Forecast: The Last Word--Almost: A Commentary By Larry Sabato
From Rasmussen Reports:
Daily Presidential Tracking Poll
After showing the candidates just three points apart yesterday, the Rasmussen Reports daily Presidential Tracking Poll on Thursday returns to the range that has defined the race for over a month. It's Obama by five, 51% to 46%.
From Gallup.com:
Barack Obama continues to lead John McCain in both Gallup likely voter models, 50% to 45% in the traditional model, and 51% to 44% in the expanded model.
Read more at GALLUP.com.
Gallup finds voter engagement in the 2008 election rivaling that of prior high-turnout years. Gallup also finds that 21% of voters have already cast ballots for president, and another 12% intend to do so before Tuesday.
Read more at GALLUP.com.
Aloha, Brad
Friday, October 31, 2008
McCain's Last Hope...Vote Flipping and Pennsylvania
See: http://www.bradblog.com/
Also see: http://www.bradblog.com/?p=6590
and see: http://www.bradblog.com/?p=6588
Know before you vote,
Vote early absentee,
Reject electronic voting,
Vote paper ballot,
Audit the vote counting system,
Aloha, Brad
Also see: http://www.bradblog.com/?p=6590
and see: http://www.bradblog.com/?p=6588
Know before you vote,
Vote early absentee,
Reject electronic voting,
Vote paper ballot,
Audit the vote counting system,
Aloha, Brad
It’s Time to Implement Kaua‘i’s General Plan
http://www.kauaiworld.com/articles/2008/10/30/opinion/kauai/doc490958711c195208636925.txt
"It’s time to implement Kaua‘i’s General Plan"
By David Dinner October 30, 2008
"Eight years ago, after two years of effort, dozens of meetings and extensive public input, the County Council adopted the Kaua’i General Plan. The General Plan provides a 20-year vision for Kaua‘i. It is intended to serve as a roadmap for future development on Kaua‘i and as a guide for county government’s actions, including the issuance of development permits. It balances Kaua‘i’s need for jobs and economic development with protection of Kaua‘i’s environment, cultures and quality of life.
The County Charter requires the council to periodically adopt and update the General Plan, but it does not require that the council make sure that the General Plan’s vision becomes reality. Now, the lack of that formal requirement would not be a problem if the County Planning Commission — the body that grants development permits — used the General Plan to guide its decision-making.
Unfortunately, that hasn’t been the case. Under the high growth scenario of the General Plan, a need was projected for 2,500 additional tourist accommodation units (hotels, timeshares, resort condominiums and the like) over the 20 year period 2000-2020. That’s 1,000 additional units over eight years. But over the past eight years, the Planning Commission has allowed the construction of more than 4,000 new tourist accommodations.
What are some of the consequences of ignoring the General Plan? First, the pace of growth that has been allowed by the County Planning Commission has far exceeded the ability of the county’s infrastructure to keep pace. The result: increased traffic and congestion — and what we see today doesn’t even include the impacts of the thousands of already-approved, but not yet built, tourist units.
Second, compared to steady, well-paced growth, overly rapid growth actually hurts the local construction industry, because much of the new construction will be done by non-resident workers who are brought in during the building boom; and of course, when that bubble bursts, there will be few jobs left for local workers. Compared to steady, well-paced growth, overly rapid growth also means that Kaua‘i needs to import many new service-industry workers to meet the demand (increasing the shortage of affordable housing); but overbuilding ultimately leads to low hotel occupancy rates, so during periods of economic stress, tourist industry workers see reduced work hours, pay cuts and job losses.
Third, overly rapid growth means that Kaua‘i will approach the limits of its resources (groundwater, landfills, sewage treatment, etc.) far too soon. It also means that parks and beaches will be overcrowded, and that Kaua‘i’s character, rural pace, and quality of life will be lost. The very qualities that attract most tourists to Kaua‘i are seriously threatened by rapid, unbalanced development. And when those qualities are lost, there will be no good reason for most tourists to come to Kaua‘i rather than other tourist destinations. Ironically, too much development threatens to destroy rather than resuscitate the main driver of Kaua‘i’s economy.
The General Plan recognized that balanced, well-paced growth is a necessity. Like cancer, unbalanced, uncontrolled growth can be fatal to our island’s future. Yet for the past eight years, the Planning Commission has approved tourist units at a pace that is four to six times the growth rates envisioned in the General Plan; and for the past eight years, the County Council has taken no action to remedy that problem.
That is why, earlier this year, concerned citizens joined together to petition for a Charter Amendment that would address this critical problem. They recognized that the County Charter is deficient because it does not require anyone in county government to take ownership of the problem. More than 3,000 citizens signed the petition. And now it is before the voters on the November ballot.
Simply put, the Charter Amendment to implement the General Plan would require the County Council to enforce the growth element of the General Plan.
It would give the council the flexibility to do this in two ways:
∫ The council would become responsible for approving permits for tourist accommodations — but only with a super-majority vote and a finding that such approval would be consistent with the growth scenarios in the current or future General Plan.
∫ The council could authorize the Planning Commission to issue permits for such accommodations — but only up to an amount consistent with the growth scenarios in the current or future General Plan. In either case, our island would be far better off than today.
Stable, paced development means stable economic and employment growth. It means reduced impacts on our parks, beaches and environment. It means a better experience for Kaua‘i’s visitors and a better life for Kaua‘i’s residents. That is why we cannot afford to allow county government to continue to ignore the General Plan. The Charter Amendment to implement the General Plan is a balanced, sensible and realistic proposal to make our county government take responsibility for Kaua‘i’s future.
That is why I urge Kaua‘i’s voters to vote “Yes” on the Charter Amendment to implement the General Plan (the last proposal on the ballot)."
• David Dinner is the president of 1,000 Friends of Kauai and co-chairman of The People for the Preservation of Kauai. He is a resident of Kilauea.
Another article on this today:
http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=2008810300359
"It’s time to implement Kaua‘i’s General Plan"
By David Dinner October 30, 2008
"Eight years ago, after two years of effort, dozens of meetings and extensive public input, the County Council adopted the Kaua’i General Plan. The General Plan provides a 20-year vision for Kaua‘i. It is intended to serve as a roadmap for future development on Kaua‘i and as a guide for county government’s actions, including the issuance of development permits. It balances Kaua‘i’s need for jobs and economic development with protection of Kaua‘i’s environment, cultures and quality of life.
The County Charter requires the council to periodically adopt and update the General Plan, but it does not require that the council make sure that the General Plan’s vision becomes reality. Now, the lack of that formal requirement would not be a problem if the County Planning Commission — the body that grants development permits — used the General Plan to guide its decision-making.
Unfortunately, that hasn’t been the case. Under the high growth scenario of the General Plan, a need was projected for 2,500 additional tourist accommodation units (hotels, timeshares, resort condominiums and the like) over the 20 year period 2000-2020. That’s 1,000 additional units over eight years. But over the past eight years, the Planning Commission has allowed the construction of more than 4,000 new tourist accommodations.
What are some of the consequences of ignoring the General Plan? First, the pace of growth that has been allowed by the County Planning Commission has far exceeded the ability of the county’s infrastructure to keep pace. The result: increased traffic and congestion — and what we see today doesn’t even include the impacts of the thousands of already-approved, but not yet built, tourist units.
Second, compared to steady, well-paced growth, overly rapid growth actually hurts the local construction industry, because much of the new construction will be done by non-resident workers who are brought in during the building boom; and of course, when that bubble bursts, there will be few jobs left for local workers. Compared to steady, well-paced growth, overly rapid growth also means that Kaua‘i needs to import many new service-industry workers to meet the demand (increasing the shortage of affordable housing); but overbuilding ultimately leads to low hotel occupancy rates, so during periods of economic stress, tourist industry workers see reduced work hours, pay cuts and job losses.
Third, overly rapid growth means that Kaua‘i will approach the limits of its resources (groundwater, landfills, sewage treatment, etc.) far too soon. It also means that parks and beaches will be overcrowded, and that Kaua‘i’s character, rural pace, and quality of life will be lost. The very qualities that attract most tourists to Kaua‘i are seriously threatened by rapid, unbalanced development. And when those qualities are lost, there will be no good reason for most tourists to come to Kaua‘i rather than other tourist destinations. Ironically, too much development threatens to destroy rather than resuscitate the main driver of Kaua‘i’s economy.
The General Plan recognized that balanced, well-paced growth is a necessity. Like cancer, unbalanced, uncontrolled growth can be fatal to our island’s future. Yet for the past eight years, the Planning Commission has approved tourist units at a pace that is four to six times the growth rates envisioned in the General Plan; and for the past eight years, the County Council has taken no action to remedy that problem.
That is why, earlier this year, concerned citizens joined together to petition for a Charter Amendment that would address this critical problem. They recognized that the County Charter is deficient because it does not require anyone in county government to take ownership of the problem. More than 3,000 citizens signed the petition. And now it is before the voters on the November ballot.
Simply put, the Charter Amendment to implement the General Plan would require the County Council to enforce the growth element of the General Plan.
It would give the council the flexibility to do this in two ways:
∫ The council would become responsible for approving permits for tourist accommodations — but only with a super-majority vote and a finding that such approval would be consistent with the growth scenarios in the current or future General Plan.
∫ The council could authorize the Planning Commission to issue permits for such accommodations — but only up to an amount consistent with the growth scenarios in the current or future General Plan. In either case, our island would be far better off than today.
Stable, paced development means stable economic and employment growth. It means reduced impacts on our parks, beaches and environment. It means a better experience for Kaua‘i’s visitors and a better life for Kaua‘i’s residents. That is why we cannot afford to allow county government to continue to ignore the General Plan. The Charter Amendment to implement the General Plan is a balanced, sensible and realistic proposal to make our county government take responsibility for Kaua‘i’s future.
That is why I urge Kaua‘i’s voters to vote “Yes” on the Charter Amendment to implement the General Plan (the last proposal on the ballot)."
• David Dinner is the president of 1,000 Friends of Kauai and co-chairman of The People for the Preservation of Kauai. He is a resident of Kilauea.
Another article on this today:
http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=2008810300359
McCain Campaign may not want you to see this
"Election Protection" October 30, 2008 by TruthDig.com
by Amy Goodman
"Election Day approaches, and with it a test of our election system's integrity. Who will be allowed to vote; who will be barred? Who will get paper ballots; who will use electronic voting machines? Will polls be open long enough to accommodate what is expected to be a historic turnout?
Veteran activist Harvey Wasserman has co-written four books on elections and voter rights. He says John Kerry won Ohio in 2004. Why look back? Wasserman is concerned about the attempt by the Ohio Republican Party, with help from the Bush White House, to challenge the registration of new Ohio voters:
"The GOP is trying to disenfranchise these 200,000 people by challenging their right to vote, asking the secretary of state here, Jennifer Brunner, to let the counties investigate and knock off the voter rolls, if they choose to, people who have minor discrepancies in their Social Security numbers or driver's license numbers. And the secretary of state has rightfully showed that many of these mistakes come from typographical errors when the numbers are entered in at the agencies."
The U.S. Supreme Court ruled that only the U.S. Department of Justice can purge these new registrants from the voter rolls. Republican House Minority Leader John Boehner, of Ohio, and President Bush urged U.S. Attorney General Michael Mukasey to take action, potentially purging these 200,000 people. Advocates feared the homeless in Ohio would be disenfranchised because they lack a traditional address or identification (Wasserman notes that many of them may be veterans). U.S. District Judge Edmund Sargus ruled that Ohio counties must allow voters who list their addresses as park benches or other non-building locations.
Wasserman's two main concerns about the integrity of the election are mass disenfranchisement through computerized purging and the failures of electronic voting machines, which can skew vote tallies and cause impossibly long lines at polling places (as can the provision of too few voting machines, whether they work well or not). These issues are both coming to a head in Colorado. There, Secretary of State Mike Coffman, a Republican who is also running for Congress, has been sued by Common Cause, Mi Familia Vota and the Service Employees International Union for purging 30,000 voters within a 90-day window before an election. Six thousand seven hundred new registrants were purged for failing to check a box on the voter-registration form. Colorado has seen enthusiastic participation in early voting (some estimates nationally put the number of early voters at an astounding 10 million, with days to go), and also has seen many voters opt for mail-in ballots. However, more than 11,000 voters in Denver did not receive their mail-in ballots because of a mistake made by Sequoia Voting Systems, the company that was supposed to have delivered 21,000 ballots to a Denver mail-processing facility on Oct. 16. Election officials promise the ballots will be delivered.
Brad Friedman of BradBlog.com told me: "Sequoia is one of the big-four voting-machine companies. Of course, they have failed in state after state." Friedman also reports on "vote flipping," a problem with electronic, touch-screen voting machines. "It's West Virginia, it's Tennessee, it's Texas, Missouri, Nevada ... people go in and vote for a Democratic straight-party ticket or for Barack Obama, and the vote flips to a Republican or some other candidate." The companies claim the machines can be calibrated to work properly. Friedman disagrees: "These machines need to be pulled out, because even when they work, the problem is that there is absolutely no way to ever verify that any vote ever cast on a touch-screen machine like this has been recorded as per the voter's intent."
In response to video of Georgia early voters waiting eight hours, Friedman blogged: "Thank you to those voters who were willing to hang in there! Shame on you to those officials who set up this system that can't even accommodate the limited numbers of early voters! God save us all next Tuesday. Stay strong and brave people!"
The National Association for the Advancement of Colored People has sued Virginia's Democratic governor, Tim Kaine, on the grounds that he is unprepared to deal with a massive onslaught of voters there Nov. 4. Virginia is not among the 31 states with early voting.
Thousands of lawyers and citizen-activists will be monitoring the polling places on Election Day. People are posting videos of election problems at www.videothevote.org. When you go to cast your vote, take a friend or neighbor, take your ID and take a camera as well. Election protection is everyone's job."
Denis Moynihan contributed research to this column.
Amy Goodman is the host of "Democracy Now!" a daily international TV/radio news hour airing on more than 700 stations in North America. She has been awarded the 2008 Right Livelihood Award, dubbed the "Alternative Nobel" prize, and will receive the award in the Swedish Parliament in December.
Thursday, October 30, 2008
Peak Oil IS History
Forwarded by Andrea Brower:
http://www.postcarbon.org/nine_percent
"Nine Percent" by Richard Heinberg on October 29, 2008
"The Financial Times has leaked the results of the International Energy Agency's long-awaited study of the depletion profiles of the world's 400 largest oilfields, indicating that, "Without extra investment to raise production, the natural annual rate of output decline is 9.1%."
This is a stunning figure.
Considering regular crude oil only, this means that 6.825 million barrels a day of new production capacity must come on line each year just to keep up with the aggregate natural decline rate in existing oilfields. That's a new Saudi Arabia every 18 months.
The Financial Times story goes on:
The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as those in the North Sea, Russia and Alaska, and meet long-term demand. The effort will become even more acute as [oil] prices fall and investment decisions are delayed.
This is putting it mildly. Investment capital is being vaporized almost daily in a global deflationary bonfire of unprecedented ferocity. Oil production projects are being mothballed left and right.
Inter alia, the IEA takes the requisite swat at "peak oil theorists," who, the agency somehow still believes, are saying that the world is "running out of oil." Of course that's NOT what peak oil theorists say, but a correct summation of their position would have to be followed with a statement to the effect that, "Our research supports their position," which would be just too embarrassing.
Sadly, the IEA feels it must pull its punch even further. With adequate investment in new small oilfields and unconventional sources like tarsands, it insists, the world can still achieve higher levels of production. In other words, if the $12 trillion that vanished from the world stock markets last week were invested in new tarsands projects, then theoretically a few more years of total oil production growth could be eked out (not growth in net energy production, mind you, but in the gross—and I do mean gross—production of exotic, very expensive stuff that it's physically possible to run your car on, assuming you could afford to do so).
Of course, any realistic assessment either of the likelihood of that level of investment appearing, or of the ability of new projects to really produce a sufficient rate of flow regardless of the size of the cash infusion, would end merely in a hearty belly-laugh.
Evidently peeved about being scooped on its planned November 12 press conference roll-out of the study, the IEA has disavowed the Financial Times story. But if nine percent is even close to being the final figure, then it's absolutely clear: July 2008 was the all-time peak in world oil production. Don't expect anyone at the IEA to officially admit that fact until 2025 or so. But among those who pay attention to the evidence and the terms of the debate, further ink need not be spilled in speculation. -- Peak oil IS history."
Aloha, Brad
http://www.postcarbon.org/nine_percent
"Nine Percent" by Richard Heinberg on October 29, 2008
"The Financial Times has leaked the results of the International Energy Agency's long-awaited study of the depletion profiles of the world's 400 largest oilfields, indicating that, "Without extra investment to raise production, the natural annual rate of output decline is 9.1%."
This is a stunning figure.
Considering regular crude oil only, this means that 6.825 million barrels a day of new production capacity must come on line each year just to keep up with the aggregate natural decline rate in existing oilfields. That's a new Saudi Arabia every 18 months.
The Financial Times story goes on:
The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as those in the North Sea, Russia and Alaska, and meet long-term demand. The effort will become even more acute as [oil] prices fall and investment decisions are delayed.
This is putting it mildly. Investment capital is being vaporized almost daily in a global deflationary bonfire of unprecedented ferocity. Oil production projects are being mothballed left and right.
Inter alia, the IEA takes the requisite swat at "peak oil theorists," who, the agency somehow still believes, are saying that the world is "running out of oil." Of course that's NOT what peak oil theorists say, but a correct summation of their position would have to be followed with a statement to the effect that, "Our research supports their position," which would be just too embarrassing.
Sadly, the IEA feels it must pull its punch even further. With adequate investment in new small oilfields and unconventional sources like tarsands, it insists, the world can still achieve higher levels of production. In other words, if the $12 trillion that vanished from the world stock markets last week were invested in new tarsands projects, then theoretically a few more years of total oil production growth could be eked out (not growth in net energy production, mind you, but in the gross—and I do mean gross—production of exotic, very expensive stuff that it's physically possible to run your car on, assuming you could afford to do so).
Of course, any realistic assessment either of the likelihood of that level of investment appearing, or of the ability of new projects to really produce a sufficient rate of flow regardless of the size of the cash infusion, would end merely in a hearty belly-laugh.
Evidently peeved about being scooped on its planned November 12 press conference roll-out of the study, the IEA has disavowed the Financial Times story. But if nine percent is even close to being the final figure, then it's absolutely clear: July 2008 was the all-time peak in world oil production. Don't expect anyone at the IEA to officially admit that fact until 2025 or so. But among those who pay attention to the evidence and the terms of the debate, further ink need not be spilled in speculation. -- Peak oil IS history."
Aloha, Brad
Fed $15 Billion 'Swap' Arrangement with New Zealand
Good data and graph comparisons at: http://money.cnn.com/data/currencies/
http://money.cnn.com/2008/10/28/news/economy/new_zealand_swap.ap/index.htm
"Fed to supply $15B to New Zealand's central bank"
Under a swap deal, the Fed will send U.S. dollars to New Zealand in return for that country's currency. October 28, 2008
WASHINGTON (AP) -- "The Federal Reserve announced Tuesday that it will supply New Zealand's central bank with up to $15 billion, part of an ongoing effort by the Fed to break through a global credit clog.
Under the new "swap" arrangement, the Fed will provide dollars to the Reserve Bank of New Zealand in exchange for that country's currency.
"This facility, like those already established with other central banks, is designed to help improve liquidity conditions in global financial markets," the Fed explained in a brief statement.
The goal is to spur banks and other financial institutions to lend more freely, something that will help the U.S. and global economies.
The Fed has set up similar arrangements with the European Central Bank and with central banks in other countries, including Australia, Canada, and Japan."
http://www.reuters.com/article/governmentFilingsNews/idUSN2958009320081029
"UPDATE 2-U.S. Fed launches four new currency swap lines"
By David Lawder Oct 29, 2008
WASHINGTON, Oct 29 (Reuters) - "The Federal Reserve on Wednesday extended U.S. dollar liquidity aid beyond traditional markets, opening four new $30 billion currency swap lines with Brazil, Mexico, South Korea and Singapore.
The temporary arrangements, authorized through April 30, 2009, are aimed at easing global U.S. dollar funding shortages, the Fed said.
"These facilities, like those already established with other central banks, are designed to help improve liquidity conditions in global financial markets and to mitigate the spread of difficulties in obtaining U.S. dollar funding in fundamentally sound and well-managed economies," the Fed said in a statement released in Washington.
The decision comes a day after the Fed established a $15 billion swap line with the Reserve Bank of New Zealand. The U.S. central bank now has 13 swap lines with foreign central banks.
It also coincides with the International Monetary Fund's decision to launch a short-term financing fund to help emerging market economies weather the global credit crisis.
The Fed has expanded its reciprocal currency agreements with foreign central banks in recent weeks to ensure they have a steady stream of short-term U.S. dollar funding as financial institutions in their markets unwind dollar-based assets. Global credit markets froze up in late September after the failure of investment bank Lehman Brothers, limiting private sources of dollar funding.
The Fed in mid-October lifted all limits on swaps with the European Central Bank, the Bank of England, the Bank of Japan and the Swiss National Bank. It also is maintaining swap lines with the central banks of Canada, Norway, Australia, Sweden and New Zealand.
In separate statements, the foreign central banks said the swap lines would be used to meet U.S. dollar funding needs of their financial institutions and help ease pressures from international financial turmoil.
The Banco Central do Brasil said Brazil's National Monetary Council would set conditions on institutions' use of the swap line.
"This agreement is part of the central bank's strategy to combat the effects of the international financial turbulence on the Brazilian economy," the bank said in a statement, adding that such arrangements highlighted the "importance of central bank cooperation at the current juncture."
The Bank of Korea said in statement that Brazil, Mexico, Korea and Singapore accounted for 6.0 percent of the world economy in 2007 and together had foreign currency reserves of nearly $700 billion..." Continued...
http://money.cnn.com/2008/10/28/news/economy/new_zealand_swap.ap/index.htm
"Fed to supply $15B to New Zealand's central bank"
Under a swap deal, the Fed will send U.S. dollars to New Zealand in return for that country's currency. October 28, 2008
WASHINGTON (AP) -- "The Federal Reserve announced Tuesday that it will supply New Zealand's central bank with up to $15 billion, part of an ongoing effort by the Fed to break through a global credit clog.
Under the new "swap" arrangement, the Fed will provide dollars to the Reserve Bank of New Zealand in exchange for that country's currency.
"This facility, like those already established with other central banks, is designed to help improve liquidity conditions in global financial markets," the Fed explained in a brief statement.
The goal is to spur banks and other financial institutions to lend more freely, something that will help the U.S. and global economies.
The Fed has set up similar arrangements with the European Central Bank and with central banks in other countries, including Australia, Canada, and Japan."
http://www.reuters.com/article/governmentFilingsNews/idUSN2958009320081029
"UPDATE 2-U.S. Fed launches four new currency swap lines"
By David Lawder Oct 29, 2008
WASHINGTON, Oct 29 (Reuters) - "The Federal Reserve on Wednesday extended U.S. dollar liquidity aid beyond traditional markets, opening four new $30 billion currency swap lines with Brazil, Mexico, South Korea and Singapore.
The temporary arrangements, authorized through April 30, 2009, are aimed at easing global U.S. dollar funding shortages, the Fed said.
"These facilities, like those already established with other central banks, are designed to help improve liquidity conditions in global financial markets and to mitigate the spread of difficulties in obtaining U.S. dollar funding in fundamentally sound and well-managed economies," the Fed said in a statement released in Washington.
The decision comes a day after the Fed established a $15 billion swap line with the Reserve Bank of New Zealand. The U.S. central bank now has 13 swap lines with foreign central banks.
It also coincides with the International Monetary Fund's decision to launch a short-term financing fund to help emerging market economies weather the global credit crisis.
The Fed has expanded its reciprocal currency agreements with foreign central banks in recent weeks to ensure they have a steady stream of short-term U.S. dollar funding as financial institutions in their markets unwind dollar-based assets. Global credit markets froze up in late September after the failure of investment bank Lehman Brothers, limiting private sources of dollar funding.
The Fed in mid-October lifted all limits on swaps with the European Central Bank, the Bank of England, the Bank of Japan and the Swiss National Bank. It also is maintaining swap lines with the central banks of Canada, Norway, Australia, Sweden and New Zealand.
In separate statements, the foreign central banks said the swap lines would be used to meet U.S. dollar funding needs of their financial institutions and help ease pressures from international financial turmoil.
The Banco Central do Brasil said Brazil's National Monetary Council would set conditions on institutions' use of the swap line.
"This agreement is part of the central bank's strategy to combat the effects of the international financial turbulence on the Brazilian economy," the bank said in a statement, adding that such arrangements highlighted the "importance of central bank cooperation at the current juncture."
The Bank of Korea said in statement that Brazil, Mexico, Korea and Singapore accounted for 6.0 percent of the world economy in 2007 and together had foreign currency reserves of nearly $700 billion..." Continued...
Wednesday, October 29, 2008
McCain State-by-State Campaign Falling Apart
McCain's state-by-state campaign is falling apart. See:
http://www.realclearpolitics.com/epolls/maps/obama_vs_mccain/
Traditional Republican states are leaving McCain and falling into Toss-ups. Other states are falling from toss-up to leaning Obama to solid Obama. Only one state recently has gone against that trend.
This is so even though the two largest national tracking polls show a race tightening to within 3% points.
GOTV for Obama will hammer home a landslide with coattails.
Aloha, Brad
http://www.realclearpolitics.com/epolls/maps/obama_vs_mccain/
Traditional Republican states are leaving McCain and falling into Toss-ups. Other states are falling from toss-up to leaning Obama to solid Obama. Only one state recently has gone against that trend.
This is so even though the two largest national tracking polls show a race tightening to within 3% points.
GOTV for Obama will hammer home a landslide with coattails.
Aloha, Brad
Kauai Letters in Support of JoAnn Yukimura Oct. 29th
http://www.kauaiworld.com/articles/2008/10/29/opinion/letters_to_the_editor/doc4907fb81f3bc3916537931.txt
Letters for Wednesday, October 29, 2008
"Bernard versus JoAnn"
"By all accounts Bernard is a very nice person: warm and friendly. I would love to see him continue the fine job he is doing with our county Parks and Recreation Department. I would love to see him keep improving the system.
Kaua‘i is faced with many pressing issues right now. Two that have some focus for me are energy and solid waste.
As a founding member of Apollo Kaua‘i, with a mission to promote energy efficiency and conservation and the use of appropriate renewable energy resources, JoAnn Yukimura has been involved and searching for solutions these last three years.
She understands the urgency and has worked towards a solar hot water mandate for new construction. She had the vision back in the ‘90s to create the Kaua‘i Bus. I have not seen Bernard involved at all in the conversation or take the time to attend the most recent outstanding two-day energy conference, even when he was officially running for office. JoAnn was there.
On the issue of solid waste, JoAnn has worked diligently alongside Zero Waste Kaua‘i to promote an aggressive recycling effort to make an immediate reduction in our over-flowing landfill and to promote the reuse of the many valuable resources that gets shipped here.
She also understands that a waste-to-energy facility can cost upwards of $115 million and take years to permit, site and build. Would you like toxic burning garbage in your back yard?
I feel JoAnn is the clear choice for mayor."
• Pamela Burrell, Kilauea
"Vote for Zero Waste"
"For the past couple years, I have been chair of Zero Waste Kaua‘i. We don’t endorse candidates, but we sure do keep up on the candidates and their public statements.
I favor maximum reduce, reuse, recycle. I do not want to see an expensive, polluting garbage incinerator that would force us to import garbage from O‘ahu. I favor limiting plastic bags and Styrofoam.
Here are the candidates that seem to agree: JoAnn Yukimura (for sure), Tim Bynum, Lani Kawahara, Kipukai Kuali‘i, Jay Furfaro and Bruce Pleas.
If these folks win, there is more likelihood that we will have a smaller landfill and the county will profit from changing “waste” into valuable resources. Don’t forget to vote Tuesday."
• Gordon LaBedz, Kekaha
"Yukimura for Real Change"
"I am wondering what Amanda Gregg lives on (“We all have a stake,” Letters, Oct 27).
The future of Kaua‘i doesn’t depend on “leadership style and sincerity,” it depends on leadership experience and knowledge on the issues before us.
What progressive ideas did Bernard Carvalho help the late Mayor Bryan Baptiste bring into fruition?
Community means all of us, not just those in with the old boy/Republican machine. Carvalho is a mouthpiece for that machine.
His campaign coffers are full of Republican money, his campaign office is staffed with Republican diehards who were going to throw the Obama yard signs their campaign was given into the garbage.
If you want real change, a sustainable Kaua‘i, then vote for JoAnn Yukimura. Voting for the other candidate just means more of the same as the last 14 years of looking out for the interests of big developers and rich land owners.
If we are going to be able to give our children a place to make a good life in, then we need to choose hope instead of fear. We need to elect JoAnn Yukimura as mayor to lead us in a new direction. To a future for our grandchildren we can smile about."
• David Thorp, Koloa
Letters for Wednesday, October 29, 2008
"Bernard versus JoAnn"
"By all accounts Bernard is a very nice person: warm and friendly. I would love to see him continue the fine job he is doing with our county Parks and Recreation Department. I would love to see him keep improving the system.
Kaua‘i is faced with many pressing issues right now. Two that have some focus for me are energy and solid waste.
As a founding member of Apollo Kaua‘i, with a mission to promote energy efficiency and conservation and the use of appropriate renewable energy resources, JoAnn Yukimura has been involved and searching for solutions these last three years.
She understands the urgency and has worked towards a solar hot water mandate for new construction. She had the vision back in the ‘90s to create the Kaua‘i Bus. I have not seen Bernard involved at all in the conversation or take the time to attend the most recent outstanding two-day energy conference, even when he was officially running for office. JoAnn was there.
On the issue of solid waste, JoAnn has worked diligently alongside Zero Waste Kaua‘i to promote an aggressive recycling effort to make an immediate reduction in our over-flowing landfill and to promote the reuse of the many valuable resources that gets shipped here.
She also understands that a waste-to-energy facility can cost upwards of $115 million and take years to permit, site and build. Would you like toxic burning garbage in your back yard?
I feel JoAnn is the clear choice for mayor."
• Pamela Burrell, Kilauea
"Vote for Zero Waste"
"For the past couple years, I have been chair of Zero Waste Kaua‘i. We don’t endorse candidates, but we sure do keep up on the candidates and their public statements.
I favor maximum reduce, reuse, recycle. I do not want to see an expensive, polluting garbage incinerator that would force us to import garbage from O‘ahu. I favor limiting plastic bags and Styrofoam.
Here are the candidates that seem to agree: JoAnn Yukimura (for sure), Tim Bynum, Lani Kawahara, Kipukai Kuali‘i, Jay Furfaro and Bruce Pleas.
If these folks win, there is more likelihood that we will have a smaller landfill and the county will profit from changing “waste” into valuable resources. Don’t forget to vote Tuesday."
• Gordon LaBedz, Kekaha
"Yukimura for Real Change"
"I am wondering what Amanda Gregg lives on (“We all have a stake,” Letters, Oct 27).
The future of Kaua‘i doesn’t depend on “leadership style and sincerity,” it depends on leadership experience and knowledge on the issues before us.
What progressive ideas did Bernard Carvalho help the late Mayor Bryan Baptiste bring into fruition?
Community means all of us, not just those in with the old boy/Republican machine. Carvalho is a mouthpiece for that machine.
His campaign coffers are full of Republican money, his campaign office is staffed with Republican diehards who were going to throw the Obama yard signs their campaign was given into the garbage.
If you want real change, a sustainable Kaua‘i, then vote for JoAnn Yukimura. Voting for the other candidate just means more of the same as the last 14 years of looking out for the interests of big developers and rich land owners.
If we are going to be able to give our children a place to make a good life in, then we need to choose hope instead of fear. We need to elect JoAnn Yukimura as mayor to lead us in a new direction. To a future for our grandchildren we can smile about."
• David Thorp, Koloa
What's Happening with Luxury Brands in this Economy
http://www.cnbc.com/id/27436190
"Luxury Brands Struggle to Attract Clients"
Topics:Luxury Brands Wealth Economy (U.S.)
Sectors:Retail
Sophia Banay 29 Oct 2008
"The Wall Street stockbroker had used FlatRate Moving, a high-end moving service, a half-dozen times over the years. They moved him from a modest apartment on the Upper East Side to a grander one on the Upper West. He called when he moved to an even better building in Midtown. Most recently, FlatRate helped settle him and his wife and child into a 3,000-square-foot loft in Soho, one of Manhattan's priciest neighborhoods.
FlatRate got another call two months ago. The client was packing up his family for a two-bedroom apartment in the less expensive Park Slope, Brooklyn. He had lost his job and was no longer in a position to pay the $3,000 to $5,000 a month he'd shelled out before.
"We did the move almost at cost"—for under $1,200, says Michael Kessler, FlatRate's vice president of marketing and sales. Now, FlatRate gets calls for "downgrade" moves about once a day, Kessler says, mostly from clients in the financial world, many of whom are leaving Manhattan for Brooklyn or Queens. The company just introduced an "economy" moving package that leaves out extras like an on-site liaison to supervise the move; photographed inventory of the apartment; and complete packing and unpacking service. With the new package, FlatRate hands off some used boxes and clients—like the client who lost his job at Lehman Brothers and moved from the Upper East Side to Astoria, Queens—pack up themselves.
The economic downturn isn't just hitting the middle class; the wealthiest layer of consumers is also getting pummeled. More than 110,000 Wall Street jobs have been lost this year. and bonuses are expected to plummet Many C.E.O.'s have seen their net worths tank along with stock prices. Hedge funds, those secretive bastions of wealth, aren't doing much better, having lost $130 billion in the past three months.
In response, providers of luxury goods and services—elite movers, exclusive spas, exclusive restaurants, and even private-jet charter companies—are introducing promotions and deals, often for the first time (view slideshow of luxury deals). These are the types of wares that don't normally go on sale, since they fall into the "If you have to ask…" category. Still, businesses are quietly reaching out to consumers battered by the economy but not ready—yet—to give up their high-flying lifestyles.
"We don't want to give something away if we don't have to," says David McCown, senior vice president of Air Partner, a jet charter company that is based in New York. "But we're willing to do it."
Air Partner is offering discounts on the company's jet cards, which start at $4,700 an hour, for light jets like a Citation 5, Lear 35, or Beech 400. The cards are available in increments of 10 hours and up. Now, because of softening demand from clients and a recent drop in fuel prices, those hourly rates are being discounted as much as 10 percent.
"The economic crisis has directly affected demand, especially from the financial industry," says McCown. "Hedge funds, investment banks, private-equity firms, venture capitalists: When we go talk to them as our clients, they're walking cautiously."
Still, he has no plans to broadcast the new prices aggressively, preferring instead to get the word out through his sales force when the topic comes up. After all, he says, what if Air Partner committed to the new low pricing, and the economy turned around?
Hence, sizeable discounts on luxury goods are being doled out discreetly. Canyon Ranch, the chain of spa retreats, personally phoned clients in the past few weeks to offer 25 percent off a stay if they brought a guest. Cornelia Day Resort, a spa on Fifth Avenue in Manhattan, is slipping $30 credits toward gift-card purchases into clients' lockers. And 3Lab, the exclusive skin-care company whose standard face cream sells in Saks and Barneys for $400, is offering free facials with any purchase at Barneys across the U.S.
Retailers like Elie Tahari and Bergdorf Goodman are offering free shipping, "private" discounts, and earlier-than-usual sales. This week, Women’s Wear Daily reported that department stores were asking designers to launch collections with lower price points. Tori Burch said she was hoping to start creating more “affordable” evening wear.
Over the next few months, Dana Telsey, the chief research officer at the Telsey Advisory Group, an equity research and consulting firm specializing in retail in New York, predicts that consumers will see an unprecedented barrage of sales and special offers. "This holiday season is poised to be more promotional than others, given the volatility of the financial markets, which is having an impact on all consumers, both high-end and low-end," Telsey says. On Manhattan's Upper West Side, Ed Brown, the chef and owner of new restaurant Eighty One, has extended and modified the prix-fixe menu he created over the summer to accommodate clients hurt by the financial crisis. The menu offers two courses for $42 dollars, allowing customers to save about $20 per person on the average check. Brown's clients, who mostly come from the moneyed stretch of Central Park West that encompasses luxury buildings like the Beresford, have displayed a range of reactions to the financial crisis. "The 30- to 45-year-olds that still have young families, they take the hit much harder," says Brown. "Their retirement and kids' education plans got a whack. The guys who make $1 million a year may make nothing this year. People just aren't sure what to do yet. Do we stop going out?" If they don't, at least they just might get a deal."
"Luxury Brands Struggle to Attract Clients"
Topics:Luxury Brands Wealth Economy (U.S.)
Sectors:Retail
Sophia Banay 29 Oct 2008
"The Wall Street stockbroker had used FlatRate Moving, a high-end moving service, a half-dozen times over the years. They moved him from a modest apartment on the Upper East Side to a grander one on the Upper West. He called when he moved to an even better building in Midtown. Most recently, FlatRate helped settle him and his wife and child into a 3,000-square-foot loft in Soho, one of Manhattan's priciest neighborhoods.
FlatRate got another call two months ago. The client was packing up his family for a two-bedroom apartment in the less expensive Park Slope, Brooklyn. He had lost his job and was no longer in a position to pay the $3,000 to $5,000 a month he'd shelled out before.
"We did the move almost at cost"—for under $1,200, says Michael Kessler, FlatRate's vice president of marketing and sales. Now, FlatRate gets calls for "downgrade" moves about once a day, Kessler says, mostly from clients in the financial world, many of whom are leaving Manhattan for Brooklyn or Queens. The company just introduced an "economy" moving package that leaves out extras like an on-site liaison to supervise the move; photographed inventory of the apartment; and complete packing and unpacking service. With the new package, FlatRate hands off some used boxes and clients—like the client who lost his job at Lehman Brothers and moved from the Upper East Side to Astoria, Queens—pack up themselves.
The economic downturn isn't just hitting the middle class; the wealthiest layer of consumers is also getting pummeled. More than 110,000 Wall Street jobs have been lost this year. and bonuses are expected to plummet Many C.E.O.'s have seen their net worths tank along with stock prices. Hedge funds, those secretive bastions of wealth, aren't doing much better, having lost $130 billion in the past three months.
In response, providers of luxury goods and services—elite movers, exclusive spas, exclusive restaurants, and even private-jet charter companies—are introducing promotions and deals, often for the first time (view slideshow of luxury deals). These are the types of wares that don't normally go on sale, since they fall into the "If you have to ask…" category. Still, businesses are quietly reaching out to consumers battered by the economy but not ready—yet—to give up their high-flying lifestyles.
"We don't want to give something away if we don't have to," says David McCown, senior vice president of Air Partner, a jet charter company that is based in New York. "But we're willing to do it."
Air Partner is offering discounts on the company's jet cards, which start at $4,700 an hour, for light jets like a Citation 5, Lear 35, or Beech 400. The cards are available in increments of 10 hours and up. Now, because of softening demand from clients and a recent drop in fuel prices, those hourly rates are being discounted as much as 10 percent.
"The economic crisis has directly affected demand, especially from the financial industry," says McCown. "Hedge funds, investment banks, private-equity firms, venture capitalists: When we go talk to them as our clients, they're walking cautiously."
Still, he has no plans to broadcast the new prices aggressively, preferring instead to get the word out through his sales force when the topic comes up. After all, he says, what if Air Partner committed to the new low pricing, and the economy turned around?
Hence, sizeable discounts on luxury goods are being doled out discreetly. Canyon Ranch, the chain of spa retreats, personally phoned clients in the past few weeks to offer 25 percent off a stay if they brought a guest. Cornelia Day Resort, a spa on Fifth Avenue in Manhattan, is slipping $30 credits toward gift-card purchases into clients' lockers. And 3Lab, the exclusive skin-care company whose standard face cream sells in Saks and Barneys for $400, is offering free facials with any purchase at Barneys across the U.S.
Retailers like Elie Tahari and Bergdorf Goodman are offering free shipping, "private" discounts, and earlier-than-usual sales. This week, Women’s Wear Daily reported that department stores were asking designers to launch collections with lower price points. Tori Burch said she was hoping to start creating more “affordable” evening wear.
Over the next few months, Dana Telsey, the chief research officer at the Telsey Advisory Group, an equity research and consulting firm specializing in retail in New York, predicts that consumers will see an unprecedented barrage of sales and special offers. "This holiday season is poised to be more promotional than others, given the volatility of the financial markets, which is having an impact on all consumers, both high-end and low-end," Telsey says. On Manhattan's Upper West Side, Ed Brown, the chef and owner of new restaurant Eighty One, has extended and modified the prix-fixe menu he created over the summer to accommodate clients hurt by the financial crisis. The menu offers two courses for $42 dollars, allowing customers to save about $20 per person on the average check. Brown's clients, who mostly come from the moneyed stretch of Central Park West that encompasses luxury buildings like the Beresford, have displayed a range of reactions to the financial crisis. "The 30- to 45-year-olds that still have young families, they take the hit much harder," says Brown. "Their retirement and kids' education plans got a whack. The guys who make $1 million a year may make nothing this year. People just aren't sure what to do yet. Do we stop going out?" If they don't, at least they just might get a deal."
Tuesday, October 28, 2008
Video: The True Story of Kaluaikoolau
About my favorite Kauai videographer and bookwriter:
http://www.honoluluadvertiser.com/article/20081026/COLUMNISTS02/810260335/1120/localnewsfront
Sunday, October 26, 2008
"Powerful tale told in Hawaiian"
By Lee Cataluna Advertiser Columnist
"Haunani Seward has seen the movie countless times but it still makes her cry.
The students in the little school where Seward is principal, Ke Kula Ni'ihau O Kekaha Learning Center, spent two years working on "The True Story of Kaluaikoolau." The result is a film entirely in the Hawaiian language — specifically in the Ni'ihau dialect — with English subtitles. It is the language in which the story was first told of the family that would not let anything or anyone tear them apart.
In 1892, after realizing that he had Hansen's disease, Koolau fled with his wife and young son into the wilderness of Kaua'i's Kalalau Valley rather than be arrested by soldiers and sent alone to Kalaupapa on Moloka'i. The child, Kaleimanu, succumbed first to the disease, and Piilani had to bury her boy and then her husband. Through it all, she held tight to her faith in God. After three years of living as an outlaw, Piilani returned to her family in Kekaha. She later told her story to a reporter, and it was first published in the Hawaiian language in 1906.
The story is beautiful and tear-jerking, and the high school students who portray Koolau and Piilani give an amazing emotional performance, but Seward says that's not what brings her to tears:
"I think I'm crying because it was so hard to do."
The two-year project provided the vehicle for many lessons for the students. They studied with botanists to learn about plants the family would have used for food and medicine during their exile. They went on hikes in Koke'e and studied old maps to try to track the family's travels. They discussed the historical context of the story, which happened in the era after the overthrow of the Hawaiian monarchy.
The idea for a film started with a phone call out of the blue. Filmmaker Koohan "Camera" Paik called the school and offered her services as a teacher and mentor.
"I was just saying 10 minutes before she called that I needed a film teacher," Seward said.
Paik came with heavy credentials and a deep love for the story. She spent her childhood on Guam, went to USC Film School and then NYU graduate school, where she studied screenwriting and playwriting. She had a special interest in making films in indigenous languages. She fell in love with Piilani's story and thought it was a perfect learning tool for the students.
"Through the process, I kept deferring to Piilani," Paik said. The script is faithful to Piilani's account of what the family went through. "I would pray to her at night. I wanted to make it exactly the way she would have wanted it."
Ke Kula Ni'ihau O Kekaha is the smallest charter school in the state, with only 45 students in classes from preschool to grade 12. Students learn exclusively in the Hawaiian language, specifically the Ni'ihau dialect, until fourth grade, when English is introduced. Graduates are fluent in both languages.
The story of Koolau held deep meaning for the students. It happened right there in their community. It was first told in their native language. Some of the kids are relatives of the people named in the tale.
The film premiered two years ago in Kalaupapa, Moloka'i, the Hansen's disease settlement. Only the students older than 16 could attend, as children are not allowed to visit Kalaupapa.
"That's when it all came together," Seward said. "There wasn't a dry eye in the house."
Paik said the toughest, most skeptical girl in the school came up to her after the Kalaupapa premiere and said, "It came out good," which she took as effusive praise.
The principal actors in the production have since graduated. The narrator has gone off to college.
But the film has taken on a life of its own.
Seward and Paik still travel to different islands to attend screenings and answer questions. The project was never intended to be a moneymaker or a star vehicle, though it is good enough to be both. Seward wanted her students to go through the long learning journey of finishing such a complicated project. She also wanted to create a DVD in the Ni'ihau dialect. Her school is not an immersion school. The students all speak Hawaiian at home as their first language. It is an indigenous language school, and part of the mission is to perpetuate the Ni'ihau Hawaiian dialect. The film project does just that.
Still, it is film-festival quality work. The care with which historical accuracy was attended to is amazing, and the leads, Oliwa Kanahele, Kaehu Kanahele and Keoki Strickland, are so sincere and raw in their portrayals. The "bonus features" on the DVD include a precious interview with the woman who did the original translation, Frances Frazier, who is now in her 90s.
"The True Story of Kaluaikoolau" presented by Ke Kula Ni'ihau O Kekaha Learning Center is available on DVD at the Koke'e Museum and at Native Books at Ward Warehouse and on its Web site, www.nativebookshawaii.com."
http://www.themolokaidispatch.com/node/2499
The True Story of Kaluaikoolau
Wednesday 9-17-08
"Film of Hawaiian heroism presented to Molokai community"
By Catherine Cluett
"This is a true story of Kaluaikoolau , known as Koolau, who lived in Waimea, Kauai with his wife Piilani and their son Kaleimanu in the late 1800’s. After learning he had contracted leprosy in 1892, Koolau was forced by the government to relocate to Molokai.
Families were not allowed to accompany patients, however, and Koolau refused to leave his family. After shooting a sheriff and two Provisional Government officers who tried to arrest him, Koolau and his family escaped together to the remote Kalalau Valley. There they lived peacefully until first Kaleimanu, then Koolau died of the disease. Piilani, after three and a half years of wandering in the wilderness, finally returned to civilization and lived until 1960.
Last Saturday night, members of the Molokai community gathered after a dinner hosted by Pacific American Foundation to watch a movie about Koolau entitled “The True Story of Kaluaikoolau.”
Hiwa Kanahele, now a freshman in college, sang a Hawaiian chant. Haunani Seward, director of the Ke Kula Ni`ihau O Kekaha Learning Center in Kauai, gave an introduction to the movie. It was then the audience learned that Hiwa was the narrator of the film, which was made during her freshman and sophomore years at the school.
The story of Kaluaikoolau as narrated by Piilani was first published in Hawaiian in 1906. In 2001, Frances Frazier translated the story into English, and the book is now widely available in book stores.
In 2004, Seward began making a film of the story. Three students at Ke Kula Ni`ihau O Kekaha acted in the main roles of the film: Cousins Oliwa Kanahele and Kaehu Kanahele play Kalauilooau and Piilani, respectively.
Keoki Strickland acts the part of their son, Kaleimanu. Hiwa Kanahele is the film’s narrator. The film is presented in three languages: the narration is in Standard Hawaiian with English subtitles, and the dialogue is in Ni`ihau dialect, in which all the students are fluent.
The movie was expertly crafted on a shoestring budget of $35,000 with the help of videographer Camera Paik. Funding for the project came primarily from private donors, as well as some grants. The film premiered in 2006 in Kalaupapa, honoring patients of the disease living there.
Ke Kula Ni`ihau O Kekaha Learning Center is a K-12 charter school, and its mission is to strengthen and perpetuate the Ni`ihau dialect, says Seward. Ke Kula Ni`ihau O Kekaha is a native language school, not an immersion program, explains Seward, but its goal is fluency in both languages. Making this film, she adds, was a learning project in which many high school students took part, as well as a way to fulfill the school’s mission."
http://www.nativebookshawaii.com/shop/index.php?main_page=product_info&manufacturers_id=&products_id=3214
DVD The True Story of Kaluaikoolau As Told By His Wife, Piilani - $15.00
Ke Kula Niihau O Kekaha Learning CenterKe Kula Niihau O Kekaha Learning Center dvd, 30min.
"In 1892, after learning that he and his young son had contracted leprosy, Ko`olau fled with his family deep into Kalalau Valley. After the government tried unsuccesfully to bring him back and arrest him, he vowed never to be taken alive and became a powerful symbol of resistance for many Hawaiians in the years following the overthrow of Queen Lili`uokalani. Published in Hawaiian in 1906, this is one of only a handful of historical accounts by a native Hawaiian. Presented in the same language and dialect which were spoken in west Kaua`i during the annexation, this DVD is a rare record of authentic Hawaiian fluency. This is also a student production- students helped to script, act and produce- and proceeds from the film go back to this charter school to benefit the students."
Aloha, Brad
http://www.honoluluadvertiser.com/article/20081026/COLUMNISTS02/810260335/1120/localnewsfront
Sunday, October 26, 2008
"Powerful tale told in Hawaiian"
By Lee Cataluna Advertiser Columnist
"Haunani Seward has seen the movie countless times but it still makes her cry.
The students in the little school where Seward is principal, Ke Kula Ni'ihau O Kekaha Learning Center, spent two years working on "The True Story of Kaluaikoolau." The result is a film entirely in the Hawaiian language — specifically in the Ni'ihau dialect — with English subtitles. It is the language in which the story was first told of the family that would not let anything or anyone tear them apart.
In 1892, after realizing that he had Hansen's disease, Koolau fled with his wife and young son into the wilderness of Kaua'i's Kalalau Valley rather than be arrested by soldiers and sent alone to Kalaupapa on Moloka'i. The child, Kaleimanu, succumbed first to the disease, and Piilani had to bury her boy and then her husband. Through it all, she held tight to her faith in God. After three years of living as an outlaw, Piilani returned to her family in Kekaha. She later told her story to a reporter, and it was first published in the Hawaiian language in 1906.
The story is beautiful and tear-jerking, and the high school students who portray Koolau and Piilani give an amazing emotional performance, but Seward says that's not what brings her to tears:
"I think I'm crying because it was so hard to do."
The two-year project provided the vehicle for many lessons for the students. They studied with botanists to learn about plants the family would have used for food and medicine during their exile. They went on hikes in Koke'e and studied old maps to try to track the family's travels. They discussed the historical context of the story, which happened in the era after the overthrow of the Hawaiian monarchy.
The idea for a film started with a phone call out of the blue. Filmmaker Koohan "Camera" Paik called the school and offered her services as a teacher and mentor.
"I was just saying 10 minutes before she called that I needed a film teacher," Seward said.
Paik came with heavy credentials and a deep love for the story. She spent her childhood on Guam, went to USC Film School and then NYU graduate school, where she studied screenwriting and playwriting. She had a special interest in making films in indigenous languages. She fell in love with Piilani's story and thought it was a perfect learning tool for the students.
"Through the process, I kept deferring to Piilani," Paik said. The script is faithful to Piilani's account of what the family went through. "I would pray to her at night. I wanted to make it exactly the way she would have wanted it."
Ke Kula Ni'ihau O Kekaha is the smallest charter school in the state, with only 45 students in classes from preschool to grade 12. Students learn exclusively in the Hawaiian language, specifically the Ni'ihau dialect, until fourth grade, when English is introduced. Graduates are fluent in both languages.
The story of Koolau held deep meaning for the students. It happened right there in their community. It was first told in their native language. Some of the kids are relatives of the people named in the tale.
The film premiered two years ago in Kalaupapa, Moloka'i, the Hansen's disease settlement. Only the students older than 16 could attend, as children are not allowed to visit Kalaupapa.
"That's when it all came together," Seward said. "There wasn't a dry eye in the house."
Paik said the toughest, most skeptical girl in the school came up to her after the Kalaupapa premiere and said, "It came out good," which she took as effusive praise.
The principal actors in the production have since graduated. The narrator has gone off to college.
But the film has taken on a life of its own.
Seward and Paik still travel to different islands to attend screenings and answer questions. The project was never intended to be a moneymaker or a star vehicle, though it is good enough to be both. Seward wanted her students to go through the long learning journey of finishing such a complicated project. She also wanted to create a DVD in the Ni'ihau dialect. Her school is not an immersion school. The students all speak Hawaiian at home as their first language. It is an indigenous language school, and part of the mission is to perpetuate the Ni'ihau Hawaiian dialect. The film project does just that.
Still, it is film-festival quality work. The care with which historical accuracy was attended to is amazing, and the leads, Oliwa Kanahele, Kaehu Kanahele and Keoki Strickland, are so sincere and raw in their portrayals. The "bonus features" on the DVD include a precious interview with the woman who did the original translation, Frances Frazier, who is now in her 90s.
"The True Story of Kaluaikoolau" presented by Ke Kula Ni'ihau O Kekaha Learning Center is available on DVD at the Koke'e Museum and at Native Books at Ward Warehouse and on its Web site, www.nativebookshawaii.com."
http://www.themolokaidispatch.com/node/2499
The True Story of Kaluaikoolau
Wednesday 9-17-08
"Film of Hawaiian heroism presented to Molokai community"
By Catherine Cluett
"This is a true story of Kaluaikoolau , known as Koolau, who lived in Waimea, Kauai with his wife Piilani and their son Kaleimanu in the late 1800’s. After learning he had contracted leprosy in 1892, Koolau was forced by the government to relocate to Molokai.
Families were not allowed to accompany patients, however, and Koolau refused to leave his family. After shooting a sheriff and two Provisional Government officers who tried to arrest him, Koolau and his family escaped together to the remote Kalalau Valley. There they lived peacefully until first Kaleimanu, then Koolau died of the disease. Piilani, after three and a half years of wandering in the wilderness, finally returned to civilization and lived until 1960.
Last Saturday night, members of the Molokai community gathered after a dinner hosted by Pacific American Foundation to watch a movie about Koolau entitled “The True Story of Kaluaikoolau.”
Hiwa Kanahele, now a freshman in college, sang a Hawaiian chant. Haunani Seward, director of the Ke Kula Ni`ihau O Kekaha Learning Center in Kauai, gave an introduction to the movie. It was then the audience learned that Hiwa was the narrator of the film, which was made during her freshman and sophomore years at the school.
The story of Kaluaikoolau as narrated by Piilani was first published in Hawaiian in 1906. In 2001, Frances Frazier translated the story into English, and the book is now widely available in book stores.
In 2004, Seward began making a film of the story. Three students at Ke Kula Ni`ihau O Kekaha acted in the main roles of the film: Cousins Oliwa Kanahele and Kaehu Kanahele play Kalauilooau and Piilani, respectively.
Keoki Strickland acts the part of their son, Kaleimanu. Hiwa Kanahele is the film’s narrator. The film is presented in three languages: the narration is in Standard Hawaiian with English subtitles, and the dialogue is in Ni`ihau dialect, in which all the students are fluent.
The movie was expertly crafted on a shoestring budget of $35,000 with the help of videographer Camera Paik. Funding for the project came primarily from private donors, as well as some grants. The film premiered in 2006 in Kalaupapa, honoring patients of the disease living there.
Ke Kula Ni`ihau O Kekaha Learning Center is a K-12 charter school, and its mission is to strengthen and perpetuate the Ni`ihau dialect, says Seward. Ke Kula Ni`ihau O Kekaha is a native language school, not an immersion program, explains Seward, but its goal is fluency in both languages. Making this film, she adds, was a learning project in which many high school students took part, as well as a way to fulfill the school’s mission."
http://www.nativebookshawaii.com/shop/index.php?main_page=product_info&manufacturers_id=&products_id=3214
DVD The True Story of Kaluaikoolau As Told By His Wife, Piilani - $15.00
Ke Kula Niihau O Kekaha Learning CenterKe Kula Niihau O Kekaha Learning Center dvd, 30min.
"In 1892, after learning that he and his young son had contracted leprosy, Ko`olau fled with his family deep into Kalalau Valley. After the government tried unsuccesfully to bring him back and arrest him, he vowed never to be taken alive and became a powerful symbol of resistance for many Hawaiians in the years following the overthrow of Queen Lili`uokalani. Published in Hawaiian in 1906, this is one of only a handful of historical accounts by a native Hawaiian. Presented in the same language and dialect which were spoken in west Kaua`i during the annexation, this DVD is a rare record of authentic Hawaiian fluency. This is also a student production- students helped to script, act and produce- and proceeds from the film go back to this charter school to benefit the students."
Aloha, Brad
Review of the Polls 10/27/08
From reviewing: http://www.realclearpolitics.com/epolls/2008/president/us/general_election_mccain_vs_obama-225.html#polls
A few telling points stand out.
First, Obama now leads in every single national poll in the country.
Second, Only 1 major state in population solidly supports McCain over Obama, it is Texas.
Third, Almost all of the toss-up states are leaning toward Obama.
Fourth, McCain's majority support is now really only in the Deep South, Central Plains, and Mountain states. All of the rest of the higher population regions of the country supports Obama.
It should be pretty clear what the dynamic is in the Deep South, Central Plains, and Mountain states. Some things seem to never change.
Aloha, Brad
A few telling points stand out.
First, Obama now leads in every single national poll in the country.
Second, Only 1 major state in population solidly supports McCain over Obama, it is Texas.
Third, Almost all of the toss-up states are leaning toward Obama.
Fourth, McCain's majority support is now really only in the Deep South, Central Plains, and Mountain states. All of the rest of the higher population regions of the country supports Obama.
It should be pretty clear what the dynamic is in the Deep South, Central Plains, and Mountain states. Some things seem to never change.
Aloha, Brad
Kauai Newsletter, October 2008
This is the best monthly Kauai Newsletter I have seen for detail and accuracy. From: http://www.silverpalmproperties.com/newsletter.html
Kauai Newsletter
October, 2008
Aloha from the Garden Island!
Around and around and around we go
Where the world's headed, nobody knows
Politicians say, 'More taxes will solve everything!'
And the band plays on.
-- Selective paraphrasing from 'Ball of Confusion' by Norman Whitfield and Barret Strong, 1968
Topic of the Hour -- Real Estate
We live in interesting times.
The housing boom is bust, banks are being forced-fed cash and are still afraid of lending, interest rates are bouncing around like Mexican jumping beans, and the whole world is headed for, if not already in, a recession.
Feeling stressed out? You might want to head to Kauai, where it's peaceful and beautiful, and our traffic jams have pretty much disappeared.
While you're here, you might want to consider buying a get-away-from-it-all property. With too many sellers and too few buyers, Kauai is having an island-wide special markdown sale. Think I'm joking? Take a look at the statistics:
In July, the number of home sales was down 9 percent over July of the previous year, condo sales were down 44 percent, and land sales down 41 percent.
In August, these figures were down 29 percent for homes, 71 percent for condos, and 56 percent for land.
In September, 42 percent down for homes, 60 percent for condos, and 50 percent for land.
Now, what do you think has happened to prices, with demand down so dramatically?
In July, down 10 percent for homes, 24 percent for condos, and 4 percent for land.
In August, down 15 percent for homes, 49 percent for condos, and 55 percent for land.
In September, down 22 percent for homes, 16 percent for condos, and 9 percent for land.
And the trend continues, with ever-accumulating inventory putting further pressure on prices every day.
Let's not forget about tourism -- down 14 percent in June, 14 percent again in July, and 17 percent in August. September figures aren't available yet, but as a resident, I can tell you it was a quiet month. With two airlines out of business, fewer cruises, higher airfares, and people worried about the economy, in some ways it's surprising that these figures aren't even worse. In fact, the numbers may go down as people plan their vacations in the post-financial meltdown era.
How long will this trend last? That's the key question that has sellers biting their nails as buyers sit on the fence, biding their time, waiting for the ice to crack.
We are starting to see some fissures, and they are mostly at the lower end of the market. That's where most of the short sales, distress sales, and bank-owned property are, and where mainland buyers are most likely to succeed in making a good deal, and many are doing just that. At this end of the market, California has turned around, and many of our buyers are from California.
At the other end of the market, the high-end multi-million-dollar properties are holding up just fine, in contrast to what I've read and heard about other states. Still selling, and at record prices in Kauai. We've had 5 sales at prices above $5 million so far this year, including a $7.7 million beach house, a $6.7 million north shore ranch, and a 5-acre commercial-zoned parcel in Koloa that sold for $7 million - $750,000 above the asking price. Apparently there are people at the top of the food chain who already made their money before the financial picture went awry, and what better place to put it now than prime resort real estate? The mountains, the sea, the recurring fragrant blossoms on flowering trees, those things, unlike a 401-k account, will never disappear. And they're more fun to own. It's also interesting to note that developers have strong faith in the future commercial development of Kauai.
The high end accounts for a good deal of our sales volume. But in terms of number of properties, this is a small segment of the market.
Where the next big move is likely to occur is in the vast middle -- in resort areas, the properties in the $400,000 to $2 million range. That's where the pressure is on. Despite daily price reductions, most of these properties are just not selling.
For example, on the north shore, from the Kula School area on the eastern border through Kilauea, Princeville, Hanalei, and Haena, there are 193 homes listed for sale, priced from $440,000 to $20 million. But only 56 homes in this region have sold so far this year, which represents less than 30 percent of the current total. While some of these property owners bought before the boom and can just take their home off the market if it doesn't sell, others need to sell. This market will reach its equilibrium, we just don't know when or where. The north shore condo market is even more congested. It has the feeling of popcorn in the popper in that long phase where you don't hear anything and you start to wonder, did I plug it in? And then it all pops at once.
We don't know yet how far away that moment is. Buyers and sellers hate uncertainty, and right now no one is certain how the bailout plan will work out, how the election will turn out, or how long the mainland real estate market that ours depends on will suffer. It is certainly possible that values will decline further. But one thing I have noticed is that people are more afraid of the unknown than the known, no matter how bad the known may be, and it affects their real estate decisions. Periods of uncertainty provide the most flexibility in deal making. If you've been waiting to buy property here, you may want to consider putting in an offer at this time. Sellers may be more flexible than you think.
Fancy New Digs, Eats on the North Shore
Another place you can pick up a bargain right now is at the Princeville Hotel. It closed September 19 for a bogglesome $60 million renovation. It will emerge from the metamorphosis as a St. Regis, supposedly after seven months, but it seems like it will take longer than that for all the work that needs to be done. They will re-do all 252 rooms and all the meeting rooms, the lobby, the pool, the restaurants, everything, and add a luxury spa. The new look will be a marked turn away from the grand old European style it had to a more contemporary Hawaiian and Asian look.
In the meantime, you can enter the cocoon and purchase the old furnishings and artwork at super-low liquidation sale prices. They will sell off everything until it's gone. Artwork, rugs, kitchenware, linens and towels, furniture -- it's been a boon to homeowners in the area, and a lot of the furnishings are also perfect for vacation rentals. If you're planning a trip, you should check it out. In the meantime, you can see some of the goods on this website: http://www.nclsales.com/PrincevilleResort.html
The hotel isn't the only place on the north shore getting a face lift. Quintus Resorts has sold its management business of Hanalei Bay Resort to Celebrity Resorts of Orlando. The sale comes after a shaky period several months ago when Quintus was low on cash and had to lay off workers and close the restaurant because it couldn't pay its bills. The restaurant and bar business has now been acquired by the owners of Hanalei's popular BarAcuda, which is in the process of renovating it with plans to open sometime in 2009.
Princeville Reveals Master Plan
In a surprising change of attitude, secretive Princeville Corporation has revealed an outline of its master plan for hundreds of acres of undeveloped land it owns on the north shore. In Hanalei, they plan to expand the taro field. There is also a plan to locate 8 to 12 acres and dedicate it as a wetland preserve.
The main plan is a study in underdevelopment. It calls for a true agricultural subdivision with 17 lots ranging from 10 to 30 acres each. They certainly could have called for the density to be much greater if they had wanted to. But they are also doubtless aware of the strong anti-development sentiment on the part of the local government and many residents.
The land in question lies east of the highway between the existing gates of Princeville and Anini Vista, past the Prince Clubhouse and Spa. Because the soil is depleted and no longer good for agriculture (they've tested it), instead of growing crops, the lot owners will be required to devote one-half to one-third of their land to cattle grazing. There will be strict design guidelines regarding energy use, with water catchment systems and native landscaping plants used in order to create a sustainable development. That's a popular buzzword these days, and a concept that could well attract upper echelon buyers from the west coast , as well as appealing to local taste.. Nothing is for sale yet, though, and Princeville announced its plans before the current financial situation became evident. They are mum on timing and pricing for now. Let me know if you'd like to follow this development.
New Safeway, New Retail Center
Safeway also has big plans, and in contrast to Princeville is very open about them. The grocery chain has long wanted a second store on Kauai, and is now planning not just a new Safeway, but 220,000-square-foot retail center to accompany it on 22 acres of former sugar cane land in Lihue. Assuming it gets its permits, Hokulei Village, as the project is called, will include several retail shops, two or three restaurants, and two 'junior anchor' stores selling clothes, electronics, sporting goods, or books. A gas station could also be in the works. The grocery store will be a 'lifestyle Safeway,' with an emphasis on organic and locally grown produce and prepared foods. The new complex is projected to open in the summer of 2010.
The End of Big Sugar ... Is Big Ethanol Next?
After suffering multi-million-dollar losses over the past several years, Kauai's last sugar company, Gay & Robinson, will harvest its last sugar cane in 2010. Taking its place will be an ethanol plant, which will lease the land from G&R. The company, which dates back to 1889, was a giant part of Kauai's economy in the late 19th and 20th century, when the sugar industry was responsible for more than a third of all the state's jobs. But a global economy and cheaper labor in other parts of the world changed everything. By 2006, the company was losing $8 to $12 million a year, and sugar was responsible for just .4 percent of the state's jobs. After Gay & Robinson stops production, Alexander & Baldwin in Maui will be the only sugar company left in the state -- assuming they continue their own operations.
The ethanol plant will produce 15 million gallons of ethanol a year and 20 to 30 megawatts of power from bagasse, a byproduct in sugar production. Sugar-based ethanol is supposed to be more efficient than corn-based. In 2006, Hawaii passed a law that requires gasoline sold in the state to contain at least 10 percent ethanol. The new plant should supply about 35 percent of the state's use.
Sports
The polo ponies didn't go thundering across the Anini Beach fields last summer, and unless someone comes up with the funding to keep the sport alive, they may be gone for good. Polo in Kauai goes back almost as far as Big Sugar, though its history is more tumultuous. But the Kauai Polo Club in Anini has been hosting matches since 1982.This year, however, several members retired, including player Ron Bonaguidi, who owned most of the horses and paid most of the expenses. Club members queried the U.S. Polo Association to find donors, but came up empty handed. The fields are still being maintained in the hope that a white knight will appear.
No word on whether that will happen, but in the meantime, plans for another sporting event are, ahem, afoot. A California runner who owns property in Kauai has gotten together with a Hawaii event promoter to create a Kauai marathon. The promoters hope to attract 1,500 participants to the first race next September. A half-marathon will also be held. The races will be held on the island's south side, for some reason. Hope they don't keel over from heat prostration! After the courses are certified, they will be open for registration. Please see www.thekauaimarathon.com for up-to-date information.
Goodbye for now. If you're planning a trip to the island, give me a call. I'd love to hear from you and catch you up on the market and the latest island news.
With warmest aloha,
Teresa
Teresa Meek, RA
Century 21 All Islands
5-4280 Kuhio Hwy., Suite B5
Princeville, Hawaii 96722
(808) 651-5131 direct
(808) 240-2443 office
www.SilverPalmProperties.com
Aloha, Brad
Kauai Newsletter
October, 2008
Aloha from the Garden Island!
Around and around and around we go
Where the world's headed, nobody knows
Politicians say, 'More taxes will solve everything!'
And the band plays on.
-- Selective paraphrasing from 'Ball of Confusion' by Norman Whitfield and Barret Strong, 1968
Topic of the Hour -- Real Estate
We live in interesting times.
The housing boom is bust, banks are being forced-fed cash and are still afraid of lending, interest rates are bouncing around like Mexican jumping beans, and the whole world is headed for, if not already in, a recession.
Feeling stressed out? You might want to head to Kauai, where it's peaceful and beautiful, and our traffic jams have pretty much disappeared.
While you're here, you might want to consider buying a get-away-from-it-all property. With too many sellers and too few buyers, Kauai is having an island-wide special markdown sale. Think I'm joking? Take a look at the statistics:
In July, the number of home sales was down 9 percent over July of the previous year, condo sales were down 44 percent, and land sales down 41 percent.
In August, these figures were down 29 percent for homes, 71 percent for condos, and 56 percent for land.
In September, 42 percent down for homes, 60 percent for condos, and 50 percent for land.
Now, what do you think has happened to prices, with demand down so dramatically?
In July, down 10 percent for homes, 24 percent for condos, and 4 percent for land.
In August, down 15 percent for homes, 49 percent for condos, and 55 percent for land.
In September, down 22 percent for homes, 16 percent for condos, and 9 percent for land.
And the trend continues, with ever-accumulating inventory putting further pressure on prices every day.
Let's not forget about tourism -- down 14 percent in June, 14 percent again in July, and 17 percent in August. September figures aren't available yet, but as a resident, I can tell you it was a quiet month. With two airlines out of business, fewer cruises, higher airfares, and people worried about the economy, in some ways it's surprising that these figures aren't even worse. In fact, the numbers may go down as people plan their vacations in the post-financial meltdown era.
How long will this trend last? That's the key question that has sellers biting their nails as buyers sit on the fence, biding their time, waiting for the ice to crack.
We are starting to see some fissures, and they are mostly at the lower end of the market. That's where most of the short sales, distress sales, and bank-owned property are, and where mainland buyers are most likely to succeed in making a good deal, and many are doing just that. At this end of the market, California has turned around, and many of our buyers are from California.
At the other end of the market, the high-end multi-million-dollar properties are holding up just fine, in contrast to what I've read and heard about other states. Still selling, and at record prices in Kauai. We've had 5 sales at prices above $5 million so far this year, including a $7.7 million beach house, a $6.7 million north shore ranch, and a 5-acre commercial-zoned parcel in Koloa that sold for $7 million - $750,000 above the asking price. Apparently there are people at the top of the food chain who already made their money before the financial picture went awry, and what better place to put it now than prime resort real estate? The mountains, the sea, the recurring fragrant blossoms on flowering trees, those things, unlike a 401-k account, will never disappear. And they're more fun to own. It's also interesting to note that developers have strong faith in the future commercial development of Kauai.
The high end accounts for a good deal of our sales volume. But in terms of number of properties, this is a small segment of the market.
Where the next big move is likely to occur is in the vast middle -- in resort areas, the properties in the $400,000 to $2 million range. That's where the pressure is on. Despite daily price reductions, most of these properties are just not selling.
For example, on the north shore, from the Kula School area on the eastern border through Kilauea, Princeville, Hanalei, and Haena, there are 193 homes listed for sale, priced from $440,000 to $20 million. But only 56 homes in this region have sold so far this year, which represents less than 30 percent of the current total. While some of these property owners bought before the boom and can just take their home off the market if it doesn't sell, others need to sell. This market will reach its equilibrium, we just don't know when or where. The north shore condo market is even more congested. It has the feeling of popcorn in the popper in that long phase where you don't hear anything and you start to wonder, did I plug it in? And then it all pops at once.
We don't know yet how far away that moment is. Buyers and sellers hate uncertainty, and right now no one is certain how the bailout plan will work out, how the election will turn out, or how long the mainland real estate market that ours depends on will suffer. It is certainly possible that values will decline further. But one thing I have noticed is that people are more afraid of the unknown than the known, no matter how bad the known may be, and it affects their real estate decisions. Periods of uncertainty provide the most flexibility in deal making. If you've been waiting to buy property here, you may want to consider putting in an offer at this time. Sellers may be more flexible than you think.
Fancy New Digs, Eats on the North Shore
Another place you can pick up a bargain right now is at the Princeville Hotel. It closed September 19 for a bogglesome $60 million renovation. It will emerge from the metamorphosis as a St. Regis, supposedly after seven months, but it seems like it will take longer than that for all the work that needs to be done. They will re-do all 252 rooms and all the meeting rooms, the lobby, the pool, the restaurants, everything, and add a luxury spa. The new look will be a marked turn away from the grand old European style it had to a more contemporary Hawaiian and Asian look.
In the meantime, you can enter the cocoon and purchase the old furnishings and artwork at super-low liquidation sale prices. They will sell off everything until it's gone. Artwork, rugs, kitchenware, linens and towels, furniture -- it's been a boon to homeowners in the area, and a lot of the furnishings are also perfect for vacation rentals. If you're planning a trip, you should check it out. In the meantime, you can see some of the goods on this website: http://www.nclsales.com/PrincevilleResort.html
The hotel isn't the only place on the north shore getting a face lift. Quintus Resorts has sold its management business of Hanalei Bay Resort to Celebrity Resorts of Orlando. The sale comes after a shaky period several months ago when Quintus was low on cash and had to lay off workers and close the restaurant because it couldn't pay its bills. The restaurant and bar business has now been acquired by the owners of Hanalei's popular BarAcuda, which is in the process of renovating it with plans to open sometime in 2009.
Princeville Reveals Master Plan
In a surprising change of attitude, secretive Princeville Corporation has revealed an outline of its master plan for hundreds of acres of undeveloped land it owns on the north shore. In Hanalei, they plan to expand the taro field. There is also a plan to locate 8 to 12 acres and dedicate it as a wetland preserve.
The main plan is a study in underdevelopment. It calls for a true agricultural subdivision with 17 lots ranging from 10 to 30 acres each. They certainly could have called for the density to be much greater if they had wanted to. But they are also doubtless aware of the strong anti-development sentiment on the part of the local government and many residents.
The land in question lies east of the highway between the existing gates of Princeville and Anini Vista, past the Prince Clubhouse and Spa. Because the soil is depleted and no longer good for agriculture (they've tested it), instead of growing crops, the lot owners will be required to devote one-half to one-third of their land to cattle grazing. There will be strict design guidelines regarding energy use, with water catchment systems and native landscaping plants used in order to create a sustainable development. That's a popular buzzword these days, and a concept that could well attract upper echelon buyers from the west coast , as well as appealing to local taste.. Nothing is for sale yet, though, and Princeville announced its plans before the current financial situation became evident. They are mum on timing and pricing for now. Let me know if you'd like to follow this development.
New Safeway, New Retail Center
Safeway also has big plans, and in contrast to Princeville is very open about them. The grocery chain has long wanted a second store on Kauai, and is now planning not just a new Safeway, but 220,000-square-foot retail center to accompany it on 22 acres of former sugar cane land in Lihue. Assuming it gets its permits, Hokulei Village, as the project is called, will include several retail shops, two or three restaurants, and two 'junior anchor' stores selling clothes, electronics, sporting goods, or books. A gas station could also be in the works. The grocery store will be a 'lifestyle Safeway,' with an emphasis on organic and locally grown produce and prepared foods. The new complex is projected to open in the summer of 2010.
The End of Big Sugar ... Is Big Ethanol Next?
After suffering multi-million-dollar losses over the past several years, Kauai's last sugar company, Gay & Robinson, will harvest its last sugar cane in 2010. Taking its place will be an ethanol plant, which will lease the land from G&R. The company, which dates back to 1889, was a giant part of Kauai's economy in the late 19th and 20th century, when the sugar industry was responsible for more than a third of all the state's jobs. But a global economy and cheaper labor in other parts of the world changed everything. By 2006, the company was losing $8 to $12 million a year, and sugar was responsible for just .4 percent of the state's jobs. After Gay & Robinson stops production, Alexander & Baldwin in Maui will be the only sugar company left in the state -- assuming they continue their own operations.
The ethanol plant will produce 15 million gallons of ethanol a year and 20 to 30 megawatts of power from bagasse, a byproduct in sugar production. Sugar-based ethanol is supposed to be more efficient than corn-based. In 2006, Hawaii passed a law that requires gasoline sold in the state to contain at least 10 percent ethanol. The new plant should supply about 35 percent of the state's use.
Sports
The polo ponies didn't go thundering across the Anini Beach fields last summer, and unless someone comes up with the funding to keep the sport alive, they may be gone for good. Polo in Kauai goes back almost as far as Big Sugar, though its history is more tumultuous. But the Kauai Polo Club in Anini has been hosting matches since 1982.This year, however, several members retired, including player Ron Bonaguidi, who owned most of the horses and paid most of the expenses. Club members queried the U.S. Polo Association to find donors, but came up empty handed. The fields are still being maintained in the hope that a white knight will appear.
No word on whether that will happen, but in the meantime, plans for another sporting event are, ahem, afoot. A California runner who owns property in Kauai has gotten together with a Hawaii event promoter to create a Kauai marathon. The promoters hope to attract 1,500 participants to the first race next September. A half-marathon will also be held. The races will be held on the island's south side, for some reason. Hope they don't keel over from heat prostration! After the courses are certified, they will be open for registration. Please see www.thekauaimarathon.com for up-to-date information.
Goodbye for now. If you're planning a trip to the island, give me a call. I'd love to hear from you and catch you up on the market and the latest island news.
With warmest aloha,
Teresa
Teresa Meek, RA
Century 21 All Islands
5-4280 Kuhio Hwy., Suite B5
Princeville, Hawaii 96722
(808) 651-5131 direct
(808) 240-2443 office
www.SilverPalmProperties.com
Aloha, Brad
Monday, October 27, 2008
Great Article on the Center of the Crisis -- CDS's
This lady, Ellen Brown, JD, does some great writing:
http://www.webofdebt.com/articles/derivative-disaster.php
"CREDIT DEFAULT SWAPS: DERIVATIVE DISASTER DU JOUR"
Ellen Brown, April 10th, 2008
"When the smartest guys in the room designed their credit default swaps, they forgot to ask one thing – what if the parties on the other side of the bet don't have the money to pay up? Credit default swaps (CDS) are insurance-like contracts that are sold as protection against default on loans, but CDS are not ordinary insurance. Insurance companies are regulated by the government, with reserve requirements, statutory limits, and examiners routinely showing up to check the books to make sure the money is there to cover potential claims. CDS are private bets, and the Federal Reserve from the time of Alan Greenspan has insisted that regulators keep hands off. The sacrosanct free market would supposedly regulate itself. The problem with that approach is that regulations are just rules. If there are no rules, the players can cheat; and cheat they have, with a gambler's addiction. In December 2007, the Bank for International Settlements reported derivative trades tallying in at $681 trillion – ten times the gross domestic product of all the countries in the world combined. Somebody is obviously bluffing about the money being brought to the game, and that realization has made for some very jittery markets.
"Derivatives" are complex bank creations that are very hard to understand, but the basic idea is that you can insure an investment you want to go up by betting it will go down. The simplest form of derivative is a short sale: you can place a bet that some asset you own will go down, so that you are covered whichever way the asset moves. Credit default swaps are the most widely traded form of credit derivative. They are bets between two parties on whether or not a company will default on its bonds. In a typical default swap, the "protection buyer" gets a large payoff if the company defaults within a certain period of time, while the "protection seller" collects periodic payments for assuming the risk of default. CDS thus resemble insurance policies, but there is no requirement to actually hold any asset or suffer any loss, so CDS are widely used just to speculate on market changes. In one blogger's example, a hedge fund wanting to increase its profits could sit back and collect $320,000 a year in premiums just for selling "protection" on a risky BBB junk bond. The premiums are "free" money – free until the bond actually goes into default, when the hedge fund could be on the hook for $100 million in claims. And there's the catch: what if the hedge fund doesn't have the $100 million? The fund's corporate shell or limited partnership is put into bankruptcy, but that hardly helps the "protection buyers" who thought they were covered.
To the extent that CDS are being sold as "insurance," they are looking more like insurance fraud; and that fact has particularly hit home with the ratings downgrades of the "monoline" insurers and the recent collapse of Bear Stearns, a leading Wall Street investment brokerage. The monolines are so-called because they are allowed to insure only one industry, the bond industry. Monoline bond insurers are the biggest protection writers for CDS, and Bear Stearns was the twelfth largest counterparty to credit default swap trades in 2006.1 These players have been major protection sellers in a massive web of credit default swaps, and when the "protection" goes, the whole fragile derivative pyramid will go with it. The collapse of the derivative monster thus appears to be both imminent and inevitable, but that fact need not be cause for despair. The $681 trillion derivatives trade is the last supersized bubble in a 300-year Ponzi scheme, one that has now taken over the entire monetary system. The nation's wealth has been drained into private vaults, leaving scarcity in its wake. It is a corrupt system, and change is long overdue. Major crises are major opportunities for change.
The Wall Street Ponzi Scheme
The Ponzi scheme that has gone bad is not just another misguided investment strategy. It is at the very heart of the banking business, the thing that has propped it up over the course of three centuries. A Ponzi scheme is a form of pyramid scheme in which new investors must continually be sucked in at the bottom to support the investors at the top. In this case, new borrowers must continually be sucked in to support the creditors at the top. The Wall Street Ponzi scheme is built on "fractional reserve" lending, which allows banks to create "credit" (or "debt") with accounting entries. Banks are now allowed to lend from 10 to 30 times their "reserves," essentially counterfeiting the money they lend. Over 97 percent of the U.S. money supply (M3) has been created by banks in this way.2 The problem is that banks create only the principal and not the interest necessary to pay back their loans, so new borrowers must continually be found to take out new loans just to create enough "money" (or "credit") to service the old loans composing the money supply. The scramble to find new debtors has now gone on for over 300 years – ever since the founding of the Bank of England in 1694 – until the whole world has become mired in debt to the bankers' private money monopoly. The Ponzi scheme has finally reached its mathematical limits: we are "all borrowed up."
When the banks ran out of creditworthy borrowers, they had to turn to uncreditworthy "subprime" borrowers; and to avoid losses from default, they moved these risky mortgages off their books by bundling them into "securities" and selling them to investors. To induce investors to buy, these securities were then "insured" with credit default swaps. But the housing bubble itself was another Ponzi scheme, and eventually there were no more borrowers to be sucked in at the bottom who could afford the ever-inflating home prices. When the subprime borrowers quit paying, the investors quit buying mortgage-backed securities. The banks were then left holding their own suspect paper; and without triple-A ratings, there is little chance that buyers for this "junk" will be found. The crisis is not, however, in the economy itself, which is fundamentally sound – or would be with a proper credit system to oil the wheels of production. The crisis is in the banking system, which can no longer cover up the shell game it has played for three centuries with other people's money.
The Derivatives Chernobyl
The latest jolt to the massive derivatives edifice came with the collapse of Bear Stearns on March 16, 2008. Bear Stearns helped fuel the explosive growth in the credit derivative market, where banks, hedge funds and other investors have engaged in $45 trillion worth of bets on the credit-worthiness of companies and countries. Before it collapsed, Bear was the counterparty to $13 trillion in derivative trades. On March 14, 2008, Bear's ratings were downgraded by Moody's, a major rating agency; and on March 16, the brokerage was bought by JPMorgan for pennies on the dollar, a token buyout designed to avoid the legal complications of bankruptcy. The deal was backed by a $29 billion "non-recourse" loan from the Federal Reserve. "Non-recourse" meant that the Fed got only Bear's shaky paper assets as collateral. If those proved to be worthless, JPM was off the hook. It was an unprecedented move, of questionable legality; but it was said to be justified because, as one headline put it, "Fed's Rescue of Bear Halted Derivatives Chernobyl." The notion either that Bear was "rescued" or that the Chernobyl was halted, however, was grossly misleading. The CEOs managed to salvage their enormous bonuses, but it was a "bailout" only for JPM and Bear's creditors. For the shareholders, it was a wipeout. Their stock initially dropped from $156 to $2, and 30 percent of it was held by the employees. Another big chunk was held by the pension funds of teachers and other public servants. The share price was later raised to $10 a share in response to shareholder outrage, but the shareholders were still essentially wiped out; and the fact that one Wall Street bank had to be fed to the lions to rescue the others hardly inspires a feeling of confidence. Neutron bombs are not so easily contained.
The Bear Stearns hit from the derivatives iceberg followed an earlier one in January, when global markets took their worst tumble since September 11, 2001. Commentators were asking if this was "the big one" – a 1929-style crash; and it probably would have been if deft market manipulations had not swiftly covered over the approaching catastrophe. The precipitous drop was blamed on the threat of downgrades in the ratings of two major monoline insurers, Ambac and MBIA, followed by a $7.2 billion loss in derivative trades by Societe Generale, France's second-largest bank. Like Bear Stearns, the monolines serve as counterparties in a web of credit default swaps, and a downgrade in their ratings would jeopardize the whole shaky derivatives edifice. Without the monoline insurers' traiple-A seal, billions of dollars worth of triple-A investments would revert to junk bonds. Many institutional investors (pension funds, municipal governments and the like) have a fiduciary duty to invest in only the "safest" triple-A bonds. Downgraded bonds therefore get dumped on the market, jeopardizing the banks that are still holding billions of dollars worth of these bonds. The downgrade of Ambac in January signaled a simultaneous downgrade of bonds from over 100,000 municipalities and institutions, totaling more than $500 billion.3
Institutional investors have lost a good deal of money in all this, but the real calamity is to the banks. The institutional investors that formerly bought mortgage-backed bonds stopped buying them in 2007, when the housing market slumped. But the big investment houses that were selling them have billions' worth left on their books, and it is these banks that particularly stand to lose as the derivative Chernobyl implodes.4
A Parade of Bailout Schemes
Now that some highly leveraged banks and hedge funds have had to lay their cards on the table and expose their worthless hands, these avid free marketers are crying out for government intervention to save them from monumental losses, while preserving the monumental gains raked in when their bluff was still good. In response to their pleas, the men behind the curtain have scrambled to devise various bailout schemes; but the schemes have been bandaids at best. To bail out a $681 trillion derivative scheme with taxpayer money is obviously impossible. As Michael Panzer observed on SeekingAlpha.com:
As the slow-motion train wreck in our financial system continues to unfold, there are going to be plenty of ill-conceived rescue attempts and dubious turnaround plans, as well as propagandizing, dissembling and scheming by banks, regulators and politicians. This is all happening in an effort to try and buy time or to figure out how the losses can be dumped onto the lap of some patsy (e.g., the taxpayer).
The idea seems to be to keep the violins playing while the Big Money Boys slip into the mist and man the lifeboats. As was pointed out in a blog called "Jesse's Café Americain" concerning the bailout of Ambac:
It seems that the real heart of the problem is that AMBAC was being used as a "cover" by the banks which originated these bundles of mortgages to get their mispriced ratings. Now that the mortgages are failing and the banks are stuck with them, AMBAC cannot possibly pay, they cannot cover the debt. And the banks don't wish to mark these CDOs [collateralized debt obligations] to market [downgrade them to their real market value] because they are probably at best worth 60 cents on the dollar, but are being held by the banks on balance at roughly par. That's a 40 percent haircut on enough debt to sink every bank involved in this situation . . . . Indeed for all intents and purposes if marked to market banks are now insolvent. So, the banks will provide capital to AMBAC . . . [but] it's just a game of passing money around. . . . So why are the banks engaging in this charade? This looks like an attempt to extend the payouts on a vast Ponzi scheme gone bad that is starting to collapse . . . .5
The banks will therefore no doubt be looking for one bailout after another from the only pocket deeper than their own, the U.S. government's. But if the federal government acquiesces, it too could be dragged into the voracious debt cyclone of the mortgage mess. The federal government's triple A rating is already in jeopardy, due to its gargantuan $9 trillion debt. Before the government agrees to bail out the banks, it should insist on some adequate quid pro quo. In England, the government agreed to bail out bankrupt mortgage bank Northern Rock, but only in return for the bank's stock. On March 31, 2008, The London Daily Telegraph reported that Federal Reserve strategists were eyeing the nationalizations that saved Norway, Sweden and Finland from a banking crisis from 1991 to 1993. In Norway, according to one Norwegian adviser, "The law was amended so that we could take 100 percent control of any bank where its equity had fallen below zero."6 If their assets were "marked to market," some major Wall Street banks could already be in that category.
Benjamin Franklin's Solution
Nationalization has traditionally had a bad name in the United States, but it could be an attractive alternative for the American people and our representative government as well. Turning bankrupt Wall Street banks into public institutions might allow the government to get out of the debt cyclone by undoing what got us into it. Instead of robbing Peter to pay Paul, flapping around in a sea of debt trying to stay afloat by creating more debt, the government could address the problem at its source: it could restore the right to create money to Congress, the public body to which that solemn duty was delegated under the Constitution.
The most brilliant banking model in our national history was established in the first half of the eighteenth century, in Benjamin Franklin's home province of Pennsylvania. The local government created its own bank, which issued money and lent it to farmers at a modest interest. The provincial government created enough extra money to cover the interest not created in the original loans, spending it into the economy on public services. The bank was publicly owned, and the bankers it employed were public servants. T he interest generated on its loans was sufficient to fund the government without taxes; and because the newly issued money came back to the government, the result was not inflationary.7 The Pennsylvania banking scheme was a sensible and highly workable system that was a product of American ingenuity but that never got a chance to prove itself after the colonies became a nation. It was an ironic twist, since according to Benjamin Franklin and others, restoring the power to create their own currency was a chief reason the colonists fought for independence. The bankers' money-creating machine has had two centuries of empirical testing and has proven to be a failure. It is time the sovereign right to create money is taken from a private banking elite and restored to the American people to whom it properly belongs."
___________________
1
"Credit Swap Worries Go Mainstream," nakedcapitalism.com (February 17, 2008); Aline van Duyn, "CDS Sector Weighs Bear Stearns Backlash," Financial Times (London) (March 16, 2008).
2
See Ellen Brown, "Dollar Deception: How Banks Secretly Create Money," webofdebt.com/articles (July 3, 2008).
3
"Monoline Insurance," Wikipedia.
4
Jane Wells, "Ambac and MBIA: Bonds, Jane's Bonds," CNBC (February 4, 2008).
5
"Saving AMBAC, the Homeowners, or the Banks?", Jesse's Café Americain (February 25, 2008).
6
Ambrose Evans-Pritchard, "Fed Eyes Nordic-style Nationalisation of US Banks," International Business Editor (March 31, 2008).
7
See Ellen Brown, Web of Debt (Third Millennium Press, 2008), chapter 3.
http://www.webofdebt.com/articles/derivative-disaster.php
"CREDIT DEFAULT SWAPS: DERIVATIVE DISASTER DU JOUR"
Ellen Brown, April 10th, 2008
"When the smartest guys in the room designed their credit default swaps, they forgot to ask one thing – what if the parties on the other side of the bet don't have the money to pay up? Credit default swaps (CDS) are insurance-like contracts that are sold as protection against default on loans, but CDS are not ordinary insurance. Insurance companies are regulated by the government, with reserve requirements, statutory limits, and examiners routinely showing up to check the books to make sure the money is there to cover potential claims. CDS are private bets, and the Federal Reserve from the time of Alan Greenspan has insisted that regulators keep hands off. The sacrosanct free market would supposedly regulate itself. The problem with that approach is that regulations are just rules. If there are no rules, the players can cheat; and cheat they have, with a gambler's addiction. In December 2007, the Bank for International Settlements reported derivative trades tallying in at $681 trillion – ten times the gross domestic product of all the countries in the world combined. Somebody is obviously bluffing about the money being brought to the game, and that realization has made for some very jittery markets.
"Derivatives" are complex bank creations that are very hard to understand, but the basic idea is that you can insure an investment you want to go up by betting it will go down. The simplest form of derivative is a short sale: you can place a bet that some asset you own will go down, so that you are covered whichever way the asset moves. Credit default swaps are the most widely traded form of credit derivative. They are bets between two parties on whether or not a company will default on its bonds. In a typical default swap, the "protection buyer" gets a large payoff if the company defaults within a certain period of time, while the "protection seller" collects periodic payments for assuming the risk of default. CDS thus resemble insurance policies, but there is no requirement to actually hold any asset or suffer any loss, so CDS are widely used just to speculate on market changes. In one blogger's example, a hedge fund wanting to increase its profits could sit back and collect $320,000 a year in premiums just for selling "protection" on a risky BBB junk bond. The premiums are "free" money – free until the bond actually goes into default, when the hedge fund could be on the hook for $100 million in claims. And there's the catch: what if the hedge fund doesn't have the $100 million? The fund's corporate shell or limited partnership is put into bankruptcy, but that hardly helps the "protection buyers" who thought they were covered.
To the extent that CDS are being sold as "insurance," they are looking more like insurance fraud; and that fact has particularly hit home with the ratings downgrades of the "monoline" insurers and the recent collapse of Bear Stearns, a leading Wall Street investment brokerage. The monolines are so-called because they are allowed to insure only one industry, the bond industry. Monoline bond insurers are the biggest protection writers for CDS, and Bear Stearns was the twelfth largest counterparty to credit default swap trades in 2006.1 These players have been major protection sellers in a massive web of credit default swaps, and when the "protection" goes, the whole fragile derivative pyramid will go with it. The collapse of the derivative monster thus appears to be both imminent and inevitable, but that fact need not be cause for despair. The $681 trillion derivatives trade is the last supersized bubble in a 300-year Ponzi scheme, one that has now taken over the entire monetary system. The nation's wealth has been drained into private vaults, leaving scarcity in its wake. It is a corrupt system, and change is long overdue. Major crises are major opportunities for change.
The Wall Street Ponzi Scheme
The Ponzi scheme that has gone bad is not just another misguided investment strategy. It is at the very heart of the banking business, the thing that has propped it up over the course of three centuries. A Ponzi scheme is a form of pyramid scheme in which new investors must continually be sucked in at the bottom to support the investors at the top. In this case, new borrowers must continually be sucked in to support the creditors at the top. The Wall Street Ponzi scheme is built on "fractional reserve" lending, which allows banks to create "credit" (or "debt") with accounting entries. Banks are now allowed to lend from 10 to 30 times their "reserves," essentially counterfeiting the money they lend. Over 97 percent of the U.S. money supply (M3) has been created by banks in this way.2 The problem is that banks create only the principal and not the interest necessary to pay back their loans, so new borrowers must continually be found to take out new loans just to create enough "money" (or "credit") to service the old loans composing the money supply. The scramble to find new debtors has now gone on for over 300 years – ever since the founding of the Bank of England in 1694 – until the whole world has become mired in debt to the bankers' private money monopoly. The Ponzi scheme has finally reached its mathematical limits: we are "all borrowed up."
When the banks ran out of creditworthy borrowers, they had to turn to uncreditworthy "subprime" borrowers; and to avoid losses from default, they moved these risky mortgages off their books by bundling them into "securities" and selling them to investors. To induce investors to buy, these securities were then