another and the only statement of their proper relationship is—Hands off!
“Now observe the results of a society built on the principle of individualism. This, our country. The noblest country in the history of men. The country of greatest achievement, greatest prosperity, greatest freedom. This country was not based on selfless service, sacrifice, renunciation or any precept of altruism. It was based on a man’s right to the pursuit of happiness. His own happiness. Not anyone else’s. A private, personal, selfish motive. Look at the results. Look into your own conscience.
“It is an ancient conflict. Men have come close to the truth, but it was destroyed each time and one civilization fell after another. Civilization is the progress toward a society of privacy. The savage’s whole existence is public, ruled by the laws of his tribe. Civilization is the process of setting man free from men.
“Now, in our age, collectivism, the rule of the second-hander and second-rater, the ancient monster, has broken loose and is running amuck. It has brought men to a level of intellectual indecency never equaled on earth. It has reached a scale of horror without precedent. It has poisoned every mind. It has swallowed most of Europe. It is engulfing our country.
“I am an architect. I know what is to come by the principle on which it is built. We are approaching a world in which I cannot permit myself to live.
“Now you know why I dynamited Cortlandt.
“I designed Cortlandt. I gave it to you. I destroyed it.
“I destroyed it because I did not choose to let it exist. It was a double monster. In form and in implication. I had to blast both. The form was mutilated by two second-handers who assumed the right to improve upon that which they had not made and could not equal. They were permitted to do it by the general implication that the altruistic purpose of the building superseded all rights and that I had no claim to stand against it.
“I agreed to design Cortlandt for the purpose of seeing it erected as I dedigned it and for no other reason. That was the price I set for my work. I was not paid.
“I do not blame Peter Keating. He was helpless. He had a contract with his employers. It was ignored. He had a promise that the structure he offered would be built as designed. The promise was broken. The love of a man for the integrity of his work and his right to preserve it are now considered a vague intangible and an inessential. You have heard the prosecutor say that. Why was the building disfigured? For no reason. Such acts never have any reason, unless it’s the vanity of some second-handers who feel they have a right to anyone’s property, spiritual or material. Who permitted them to do it? No particular man among the dozens in authority. No one cared to permit it or to stop it. No one was responsible. No one can be held to account. Such is the nature of all collective action.
“I did not receive the payment I asked. But the owners of Cortlandt got what they needed from me. They wanted a scheme devised to build a structure as cheaply as possible. They found no one else who could do it to their satisfaction. I could and did. They took the benefit of my work and made me contribute it as a gift. But I am not an altruist. I do not contribute gifts of this nature.
“It is said that I have destroyed the home of the destitute. It is forgotten that but for me the destitute could not have had this particular home. Those who were concerned with the poor had to come to me, who have never been concerned, in order to help the poor. It is believed that the poverty of the future tenants gave them the right to my work. That their need constituted a claim on my life. That it was my duty to contribute anything demanded of me. This is the second-hander’s credo now swallowing the world.
“I came here to say that I do not recognize anyone’s right to one minute of my life. Nor to any part of my energy. Nor to any achievement of mine. No matter who makes the claim, how large their number or how great their need.
“I wished to come here and say that I am a man who does not exist for others.
“It had to be said. The world is perishing from an orgy of self-sacrificing.
“I wished to come here and say that the integrity of a man’s creative work is of greater importance than any charitable endeavor. Those of you who do not understand this are the men who’re destroying the world.
“I wished to come here and state my terms. I do not care to exist on any others.
“I recognize no obligations toward men except one: to respect their freedom and to take no part in a slave society. To my country, I wish to give the ten years which I will spend in jail if my country exists no longer. I will spend them in memory and in gratitude for what my country has been. It will be my act of loyalty, my refusal to live or work in what has taken its place.
“My act of loyalty to every creator who ever lived and was made to suffer by the force responsible for the Cortlandt I dynamited. To every tortured hour of loneliness, denial, frustration, abuse he was made to spend—and to the battles he won. To every creator whose name is known—and to every creator who lived, struggled and perished unrecognized before he could achieve. To every creator who was destroyed in body or in spirit. To Henry Cameron. To Steven Mallory. To a man who doesn’t want to be named, but who is sitting in this courtroom and knows that I am speaking of him.”
Monday, November 26, 2007
20th November 2007
(2007-11-20 07:30:00 )
The Harry S. Truman Carrier Strike Group was recently involved in a rescue mission in the Strait after a small boat was found adrift.
According to reports emerging from US naval sources a sailor from USS Truman saw the individual in a small boat as they were trying to signal by waving their paddles. The USS San Jacinto, part of the Strike Group was sent to assess the group.
After providing the vessel with food and water, the
The Strike Group is made up of the USS Harry S. Truman, Carrier Strike Group, Carrier Air Wing 3, Destroyer Squadron, USS Hue City, USS San Jacinto, USS Oscar Austin, USS Carney, USS Winston S. Churchill, USNS Arctic, USS Montpelier, Canadian HMCS Charlottetown, and British HMS
The latter two were in
Truman spending Thanksgiving in Naples
By Sandra Jontz, Stars and Stripes
European edition, Wednesday, November 21, 2007
NAPLES, Italy — In her two years of service in the Navy, Petty Officer 3rd Class Ellysa McCreary has missed two Thanksgivings at home. “I’ve got mixed feelings. I try not to think about it,” the 20-year-old sailor said Tuesday as she plotted navigational coordinates aboard the aircraft carrier USS Harry S. Truman. “This year, I’ll hang out with my buddies and make the best of it, and be thankful for what I do have instead of longing after what I don’t.” What she has is the chance to spend the holiday in Naples, as the carrier pulled into the Italian port city Tuesday morning for its first port visit since leaving Norfolk, Va., on Nov. 5. The carrier is on a scheduled six-month deployment. Holidays away from family usually are the hardest on deployed troops, said Rear Adm. William Gortney, commander of Carrier Strike Group 10, adding that sailors aboard the Truman and other ships in the strike group will make it feel as much like home as possible for those who dine aboard the ship. A nation at war marks “unique” challenges during any ship’s cruise, Gortney said. “For this deployment, we’re sailing into harm’s way, into the unknown,” he said. “It’s not the deployment of the past.” The Morale, Welfare and Recreation office of Naval Support Activity Naples plans to host a marathon of traditional Thanksgiving dinners — with a twist — from 2 p.m. to 10 p.m. Wednesday through Saturday, accommodating visiting sailors and those who live in Naples. Not only will there be turkey, turkey and turkey, there also will be a sprinkling of activities to lure young sailors, from a Texas Hold ’em tournament, to karaoke, a hip-hop show and video games tournament. More than 60 percent of the strike group sailors are on their first deployment — and they’ll miss not only Thanksgiving at home, but also Christmas and New Year’s. Cmdr. Richard Wood, commander of VAW 126 squadron of E-2C Hawkeyes, said he tells his sailors to prepare early for missing holidays at home. “We’ve been talking about this the whole year, getting them ready,” Wood said.
NAPLES, Italy — In her two years of service in the Navy, Petty Officer 3rd Class Ellysa McCreary has missed two Thanksgivings at home.
“I’ve got mixed feelings. I try not to think about it,” the 20-year-old sailor said Tuesday as she plotted navigational coordinates aboard the aircraft carrier USS Harry S. Truman.
“This year, I’ll hang out with my buddies and make the best of it, and be thankful for what I do have instead of longing after what I don’t.”
What she has is the chance to spend the holiday in Naples, as the carrier pulled into the Italian port city Tuesday morning for its first port visit since leaving Norfolk, Va., on Nov. 5. The carrier is on a scheduled six-month deployment.
Holidays away from family usually are the hardest on deployed troops, said Rear Adm. William Gortney, commander of Carrier Strike Group 10, adding that sailors aboard the Truman and other ships in the strike group will make it feel as much like home as possible for those who dine aboard the ship.
A nation at war marks “unique” challenges during any ship’s cruise, Gortney said.
“For this deployment, we’re sailing into harm’s way, into the unknown,” he said. “It’s not the deployment of the past.”
The Morale, Welfare and Recreation office of Naval Support Activity Naples plans to host a marathon of traditional Thanksgiving dinners — with a twist — from 2 p.m. to 10 p.m. Wednesday through Saturday, accommodating visiting sailors and those who live in Naples.
Not only will there be turkey, turkey and turkey, there also will be a sprinkling of activities to lure young sailors, from a Texas Hold ’em tournament, to karaoke, a hip-hop show and video games tournament.
More than 60 percent of the strike group sailors are on their first deployment — and they’ll miss not only Thanksgiving at home, but also Christmas and New Year’s.
Cmdr. Richard Wood, commander of VAW 126 squadron of E-2C Hawkeyes, said he tells his sailors to prepare early for missing holidays at home.
“We’ve been talking about this the whole year, getting them ready,” Wood said.
|USS Tarawa Expeditionary Strike Group (photo courtesy of U.S. Navy)|
4:55 p.m. Guam - The island's economy will get a boost with the arrival of the USS Tarawa Expeditionary Structure Group(TAR ESG). With more than 1,400 sailors from seven vessels and the 11th Marine Expeditionary Unit (MEU), the group will enjoy some rest and relaxation and take part in some community projects while in Guam.
The group is composed of the amphibious assault ship Tarawa; Amphibious Squadron (PHIBRON) One; the transport dock ship USS Cleveland (LPD 7); the dock landing ship USS Germantown (LSD 42); the guided-missile cruiser USS Port Royal (CG 73); the guided-missile destroyer USS Hopper (DDG 70); and the guided-missile frigate USS Ingraham (FFG-61).
Also part of the group is the 11th MEU commanded by Col. John Bullard.
The group is heading west to provide support for the U.S. and coalition forces in Operation Enduring Freedom and Iraqi Freedom. It will also set out toward the Horn of Africa to conduct maritime security operations.
- Pacific News Center - Guam, Saipan, CNMI, Asia-Pacific
November 20, 2007 11:02 p.m. EST
Benjie Telleron - AHN News Writer
Washington, D.C. (AHN) - The White House will dispatch two U.S. Navy vessels to assist in search and rescue operations as well as help provide aid to cyclone-hit areas of Bangladesh.
According to officials, the USS Essex and USS Kearsarge are expected to arrive in
In 1991, the
On Tuesday, an American C-130 cargo plane arrived in
Sunday, November 25, 2007
The US military has stepped up chartering of tankers and requests for extra fuel in the US Central Command area, which includes the Gulf, shipping and oil industry sources say.
A Gulf oil industry source said the charters suggested there would be high naval activity, possibly including a demonstration to Iran that the US Navy will protect the Strait of Hormuz oil shipping route during tensions over Teheran’s nuclear programme.
The US Navy’s Military Sealift Command (MSC) has tendered for four tankers in November to move at least one million barrels of jet and ship fuel between Gulf ports, from Asia to the Gulf and to the Diego Garcia base, tenders seen by Reuters show.
It usually tenders for one or two tankers a month to supply Gulf operations, which include missions in Iraq.
The MSC, asked for comment, confirmed the tenders and said there was nothing abnormal about current requirements in the Gulf, where it has a large military presence and which is home to the US Navy’s Fifth Fleet.
A fifth hire request was recently cancelled, it said.
Fuels specified to be moved between Gulf ports include JP5, high flashpoint jet fuel, used to power F18 fighters aboard aircraft carriers.
“They have been very active,” said a ship industry source, familiar with the MSC tender process, who asked not to be named.
“Out of the multiple charter requirements they issue, they usually do maybe one or two (tankers) a month in the Gulf. They were quiet over the summer months,” he said.
The US regularly carries out naval exercises in the region, moving aircraft carrier strike groups in and out of the Gulf to counter what it says are provocative military manoeuvres by Iran in the Strait of Hormuz and to reassure its Gulf allies.
Iran, which denies Western charges that its nuclear power programme aims to produce arms, has threatened to disrupt oil flows through the Strait if attacked.
According to US figures, oil flowing through the Strait, at the entrance to the Gulf along Iran’s coastline, accounts for roughly 40 percent of all globally traded oil supplies.
Only last week the navy conducted an exercise to counter potential mine-laying by an unnamed foe in Gulf waters. At the same time the Enterprise aircraft carrier strike group concluded a three-day exercise in anti-submarine warfare skills.
The source in the Gulf, with 50 years of experience in the oil industry, said the charters were indicative of extra US military requirements for fuels.
“Bahrain, for example, has confirmed that there are additional volumes being requested by the US Defense Energy Support Center, including JP5,” the Gulf source said, speaking on condition of anonymity.
One of the largest commercial tanker hires is on a time-charter basis, the length of time a ship is sought, stipulating a period of 90 days to carry a range of fuels between locations in the Gulf and the Gulf of Oman.
The time charter, which begins in early December and allows for multiple journeys in Gulf waters, is to carry a minimum of 310,000 barrels of jet and marine fuel, some of it JP5.
“What’s most interesting is the time-charter in the Gulf. It’s a big ship and here we have a commitment for a lot of movement of fuels, backwards and forwards down to the Strait of Hormuz and the Gulf of Oman,” the Gulf source said.
“This confirms there is going to be a lot of activity, possibly a serious demonstration to Iran that the military means to protect the Hormuz Strait,” he said.
He pointed out that Saudi Arabia had already promised US forces long-term fuel supplies this year, known as term tenders.
In February, oil industry sources told Reuters Riyadh had raised the amount of jet fuel earmarked for the military from 1.5 million barrels last year to close to eight million in 2007.
Apart from the time charter, MSC has also tendered for commercial tankers to move 235,000 barrels of marine diesel from South Korea to Jebel Ali and Fujairah in the United Arab Emirates and 310,000 barrels of JA1 jet fuel from Bahrain to Mesaieed in Qatar. Both tankers are required in November.
A separate requirement is for a tanker to move 147,000 barrels of ship fuel from Singapore to Diego Garcia in the Indian Ocean, close to the Gulf and Arabian Sea.
MSC has ships stationed there, known as Maritime Prepositioning Squadron Two, used to support combat operations.
In the past the United States has used the British Indian Ocean territory for long-range bombing raids on Iraq and Afghanistan. Fuel movements have provided advance clues of US intentions.
MSC, the defense department’s transport arm, supplies US forces with its own large fleet of ships, but significantly increases the use of merchant shipping to carry armour and fuels prior to a major exercise and during a war
Although we continue to hope and pray that you are correct in your estimation that no U.S. strike on Iran will happen till much later, if at all, it is necessary to continue to look at worrisome signs.
For example, from (an) attached article:
"A separate requirement is for a tanker to move 147,000 barrels of ship fuel from Singapore to Diego Garcia in the Indian Ocean, close to the Gulf and Arabian Sea.
MSC has ships stationed there, known as Maritime Prepositioning Squadron Two, used to support combat operations.
In the past the United States has used the British Indian Ocean territory for long-range bombing raids on Iraq and Afghanistan. Fuel movements have provided advance clues of US intentions.
MSC, the defense department's transport arm, supplies US forces with its own large fleet of ships, but significantly increases the use of merchant shipping to carry armour and fuels prior to a major exercise
and during a war."
So suddenly the U.S. Navy is chartering four times as much fuel as it has been, including JP5 fuel, used to power Navy jets like the F-18.
"Fuels specified to be moved between Gulf ports include JP5, high flashpoint jet fuel, used to power F18 fighters aboard aircraft carriers."
The question arises, is the U.S. going to spend all this money on just a show of force to intimidate Iran into doing what the U.S. wants it to do, or are they going to do bombing runs?
November 24, 2007; Page A1
The subprime mortgage crisis is poised to get much worse.
Next year, interest rates are set to rise -- or "reset" -- on $362 billion worth of adjustable-rate subprime mortgages, according to data calculated by Bank of America Corp.
While many accounts portray resetting rates as the big factor behind the surge in home-loan defaults and foreclosures this year, that isn't quite the case. Many of the subprime mortgages that have driven up the default rate went bad in their first year or so, well before their interest rate had a chance to go higher. Some of these mortgages went to speculators who planned to flip their houses, others to borrowers who had stretched too far to make their payments, and still others had some element of fraud.
Now the real crest of the reset wave is coming, and that promises more pain for borrowers, lenders and Wall Street. Already, many subprime lenders, who focused on people with poor credit, have gone bust. Big banks and investors who made subprime loans or bought securities backed by them are reporting billions of dollars in losses.
The reset peak will likely add to political pressure to help borrowers who can't afford to pay the higher interest rates. The housing slowdown is emerging as an issue in both the presidential and congressional races for 2008, and the Bush administration is pushing lenders to loosen terms and keep people from losing their homes.
Banc of America Securities, a unit of the big Charlotte, N.C., bank, estimates that $85 billion in subprime mortgages are resetting during the current quarter, and the same amount will reset in the first quarter of 2008. That will rise to a peak of $101 billion in the second quarter. The estimates include loans packaged into securities and held in bank portfolios.
Larry Litton Jr., chief executive of Litton Loan Servicing, says resetting of adjustable-rate mortgages, or ARMs, has recently emerged as a bigger driver of defaults. "The initial wave was largely driven by a higher frequency of fraudulent loans...and loose underwriting," says Mr. Litton, whose company services 340,000 loans nationwide. "A much larger percentage of the defaults we're seeing right now are the result of ARM resets."
More than half of the subprime delinquencies and foreclosures this year involved loans that hadn't yet reset, and thus were due to factors such as weak underwriting and falling home prices, according to Rod Dubitsky, an analyst with Credit Suisse.
The majority of subprime ARMs due to reset next year are so-called 2-28 loans, which carry a fixed rate for two years, then adjust annually thereafter. In a speech earlier this month, Federal Reserve Governor Randall Kroszner explained how a typical 2-28 subprime loan issued in early 2007 might work. He said the interest rate on the loan would start at 7%, then jump to 9.5% after two years. For a typical borrower, that would add $350 to the monthly payment.
Besides the $362 billion of subprime ARMs that are scheduled to reset during 2008, $152 billion of other loans with adjustable rates are set to reset, according to Banc of America Securities. The other resetting loans include "jumbo" mortgages of more than $417,000 and Alt-A loans, a category between prime and subprime. The latter category is the riskier, in part because it includes borrowers who provided little or no documentation of their income or assets.
The number of borrowers facing higher payments isn't growing merely because the amount of loans with resets is higher. Another factor is that those with a looming reset now have a tougher time sidestepping it by refinancing or selling their home. "There is a large amount of borrowers who are in products that either no longer exist or that they no longer qualify for," says Banc of America Securities analyst Robert Lacoursiere.
Falling home prices mean that many borrowers have little or no equity in their home, making it tougher for them to get out from under their loans.
Treasury Secretary Henry Paulson and the chairman of the Federal Deposit Insurance Corp., Sheila Bair, have been pressing lenders to modify terms in a sweeping way, rather than going through a time-consuming case-by-case evaluation that could end up pushing many people into foreclosure. Officials at the Federal Reserve and in the Bush administration have estimated that 150,000 mortgages are resetting a month.
Ms. Bair has proposed that mortgage companies freeze the interest rates on some two million mortgages at the rate before the reset to help borrowers avoid trouble. "Keep it at the starter rate," Ms. Bair said at conference last month. "Convert it into a fixed rate. Make it permanent. And get on with it."
Picking up on that theme, California Governor Arnold Schwarzenegger in the past week announced an agreement with four major loan servicers, including Countrywide Financial Corp., the nation's biggest mortgage lender, to freeze the interest rates on certain ARMs that are resetting. The freeze would be temporary, rather than for the life of the loan. The program is aimed at borrowers who are living in their homes and making their mortgage payments on time, but aren't expected to be able to make the higher payments after reset.
The mortgage industry opposes a blanket move to modify loans that are resetting, says Doug Duncan, chief economist of the Mortgage Bankers Association. While modification may make sense in some cases, he says, it may also simply postpone the inevitable or reward borrowers who didn't manage their finances wisely. Mr. Duncan says the industry is working with government officials and consumer groups to develop principles that could be used to determine quickly who qualifies for a modified loan.
The political efforts are aimed at keeping the U.S. economy out of a housing-triggered recession. The Mortgage Bankers Association estimates that 1.35 million homes will enter the foreclosure process this year and another 1.44 million in 2008, up from 705,000 in 2005.
The projected supply of foreclosed homes is equal to about 45% of existing home sales and could add four months to the supply of existing homes, says Dale Westhoff, a senior managing director at Bear Stearns. This is a "fundamental shift" in the housing supply, says Mr. Westhoff, who believes that home prices will drop further as lenders "mark to market" repossessed homes.
Foreclosed homes typically sell at a discount of 20% to 25% compared to the sale of an owner-occupied home, analysts say. Lenders are eager to unload the properties, and the homes tend to be in poorer condition.
"People didn't leave the house happily," says Jason Bosch, a broker with Home Center Realty in Norco, Calif. "There are often signs of that. There's used, dirty carpet. The grass is dead." Mr. Bosch says he now has about 120 bank-owned properties for sale or in escrow compared with none a year ago.
Federal Reserve Chairman Ben Bernanke told Congress earlier this month, "A sharp increase in foreclosed properties for sale could...weaken the already struggling housing market and thus, potentially, the broader economy."
The big concern is a vicious cycle in which foreclosures push down home prices, making it more difficult for borrowers to refinance and causing more defaults and foreclosures.
Real-estate agents, who look at prices for comparable homes, or comps, say the sale of bank-owned properties can have a big impact. "One month the comps are showing one price and then a bank comes in and sells a property for $30,000 less," says Randal Gibson, a real-estate agent in Henderson, Nev. "All of the sudden, that's the new comp. It hurts everyone in the neighborhood."
Write to Ruth Simon at email@example.com
North American Union 'a couple years away'
Bilderberg author who 1st exposed plot in 1996 sees EU replication as imminent
Posted: November 19, 2007
10:00 p.m. Eastern
© 2007 WorldNetDaily.com
"I would say [it's just] a couple of years away," reports Daniel Estulin, author of "The True Story of the Bilderberg Group." Estulin, a Canadian now living in Europe, says the original plans for a North American Union involved the U.S. and Canada as the prime participants. It was motivated primarily by the desire to harvest Canada's abundant natural resources. In his new book, Estulin reveals the first efforts in this plan date back to 1996 when the elite Bilderberg Group first discussed plans for the dismantlement of Canada as an independent nation and proposed its merger – minus Quebec – with the United States into a Greater North America. "Actually, the North American Union, or rather a Canada-U.S. merger, was initially discussed shortly after the Reagan-Bush candidacy won the White House," he says in an interview with WND. "Upon taking over the reins of the country, George Bush and Ronald Reagan called in the presidents of the key trans-national companies and asked them for the real picture. The money people told them that if the United States were a corporation it would have to be shut down immediately. It was bankrupt." The solution proposed then, according to Estulin, was merger between the U.S. and Canada. "Canada is virgin country with a multitude of natural resources, water, mines, oil, gas, etc.," he explains. "They decided that it was going to take 14 or 15 years to put the whole project together. In the interval, the economies, social programs and laws of the two countries would be quietly harmonized as much as possible." Back then, part of that harmonization plan involved the separation of Quebec as an independent state, he says. "Actually, when all is said and done, it all comes down to money," Estulin says. "Money makes its own rules. If your goal is to make the most money possible using Canada's natural resources, what would you ask for? Number one, give me control over the sun. Number two, give me control over the air. Number three, give me control over water. Now, we know we cannot control the sun, nor can we control the air. But we can control water. Water, after all, is the most important element that can be controlled." But the plot for a North American Union, as exposed in detail in Jerome Corsi's new bestselling book, "The Late Great USA," is but a prelude, Estulin says, to the ultimate merger – one-world government. "Everything is in place," he says. "Europe is now one country, one currency and one constitution. North America is about to become one. The African Union has had its working model going for over a decade. Asia is openly discussing the near-future Asian Union, being sold to us as an economic inevitability beneficial to all its citizens." Estulin sees the current focus in the U.S. on the presidential election of 2008 as something of a farce in light of this trend. "Does it really matter who wins?" he asks. "As I make very clear in 'The True Story of the Bilderberg Group,' every politician of note and promise belongs to the Bilderbergers, CFR (Council on Foreign Relations) or the Trilateral Commission. Unless you are one of them, you can hardly hope to win the presidency. If we vote for the lesser evil, forced upon us by the secret oligarchies and the powerful men behind the curtain, we end up playing the game imposed upon us by them. Democracy, I guess what I really want to say, is a fallacy, an unattainable dream, a useless label trotted out and dusted off by the rulers every four years for the benefit of the great unwashed – us. There are two sides in this equation – the powerful elite who control the world's wealth and the rest of humanity." Estulin "guarantees" today's Republican front-runner Rudy Giuliani will not get the nomination of his party. With less certitude, he speculates the current mayor of New York, Michael Bloomberg, could still be positioned to head the GOP ticket. "Bloomberg, according to my sources within Bilderberg, will emerge as a credible candidate of consensus for the discredited American political establishment, your virtual "People's Choice" candidate," he says. What is the agenda behind these groups, which Estulin says are comprised of "self-interested elitists protecting their wealth and the investments of multinational banks and corporations in the growing world economy at the expense of developing nations and Third World countries"? "The policies they develop," he writes, "benefit them as well as move us towards a one-world government." Those questioning Estulin's conclusion as mere speculation need only recall organizational financer David Rockefeller's own words as recorded in his "Memoirs." "Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as 'internationalists' and conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will," he wrote. "If that's the charge, I stand guilty, and I am proud of it." Estulin's book, first written in 2005 in Spain, has been translated into 24 languages, most recently this English edition. He has covered the Bilderberg Group as a journalist for more than 15 years. Why does he singularly devote so much attention to exposing their activities? "They cannot survive the light, and they know it," he says. "This is why the powerful people have long insulated themselves from that possibility. You see, the greatest form of control is when you think you are free while you are being manipulated and dictated to. People have been disarmed through the greatest hypnotist the world has ever known – the oblong box almost everyone has in the corner of their living rooms known as the television. By persuading ordinary people that what they can see with their eyes is what is there to see, the men behind the curtain have ensured their own survival, because people will laugh in your face when you explain to them that there is a bigger picture they are not seeing." What is his personal prescription for fighting back? He offers a five-point program: 2. Understanding that corporate media's main job is to hide the transgressions of the most powerful people in the world not shine the light of truth on it. 3. Understanding that the corporate media forms part of the world's elite societies such as the Bilderbergers, the CFR and the Trilateral Commission. 4. Understanding how money works and how through intelligent use of money we can destroy the Bilderbergers of this world. 5. Getting out of debt now.
1. Understanding that governments do not represent the people nor have their best interests at heart.
"I would say [it's just] a couple of years away," reports Daniel Estulin, author of "The True Story of the Bilderberg Group."
Estulin, a Canadian now living in Europe, says the original plans for a North American Union involved the U.S. and Canada as the prime participants. It was motivated primarily by the desire to harvest Canada's abundant natural resources.
In his new book, Estulin reveals the first efforts in this plan date back to 1996 when the elite Bilderberg Group first discussed plans for the dismantlement of Canada as an independent nation and proposed its merger – minus Quebec – with the United States into a Greater North America.
"Actually, the North American Union, or rather a Canada-U.S. merger, was initially discussed shortly after the Reagan-Bush candidacy won the White House," he says in an interview with WND. "Upon taking over the reins of the country, George Bush and Ronald Reagan called in the presidents of the key trans-national companies and asked them for the real picture. The money people told them that if the United States were a corporation it would have to be shut down immediately. It was bankrupt."
The solution proposed then, according to Estulin, was merger between the U.S. and Canada.
"Canada is virgin country with a multitude of natural resources, water, mines, oil, gas, etc.," he explains. "They decided that it was going to take 14 or 15 years to put the whole project together. In the interval, the economies, social programs and laws of the two countries would be quietly harmonized as much as possible."
Back then, part of that harmonization plan involved the separation of Quebec as an independent state, he says.
"Actually, when all is said and done, it all comes down to money," Estulin says. "Money makes its own rules. If your goal is to make the most money possible using Canada's natural resources, what would you ask for? Number one, give me control over the sun. Number two, give me control over the air. Number three, give me control over water. Now, we know we cannot control the sun, nor can we control the air. But we can control water. Water, after all, is the most important element that can be controlled."
But the plot for a North American Union, as exposed in detail in Jerome Corsi's new bestselling book, "The Late Great USA," is but a prelude, Estulin says, to the ultimate merger – one-world government.
"Everything is in place," he says. "Europe is now one country, one currency and one constitution. North America is about to become one. The African Union has had its working model going for over a decade. Asia is openly discussing the near-future Asian Union, being sold to us as an economic inevitability beneficial to all its citizens."
Estulin sees the current focus in the U.S. on the presidential election of 2008 as something of a farce in light of this trend.
"Does it really matter who wins?" he asks. "As I make very clear in 'The True Story of the Bilderberg Group,' every politician of note and promise belongs to the Bilderbergers, CFR (Council on Foreign Relations) or the Trilateral Commission. Unless you are one of them, you can hardly hope to win the presidency. If we vote for the lesser evil, forced upon us by the secret oligarchies and the powerful men behind the curtain, we end up playing the game imposed upon us by them. Democracy, I guess what I really want to say, is a fallacy, an unattainable dream, a useless label trotted out and dusted off by the rulers every four years for the benefit of the great unwashed – us. There are two sides in this equation – the powerful elite who control the world's wealth and the rest of humanity."
Estulin "guarantees" today's Republican front-runner Rudy Giuliani will not get the nomination of his party. With less certitude, he speculates the current mayor of New York, Michael Bloomberg, could still be positioned to head the GOP ticket.
"Bloomberg, according to my sources within Bilderberg, will emerge as a credible candidate of consensus for the discredited American political establishment, your virtual "People's Choice" candidate," he says.
What is the agenda behind these groups, which Estulin says are comprised of "self-interested elitists protecting their wealth and the investments of multinational banks and corporations in the growing world economy at the expense of developing nations and Third World countries"?
"The policies they develop," he writes, "benefit them as well as move us towards a one-world government."
Those questioning Estulin's conclusion as mere speculation need only recall organizational financer David Rockefeller's own words as recorded in his "Memoirs."
"Some even believe we are part of a secret cabal working against the best interests of the United States, characterizing my family and me as 'internationalists' and conspiring with others around the world to build a more integrated global political and economic structure – one world, if you will," he wrote. "If that's the charge, I stand guilty, and I am proud of it."
Estulin's book, first written in 2005 in Spain, has been translated into 24 languages, most recently this English edition. He has covered the Bilderberg Group as a journalist for more than 15 years.
Why does he singularly devote so much attention to exposing their activities?
"They cannot survive the light, and they know it," he says. "This is why the powerful people have long insulated themselves from that possibility. You see, the greatest form of control is when you think you are free while you are being manipulated and dictated to. People have been disarmed through the greatest hypnotist the world has ever known – the oblong box almost everyone has in the corner of their living rooms known as the television. By persuading ordinary people that what they can see with their eyes is what is there to see, the men behind the curtain have ensured their own survival, because people will laugh in your face when you explain to them that there is a bigger picture they are not seeing."
What is his personal prescription for fighting back? He offers a five-point program:
2. Understanding that corporate media's main job is to hide the transgressions of the most powerful people in the world not shine the light of truth on it.
3. Understanding that the corporate media forms part of the world's elite societies such as the Bilderbergers, the CFR and the Trilateral Commission.
4. Understanding how money works and how through intelligent use of money we can destroy the Bilderbergers of this world.
5. Getting out of debt now.
By Mike Whitney
Knowing the known unknowns of a possible market disaster
November 24, 2007
Satyajit Das is not the sort of person you want to meet after a really bad day in the markets. The renowned derivatives expert has such a gloomy outlook on the state of the world's financial system that you might have to be kept away from sharp objects after he leaves the room.
"I think this crisis has a long way to run," the globetrotting Mr. Das said yesterday from London. "It is an extra-innings baseball game and the national anthem still hasn't finished playing. So we really don't know what the worst is."
Unlike some permabears who see a dark lining to every silver cloud and who have waited vainly for years for what they are convinced will be the mother of all market crashes, Mr. Das backs up his concerns with an impressive track record as a banker, trader, corporate treasurer and risk consultant.
No one is better at explaining the opaque world of what he calls "supersized" leverage stemming from the slicing and dicing of risk and the vast expansion of credit derivatives, which now total $516-trillion (U.S.), accounting for an amazing 75 per cent of the world's liquidity.
Monday, November 19, 2007
Books: Vietnam-era GI lighters tracked changing attitudes toward war
Given the countless lungs healed, lives rescued and dollars saved in today’s post-tobacco America — when cigarette companies have shrunk from their former ubiquity and smokers are pariahs — maybe it’s crass to be wistful about America’s smoking years.
But as smoking evaporates, a system of etiquette and equipment is disappearing with it. High school boys no longer practice flipping up a pack of cigarettes so that one pops out to offer a girl. Except for at Halloween and on “Breakfast at Tiffany’s” posters, no one has seen a cigarette holder for 20 years. And today, seldom heard is the distinctive metal “clink” of someone flicking open a Zippo lighter.
The iconic lighter, which turns 75 this year, once epitomized cool. (Many are the hours I have spent practicing how to open a Zippo with a deft arm movement, and then, with another, light it on my pants leg.)
The Zippo Manufacturing Co., of Bradford, Pa., says it has sold 450 million lighters since it began production in 1932, and many of those have gone to military smokers. In World War II, the company’s entire line went straight to soldiers, sailors and Marines overseas. The legendary war correspondent Ernie Pyle cemented the Zippo’s reputation among service members in his column:
“If I were to tell you how much these Zippos are coveted at the front and the gratitude and delight with which the boys receive them, you would probably accuse me of exaggeration. I truly believe that the Zippo lighter is the most coveted thing in the Army,” he wrote. The company still uses that endorsement in its promotional materials.
The Zippo has a devoted following among service members for several reasons: The lighters are tough — there are many stories of them stopping bullets or shrapnel and thus saving their owners’ lives — so they can withstand a front-line pounding. They light and stay lit in almost any weather condition. And they double as tiny metal billboards that display the name of your sports team, your unit emblem or a custom message you see every time you break for a smoke.
Hundreds of those custom messages are on display in “Vietnam Zippos,” a lavishly illustrated book by Sherry Buchanan about the lighter collection of artist Bradford Edwards. The book collects hundreds of photographs of scratched, nicked, beaten, burned and pockmarked Zippos carried by American servicemen in Vietnam. The book’s release wasn’t planned to coincide with the Zippo’s anniversary, its publisher said, and is unauthorized by Zippo Manufacturing.
A Zippo could be purchased for $1.80 from any post exchange in Vietnam, Buchanan writes, and there were sidewalk stalls everywhere that would engrave them for a few cents. As waves of draftees landed in Vietnam and geared up before heading out to “Indian Country,” they created a subgenre of battlefield art that has probably never been collected as thoroughly or presented as elegantly as in “Vietnam Zippos.”
The customized Zippos were so common that Americans thought nothing of leaving thousands of them in the Vietnamese countryside; when tourists in Saigon began buying them as souvenirs in open-air markets, Buchanan writes, the demand brought more and more out into the open.
The book uses the grunts’ battered lighters to track American sensibilities about the war; early on, soldiers and Marines scratched gung-ho slogans and their unit names into their lighters. As the war dragged on, they began to carve philosophical musings into the metal, and then even peace signs.
A popular early slogan was “Yea though I walk through the valley of the shadow of death, I fear no evil for I’m the evilest son of a bitch in the valley.” A popular later slogan was “We the unwilling led by the unqualified to kill the unfortunate die for the ungrateful.” Another was “Why me?”
(Many of the images and slogans on the Zippos are obscene, vulgar and hilarious, but unprintable in a family newspaper. It’s worth reading “Vietnam Zippos” just to explore grunts’ inventiveness in using a certain well-worn expletive.)
Buchanan and Edwards write that Vietnam changed the image of the little lighter from a World War II icon of home to an instrument of death: A signal moment for Buchanan was the famous 1965 TV report by Morley Safer of CBS News that showed a squad of Marines touching their Zippos to huts in a Vietnamese village.
Missions such as these (aka “Zippo raids”) broadened the way troops used the term “Zippo,” Buchanan writes. Marines’ backpack flamethrowers and flame tanks became “Zippos”; if you were told to “Zippo that hooch,” you burned it down.
Fans of “Apocalypse Now” will find many parallels in the stories and lighter engravings in the book: Many Airborne unit Zippos were emblazoned with “Death from Above,” which viewers will remember was painted on the nose of Col. Bill Killgore’s UH-1 Huey. Killgore, played by Robert Duvall, is the Army commander who seizes a Viet Cong-controlled beach to go surfing after he meets Lance, a Navy boat crewman who is a famous surfer. Edwards tells a wonderful story that begins with him finding a lighter in a Saigon market with the slogan “You can surf later.”
“There was not that many surfers, even in California, in the Sixties, and few of them, if any, volunteered for the military. It is generally accepted that the majority in that small and dedicated surfing subculture went to great lengths to avoid conscription. Yet here in my hand was a bizarre example of life imitating art imitating life — the Zippo had belonged to a real-life version of Lance.”
The lighters in “Vietnam Zippos” tell hundreds of stories like “Lance’s,” and each one makes the book worth reading.
Vietnam Zippos By Sherry Buchanan. The University of Chicago Press. $25.
In a report dated November 15, Goldman's chief
But unlike stock market losses, which are typically absorbed by "long-only" investors, this mortgage-related hit is mostly borne by leveraged investors such as banks, broker-dealers, hedge funds and government-sponsored enterprises.
And leveraged investors react to losses by actively cutting back lending to keep capital ratios from falling -- A bank targeting a constant capital ratio of 10 percent, for example, would need to shrink its balance by $10 for every $1 in losses.
"The macroeconomic consequences could be quite dramatic," Hatzius said in the note to clients. "If leveraged investors see $200 billion of the $400 billion aggregate credit loss, they might need to scale back their lending by $2 trillion."
"This is a large shock," he said, adding the number equates to 7 percent of total debt owed by
Hatzius said such a shock could produce a "substantial recession" if it occurred over one year, or a long period of sluggish growth if it occurred over two-to-four years.
One of a number of caveats outlined in the report was that baseline economic forecasts may already include significant reductions in the pace of mortgage lending.
But the conclusion remained a gloomy one regardless.
"The likely mortgage credit losses pose a significantly bigger macroeconomic risk than generally recognized," he wrote. "While the uncertainty is large, the associated downward pressure on lending raises the risk of significant weakness in economic activity."
(Reporting by Mike Dolan, editing by Mike Peacock)
Sunday, November 18, 2007
Last Update: 10:54 PM ET Nov 18, 2007
HONG KONG (MarketWatch) -- The money flowing from China into global equity markets could tally as much as $246 billion next year, with markets in Hong Kong and South Korea expected to benefit the most, according to HSBC Global Research.
"The great wall of Chinese money could be about to arrive," HSBC strategist Garry Evans wrote in a research report Friday.
HSBC says it reached the $246 billion figure using a formula that assumes
Chinese authorities have approved about $40 billion in outflows under the government's qualified domestic institutional investor scheme, comprising allocations granted to banks, mutual funds and insurance companies, HSBC wrote in the report. About $20 billion of those funds have been invested so far, mostly in
To manage the value of its currency,
HSBC said that next year Chinese authorities will likely approve $10 billion in overseas investments to mutual funds each month, while $67 billion will be invested through
Investment in the former British colony should taper off around that mark because of
Some of the remaining $153 billion will head in to
"There are cultural affinities between
Other beneficiaries are likely to include Chinese stocks listed on exchanges such as
Foreign stocks benefiting from Chinese growth in an indirect way, such as Singaporean property group CapitaLand Ltd. and Australian resource firms, are also expected to be targeted by mainland fund managers, the report said.
Evans said many of the
"They felt they needed more to study these markets more extensively before making any investments," Evans wrote in the report.
So far this year, foreign investors have channeled $18 billion into Indian equities, $6 billion into Taiwanese stocks, $3 billion into
Chris Oliver is MarketWatch's Asia bureau chief, based in
11/18/07 "The Nation" --- - This past May, in an unheralded and almost unnoticed move, the Energy Department signaled a fundamental, near epochal shift in US and indeed world history: we are nearing the end of the Petroleum Age and have entered the Age of Insufficiency. The department stopped talking about "oil" in its projections of future petroleum availability and began speaking of "liquids." The global output of "liquids," the department indicated, would rise from 84 million barrels of oil equivalent (mboe) per day in 2005 to a projected 117.7 mboe in 2030 -- barely enough to satisfy anticipated world demand of 117.6 mboe. Aside from suggesting the degree to which oil companies have ceased being mere suppliers of petroleum and are now purveyors of a wide variety of liquid products -- including synthetic fuels derived from natural gas, corn, coal and other substances -- this change hints at something more fundamental: we have entered a new era of intensified energy competition and growing reliance on the use of force to protect overseas sources of petroleum.
To appreciate the nature of the change, it is useful to probe a bit deeper into the Energy Department's curious terminology. "Liquids," the department explains in its International Energy Outlook for 2007, encompasses "conventional" petroleum as well as "unconventional" liquids -- notably tar sands (bitumen), oil shale, biofuels, coal-to-liquids and gas-to-liquids. Once a relatively insignificant component of the energy business, these fuels have come to assume much greater importance as the output of conventional petroleum has faltered. Indeed, the Energy Department projects that unconventional liquids production will jump from a mere 2.4 mboe per day in 2005 to 10.5 in 2030, a fourfold increase. But the real story is not the impressive growth in unconventional fuels but the stagnation in conventional oil output. Looked at from this perspective, it is hard to escape the conclusion that the switch from "oil" to "liquids" in the department's terminology is a not so subtle attempt to disguise the fact that worldwide oil production is at or near its peak capacity and that we can soon expect a downturn in the global availability of conventional petroleum.
Petroleum is, of course, a finite substance, and geologists have long warned of its ultimate disappearance. The extraction of oil, like that of other nonrenewable resources, will follow a parabolic curve over time. Production rises quickly at first and then gradually slows until approximately half the original supply has been exhausted; at that point, a peak in sustainable output is attained and production begins an irreversible decline until it becomes too expensive to lift what little remains. Most oil geologists believe we have already reached the midway point in the depletion of the world's original petroleum inheritance and so are nearing a peak in global output; the only real debate is over how close we have come to that point, with some experts claiming we are at the peak now and others saying it is still a few years or maybe a decade away.
Until very recently, Energy Department analysts were firmly in the camp of those wild-eyed optimists who claimed that peak oil was so far in the future that we didn't really need to give it much thought. Putting aside the science of the matter, the promulgation of such a rose-colored view obviated any need to advocate improvements in automobile fuel efficiency or to accelerate progress on the development of alternative fuels. Given White House priorities, it is hardly surprising that this view prevailed in Washington.
In just the past six months, however, the signs of an imminent peak in conventional oil production have become impossible even for conservative industry analysts to ignore. These have come from the take-no-prisoners world of oil pricing and deal-making, on the one hand, and the analysis of international energy experts, on the other.
Most dramatic, perhaps, has been the spectacular rise in oil prices. The price of light, sweet crude crossed the longstanding psychological barrier of $80 per barrel on the New York Mercantile Exchange for the first time in September, and has since risen to as high as $90. Many reasons have been cited for the rise in crude prices, including unrest in Nigeria's oil-producing Delta region, pipeline sabotage in Mexico, increased hurricane activity in the Gulf of Mexico and fears of Turkish attacks on Kurdish guerrilla sanctuaries in Iraq. But the underlying reality is that most oil-producing countries are pumping at maximum capacity and finding it increasingly difficult to boost production in the face of rising international demand.
Even a decision by the Organization of the Petroleum Exporting Countries (OPEC) to boost production by 500,000 barrels per day failed to halt the upward momentum in prices. Concerned that an excessive rise in oil costs would trigger a worldwide recession and lower demand for their products, the OPEC countries agreed to increase their combined output at a meeting in Vienna on September 11. "We think that the market is a little bit high," explained Kuwait's acting oil minister, Mohammad al-Olaim. But the move did little to slow the rise in prices. Clearly, OPEC would have to undertake a much larger production increase to alter the market environment, and it is not at all clear that its members possess the capacity to do that -- now or in the future.
A warning sign of another sort was provided by Kazakhstan's August decision to suspend development of the giant Kashagan oil region in its sector of the Caspian Sea, first initiated by a consortium of Western firms in the late '90s. Kashagan was said to be the most promising oil project since the discovery of oil in Alaska's Prudhoe Bay in the late '60s. But the enterprise has encountered enormous technical problems and has yet to produce a barrel of oil. Frustrated by a failure to see any economic benefits from the project, the Kazakh government has cited environmental risks and cost overruns to justify suspending operations and demanding a greater say in the project.
Like the dramatic rise in oil prices, the Kashagan episode is an indication of the oil industry's growing difficulties in its efforts to boost production in the face of rising demand. "All the oil companies are struggling to grow production," Peter Hitchens of Teather & Greenwood brokerage told the Wall Street Journal in July. "It's becoming more and more difficult to bring projects in on time and on budget."
That this industry debilitation is not a temporary problem but symptomatic of a long-term trend was confirmed in two important studies published this past summer by conservative industry organizations.
The first of these was released July 9 by the International Energy Agency (IEA), an affiliate of the Organization for Economic Cooperation and Development, the club of major industrial powers. Titled Medium-Term Oil Market Report, it is a blunt assessment of the global supply-and-demand equation over the 2007-12 period. The news is not good.
Predicting that world economic activity will grow by an average of 4.5 percent per year during this period -- much of it driven by unbridled growth in China, India and the Middle East -- the report concludes that global oil demand will rise by 2.2 percent per year, pushing world oil consumption from approximately 86 million barrels per day in 2007 to 96 million in 2012. With luck and massive new investment, the oil industry will be able to increase output sufficiently to satisfy the higher level of demand anticipated for 2012 -- barely. Beyond that, however, there appears little likelihood that the industry will be able to sustain any increase in demand. "Oil look[s] extremely tight in five years' time," the agency declared.
Underlying the report's general conclusion are a number of specific concerns. Most notably, it points to a worrisome decline in the yield of older fields in non-OPEC countries and a corresponding need for increased output from the OPEC countries, most of which are located in conflict-prone areas of the Middle East and Africa. The numbers involved are staggering. At first blush, it would seem that the need for an extra 10 million barrels per day between now and 2012 would translate into an added 2 million barrels per day in each of the next five years -- a conceivably attainable goal. But that doesn't take into account the decline of older fields. According to the report, the world actually needs an extra 5 million: 3 million to make up for the decline in older fields plus the 2 million in added requirements. This is a daunting and possibly insurmountable challenge, especially when one considers that almost all of the additional petroleum will have to come from Iran, Iraq, Kuwait, Saudi Arabia, Algeria, Angola, Libya, Nigeria, Sudan, Kazakhstan and Venezuela -- countries that do not inspire the sort of investor confidence that will be needed to pour hundreds of billions of dollars into new drilling rigs, pipelines and other essential infrastructure.
Similar causes for anxiety can be found in the second major study released last summer, Facing the Hard Truths About Energy, prepared by the National Petroleum Council, a major industry organization. Because it supposedly provided a "balanced" view of the nation's energy dilemma, the NPC report was widely praised on Capitol Hill and in the media; adding to its luster was the identity of its chief author, former ExxonMobil CEO Lee Raymond.
Like the IEA report, the NPC study starts with the claim that, with the right mix of policies and higher investment, the industry is capable of satisfying US and international oil and natural gas demand. "Fortunately, the world is not running out of energy resources," the report bravely asserts. But obstacles to the development and delivery of these resources abound, so prudent policies and practices are urgently required. Although "there is no single, easy solution to the multiple challenges we face," the authors conclude, they are "confident that the prompt adoption of these strategies" will allow the United States to satisfy its long-term energy needs.
Read further into the report, however, and serious doubts emerge. Here again, worries arise from the growing difficulties of extracting oil and gas from less-favorable locations and the geopolitical risks associated with increased reliance on unfriendly and unstable suppliers. According to the NPC (using data acquired from the IEA), an estimated $20 trillion in new infrastructure will be needed over the next twenty-five years to ensure that sufficient energy is available to satisfy anticipated worldwide demand.
The report then states the obvious: "A stable and attractive investment climate will be necessary to attract adequate capital for evolution and expansion of the energy infrastructure." This is where any astute observer should begin to get truly alarmed, for, as the study notes, no such climate can be expected. As the center of gravity of world oil production shifts decisively to OPEC suppliers and state-centric energy producers like Russia, geopolitical rather than market factors will come to dominate the marketplace.
"These shifts pose profound implications for U.S. interests, strategies, and policy-making," the NPC report states. "Many of the expected changes could heighten risks to U.S. energy security in a world where U.S. influence is likely to decline as economic power shifts to other nations. In years to come, security threats to the world's main sources of oil and natural gas may worsen."
The implications are obvious: major investors are not likely to cough up the trillions of dollars needed to substantially boost production in the years ahead, suggesting that the global output of conventional petroleum will not reach the elevated levels predicted by the Energy Department but will soon begin an irreversible decline.
This conclusion leads to two obvious strategic impulses: first, the government will seek to ease the qualms of major energy investors by promising to protect their overseas investments through the deployment of American military forces; and second, the industry will seek to hedge its bets by shifting an ever-increasing share of its investment funds into the development of nonpetroleum liquids.
The New 'Washington Consensus'
The need for a vigorous US military role in protecting energy assets abroad has been a major theme in American foreign policy since 1945, when President Roosevelt met with King Abdul Aziz of Saudi Arabia and promised to protect the kingdom in return for privileged access to Saudi oil.
In the most famous expression of this linkage, President Carter affirmed in January 1980 that the unimpeded flow of Persian Gulf oil is among this country's vital interests and that to protect this interest, the United States will employ "any means necessary, including military force." This principle was later cited by President Reagan as the rationale for "reflagging" Kuwaiti oil tankers with the American ensign during the Iran-Iraq War of 1980-88 and protecting them with US warships -- a stance that led to sporadic clashes with Iran. The same principle was subsequently invoked by George H.W. Bush as a justification for the Gulf War of 1991.
In considering these past events, it is important to recognize that the use of military force to protect the flow of imported petroleum has generally enjoyed broad bipartisan support in Washington. Initially, this bipartisan outlook was largely focused on the Persian Gulf area, but since 1990, it has been extended to other areas as well. President Clinton eagerly pursued close military ties with the Caspian Sea oil states of Azerbaijan and Kazakhstan after the breakup of the USSR in 1991, while George W. Bush has avidly sought an increased US military presence in Africa's oil-producing regions, going so far as to favor the establishment of a US Africa Command (Africom) in February.
One might imagine that the current debacle in Iraq would shake this consensus, but there is no evidence that this is so. In fact, the opposite appears to be the case: possibly fearful that the chaos in Iraq will spread to other countries in the Gulf region, senior figures in both parties are calling for a reinvigorated US military role in the protection of foreign energy deliveries.
Perhaps the most explicit expression of this elite consensus is an independent task force report, National Security Consequences of U.S. Oil Dependency, backed by many prominent Democrats and Republicans. It was released by the bipartisan Council on Foreign Relations (CFR), co-chaired by John Deutch, deputy secretary of defense in the Clinton Administration, and James Schlesinger, defense secretary in the Nixon and Ford administrations, in October 2006. The report warns of mounting perils to the safe flow of foreign oil. Concluding that the United States alone has the capacity to protect the global oil trade against the threat of violent obstruction, it argues the need for a strong US military presence in key producing areas and in the sea lanes that carry foreign oil to American shores.
An awareness of this new "Washington consensus" on the need to protect overseas oil supplies with American troops helps explain many recent developments in Washington. Most significant, it illuminates the strategic stance adopted by President Bush in justifying his determination to retain a potent US force in Iraq -- and why the Democrats have found it so difficult to contest that stance.
Consider Bush's September 13 prime-time speech on Iraq. "If we were to be driven out of Iraq," he prophesied, "extremists of all strains would be emboldened.... Iran would benefit from the chaos and would be encouraged in its efforts to gain nuclear weapons and dominate the region. Extremists could control a key part of the global energy supply." And then came the kicker: "Whatever political party you belong to, whatever your position on Iraq, we should be able to agree that America has a vital interest in preventing chaos and providing hope in the Middle East." In other words, Iraq is no longer about democracy or WMDs or terrorism but about maintaining regional stability to ensure the safe flow of petroleum and keep the American economy on an even keel; it was almost as if he was speaking to the bipartisan crowd that backed the CFR report cited above.
It is very clear that the Democrats, or at least mainstream Democrats, are finding it exceedingly difficult to contest this argument head-on. In March, for example, Senator Hillary Clinton told the New York Times that Iraq is "right in the heart of the oil region" and so "it is directly in opposition to our interests" for it to become a failed state or a pawn of Iran. This means, she continued, that it will be necessary to keep some US troops in Iraq indefinitely, to provide logistical and training support to the Iraqi military. Senator Barack Obama has also spoken of the need to maintain a robust US military presence in Iraq and the surrounding area. Thus, while calling for the withdrawal of most US combat brigades from Iraq proper, he has championed an "over-the-horizon force that could prevent chaos in the wider region."
Given this perspective, it is very hard for mainstream Democrats to challenge Bush when he says that an "enduring" US military presence is needed in Iraq or to change the Administration's current policy, barring a major military setback or some other unforeseen event. By the same token, it will be hard for the Democrats to avert a US attack on Iran if this can be portrayed as a necessary move to prevent Tehran from threatening the long-term safety of Persian Gulf oil supplies.
Nor can we anticipate a dramatic change in US policy in the Gulf region from the next administration, whether Democratic or Republican. If anything, we should expect an increase in the use of military force to protect the overseas flow of oil, as the threat level rises along with the need for new investment to avert even further reductions in global supplies.
The Rush to Alternative Liquids
Although determined to keep expanding the supply of conventional petroleum for as long as possible, government and industry officials are aware that at some point these efforts will prove increasingly ineffective. They also know that public pressure to reduce carbon dioxide emissions -- thus slowing the accumulation of climate-changing greenhouse gases -- and to avoid exposure to conflict in the Middle East is sure to increase in the years ahead. Accordingly, they are placing greater emphasis on the development of oil alternatives that can be procured at home or in neighboring Canada.
The new emphasis was first given national attention in Bush's latest State of the Union address. Stressing energy independence and the need to modernize fuel economy standards, he announced an ambitious plan to increase domestic production of ethanol and other biofuels. The Administration appears to favor several types of petroleum alternatives: ethanol derived from corn stover, switch grass and other nonfood crops (cellulosic ethanol); diesel derived largely from soybeans (biodiesel); and liquids derived from coal (coal-to-liquids), natural gas (gas-to-liquids) and oil shale. All of these methods are being tested in university laboratories and small-scale facilities, and will be applied in larger, commercial-sized ventures in coming years with support from various government agencies.
In February, for example, the Energy Department announced grants totaling $385 million for the construction of six pilot plants to manufacture cellulosic ethanol; when completed in 2012, these "biorefineries" will produce more than 130 million gallons of cellulosic ethanol per year. (The United States already produces large quantities of ethanol by cooking and fermenting corn kernels, a process that consumes vast amounts of energy and squanders a valuable food crop while supplanting only a small share of our petroleum usage; the proposed cellulosic plants would use nonfood biomass as a feedstock and consume far less energy.)
Just as eager to develop petroleum alternatives are the large energy companies, all of which have set up laboratories or divisions to explore future energy options. BP has been especially aggressive; in 2005 it established BP Alternative Energy and set aside $8 billion for this purpose. This past February the new spinoff announced a $500 million grant -- possibly the largest of its kind in history -- to the University of California, Berkeley, the University of Illinois and Lawrence Berkeley National Laboratory to establish an Energy Biosciences Institute with the aim of developing biofuels. BP said the institute "is expected to explore the application of bioscience [to] the production of new and cleaner energy, principally fuels for road transport."
Just about every large oil company is placing a heavy bet on Canadian tar sands -- a gooey substance found in Canada's Alberta province that can be converted into synthetic petroleum -- but only with enormous effort and expense. According to the Energy Department, Canadian bitumen production will rise from 1.1 mboe in 2005 to 3.6 mboe in 2030, an increase that is largely expected to be routed to the United States. Hoping to cash in on this bonanza, giant US corporations like Chevron are racing to buy up leases in the bitumen fields of northern Alberta.
But while attractive from a geopolitical perspective, extracting Canadian tar sands is environmentally destructive. It takes vast quantities of energy to recover the bitumen and convert it into a usable liquid, releasing three times as much greenhouse gases as conventional oil production; the resulting process leaves toxic water supplies and empty moonscapes in its wake. Although rarely covered in the US press, opposition in Canada to the environmental damage wreaked by these mammoth operations is growing.
Environmental factors loom large in yet another potential source of liquids being pursued by US energy firms, with strong government support: shale oil, or petroleum liquids pried from immature rock found in the Green River basin of western Colorado, eastern Utah and southern Wyoming. Government geologists claim that shale rock in the United States holds the equivalent of 2.1 trillion barrels of oil -- the same as the original world supply of conventional petroleum. However, the only way to recover this alleged treasure is to strip-mine a vast wilderness area and heat the rock to 500 degrees Celsius, creating mountains of waste material in the process. Here too, opposition is growing to this massively destructive assault on the environment. Nevertheless, Shell Oil has established a pilot plant in Rio Blanco County in western Colorado with strong support from the Bush Administration.
Life After the Peak
And so we have a portrait of the global energy situation after the peak of conventional petroleum, with troops being rushed from one oil-producing hot spot to another and a growing share of our transportation fuel being supplied by nonpetroleum liquids of one sort or another. Exactly what form this future energy equation will take cannot be foreseen with precision, but it is obvious that the arduous process will shape American policy debates, domestic and foreign, for a long time.
As this brief assessment suggests, the passing of peak oil will have profound and lasting consequences for this country, with no easy solutions. In facing this future, we must, above all, disavow any simple answers, such as energy "independence" based on the pillage of America's remaining wilderness areas or the false promise of corn-based ethanol (which can supply only a tiny fraction of our transportation requirements). It is clear, moreover, that many of the fuel alternatives proposed by the Bush Administration pose significant dangers of their own and so should be examined carefully before vast public sums are committed to their development. The safest and most morally defensible course is to repudiate any "consensus" calling for the use of force to protect overseas petroleum supplies and to strive to conserve what remains of the world's oil by using less of it.
Michael T. Klare is a professor of peace and world security studies at Hampshire College in Amherst, Mass., and the author of Blood and Oil: The Dangers and Consequences of America's Growing Petroleum Dependency