Monday, October 6, 2008
The Paulson Plan for Survivor Bias by 'London Banker'

As I re-post this from The RGE Monitor, markets are crashing in Asia, Russia, and Europe. It is clear from the conference call transcript below that market participants who are not insiders with the Bush Admin. and may not receive "survivor bias" are reacting very negatively Friday and Monday. These are certainly interesting times. Thanks to David of Kauai and RGE Monitor, or I wouldn't know what is going on.

From: http://www.rgemonitor.com/financemarkets-monitor/253850/financial_eugeni...
"Financial Eugenics: The Paulson Plan for Survivor Bias" by London Banker

"As I write this I don’t know the outcome of the attempt to ram through legislation for looting the US Treasury of $700 billion before the end of the Bush administration. I suspect that Congress will force the passage of the bill in some form because the media and political narrative on the necessity of the measure is unremitting and so horribly biased.

No alternatives will be considered.

No constraints on the unilateral executive authority of Hank Paulson will be considered.

No assurances that funds will be used to unlock credit markets or promote lending to the real economy (as opposed to the financial robber barons) will be considered.

Instead, the bill will get laden with an additional 300 pages of pork to sway the dissenters, adding to the tab imposed on the American taxpayer.

Sunday, October 5, 2008
The economist who forecasted all of this...in 2006

"The claim by the Fed and Treasury that spending $700bn of public money is the best way to recapitalise banks has absolutely no factual basis or justification. This way of recapitalising financial institutions is a total rip-off that will mostly benefit - at the huge expense of the US taxpayer - the common and preferred shareholders and even unsecured creditors of the banks." -- Nouriel Roubini, professor of economics at NYU Stern School of Business

First, for who is Dr. Nouriel Roubini, see: http://en.wikipedia.org/wiki/Nouriel_Roubini

And: "Dr. Doom" By STEPHEN MIHM August 15, 2008 New York Times

"On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac.

A quick message to let you know this important contested case docket before the Public Utilities Commission
begins tomorrow in Honolulu. At stake is Hawaiian Electric Company’s proposal to power their generators
with imported palm oil biodiesel to replace petroleum diesel. (Is that really our best choice? Do they believe that?)

I am one of a dozen witnesses called by Life of the Land to provide testimony. I encourage you to look at the volume of work done by LOL at this link: http://www.lifeofthelandhawaii.org/Biofuels_Docket.html

Life of the Land is our state’s top advocate for locally renewable energy strategies, and has been the only group
willing to sift through the bureaucratic maze of PUC rules and regulations. My hope is that each of you will consider
sending them a small check....if you can spare $10 or $20 it will make a difference! There is a Pay Pal link
on their website: http://www.lifeofthelandhawaii.org/
....or you can mail a check to the address below:
Life of the Land
76 N. King Street, Suite 203
Honolulu, HI 96817

Thank you for joining me in ways to promote local energy self-sufficiency, not more bad decisions by our
public utility, which now has us paying 43 cents/ kWh, the second highest rates in the U.S.!! (Kauai is 49 cents/kWH).

If any of you want to do more to help turn back the “palm oil pipeline” idea, please contact me directly.
Mahalo,
ROB

------ Forwarded Message
From: "Henry Curtis" <henry.lifeofthelandgmail.com
Date: Wed, 1 Oct 2008 07:16:54 -1000
To: "Henry Curtis" <henry.lifeofthelandgmail.com

Friday, October 3, 2008

$700 Billion Flush...Now What?

Check this out, TED spreads, indicate increased interest rates on banks lending to each other relative to short-term treasury rates, have gone up since the $700 Billion "bailout," or "flush" was passed today. TED spread is something that is not easily manipulated as other things can be, so it is a good measure of expert sentiment on global risk. Check out the following chart and set it to one day to see what happened the day the $700 Billion Flush was passed by Congress. I know it's a longshot, but I think Congress will pay at least a few cents on this coming Election Day a few short weeks away. TED spread: http://www.bloomberg.com/apps/cbuilder?ticker1=.TEDSP%3AIND

Here are some short videos of statements made in Congress today: http://alohaanalytics.blogspot.com/2008/10/700-billion-flushnow-what.htm...

The following article, esp. at the end, has some good ideas for...Now What?:
http://rushkoff.com/2008/05/03/riding-out-the-credit-collapse/
"Riding Out the Credit Collapse"
Arthur Magazine, Spring 2008

"There’s two kinds of people asking me about the economy lately: people with money wanting to know how to keep it “safe,” and people without money, wanting to know how to keep safe, themselves.

Maybe it’s the difference between those two concerns that best explains the underlying nature of today’s fiscal crisis.

Hawaii must prepare for energy challenges
By Jim Dator and Manfred Zapka

Hawai'i is experiencing the initial stage of what may be its greatest challenge: the end of cheap, abundant, easily available oil.
How we respond will determine our future and that of our children and grandchildren and people who visit our shores.

The crisis isn't temporary — or political. Recent rapid increases in the price of oil are not temporary events that will soon pass.

While the price of oil may go down a bit for a while, it will increasingly head up sharply. We are in the initial stage of a permanent transformation of energy supplies and demand, which will result in a new world — and a new Hawai'i — in the 21st century. Even the conservative International Energy Agency, the energy watchdog for the industrial world, recently warned that 'the wheels might come off the oil supply' because of stagnating world oil supply in the face of strong and increasing demand.

Did this crisis catch us by surprise? Yes and no. Energy experts in the 1970s warned that peak oil would begin to affect us by the early 21st century. Early attempts were made with research and development of Ocean Thermal Energy Conversion (OTEC), solar, wind and geothermal energy — all potential sources we have in abundance in Hawai'i. And conservation remains the most important contribution to an energy solution that we can make.

Join hosts Andrea Brower and Keone Kealoha this Friday, October 3rd, noon - 1pm on KKCR (91.9FM or online at kkcr.org) when we talk RE:Localization with Relocalization Network Manager Asher Miller. The Relocalization Network was created in 2003 as one of the first initiatives of Post Carbon Institute. It developed as a response to individuals' questions about how they could take action to address the implications of peak oil. They found that the most effective strategies are initiated at the community level. For this reason, Post Carbon Institute decided that establishing a network of Local Post Carbon Groups was the best way to provide concerned individuals with the support and resources necessary to coordinate effective action.

The Relocalization Network is now composed of nearly 150 Local Post Carbon Groups from all over the world that are working to prepare their communities for an energy constrained future. These groups operate autonomously, while receiving guidance, educational resources, project and technical support and electronic infrastructure from Post Carbon Institute.

More on Post Carbon Institute
More on Relocalization Network

Thursday, October 2, 2008

This is outstanding, timely analysis:

http://www.financialsense.com/editorials/engdahl/2008/1001.html
"FINANCIAL TSUNAMI: The End of the World as we Knew it"
by F. William Engdahl October 1, 2008

"The unexpected US Congress’ rejection of the Bush Administration financial rescue plan, TARP on September 29 has opened up the spectre for the first time of a 1931-style domino wave of worldwide bank failures. That is already underway across the US banking spectrum with the failure, nationalization or forced liquidation in the past two weeks of Fannie Mae and Freddie Mac, of the giant Washington Mutual mortgage lender, of the nation’s fourth largest deposit bank, Wachovia. That was on top of a wave of smaller bank failures that began with IndyMac in the spring. For some it is appealing and more simple to grasp the magnitude of these titanic events in the US-centered financial world by assuming it is all part of a pre-planned grand conspiracy by the Money Masters, what in the 1920s in the USA was termed the Money Trust, to control the entire financial world.

Updated at 8:21 a.m., Wednesday, October 1, 2008
http://www.honoluluadvertiser.com/article/20081001/BREAKING01/81001013
U.S. Supreme Court to hear ceded lands case

Advertiser Staff

The U.S. Supreme Court today agreed to hear a case involving attempts by the state of Hawaii to sell portions of ceded lands on Maui and the Big Island to private, residential developers.

The state attempted to sell the land in the mid-1990 but was sued by the Office of Hawaiian Affairs and several individuals who sought to block the sale.

In December 2002, a state court ruled in favor of the state, saying it could sell the lands in question.

That ruling was appealed, and in January of this year, the Hawaii Supreme Court overturned the earlier ruling, and the case was appealed to the U.S. Supreme Court.

Ceded lands are former crown lands that were deeded over to the United States when Hawaii was annexed as a U.S. territory in 1898. Under an agreement signed at that time, revenues generated from ceded lands were to be used for the betterment of Native Hawaiians.

Today's announcement by the Supreme Court did not indicate how soon the court will hear the matter.

Wednesday, October 1, 2008

There has been some interesting things about FASB 157 requirements of "mark to market," and further information about TED spread measures of expected risk in the markets, but the most interesting things I found over the past day came from Rep. Brad Sherman of Sherman Oaks, CA. Others have done the work, so I'm just gonna repost them. First, watch this if you have only 1 minute: http://www.youtube.com/watch?v=Hi9vXKWYaZ8

http://www.cafemom.com/journals/read/1233733/Bailout_Bill_USA_bails_out_...
"Bailout Bill = USA bails out the world! ***READ PLEASE!***"
September 30, 2008 at 11:26 PM by Cecropia

"This is huge.

Watch: http://www.cnbc.com/id/15840232?video=873682522&play=1

"Brad Sherman (D-CA): The fact is, Larry, if you read the key provisions of this bill, you would have voted against it. It provides hundreds of billions of dollars of bailout to foreign investors. It provides no real control of [Henry] Paulson's power. There is a critique board, but not really a board that can step in and change what he does. It's a $700 billion dollar program run by a part-time, temporary employee, and there's no limit on million-dollar-a-month salaries....

Kudlow: Mr. Sherman, I appreciate your points of view. Foreign investors, I think you are referring to foreign banks headquartered in the United States or essentially that are domiciled here. I don't see how foreign investors get bailed out.

http://www.mauinews.com/page/content.detail/id/509131.html?nav=18
VIEWPOINT: How much is the Superferry draining from the state’s taxpayer revenues?
By IRENE BOWIE
POSTED: September 29, 2008

Gov. Linda Lingle recently issued emergency orders to control and reduce state government expenditures. The state budget director is forecasting a billion-dollar shortfall in revenues through 2011 and we're told the 2009 Legislature will need to make tough decisions.

Already depleted resources for the state library system have been trimmed by another $1.2 million, and community clinics that provide basic health care services to low-income and uninsured residents are underfunded.

In this difficult financial climate priorities must be considered and it has become even more critical that Hawaii taxpayers be presented a public report listing the costs which the state has incurred supporting a private, Mainland-owned corporation, Hawaii Superferry.

A complete financial accounting is especially important because the Lingle administration's Department of Transportation violated the law by exempting the ferry operation from undergoing the required HRS 343 Environmental Review in spite of the state Supreme Court's unanimous decision that the law be upheld.

The public is well aware of the $40 million loan to accommodate the ferry at all four major harbors for barges, ramps, fences and parking areas. But consider these other items being paid for by state taxpayers: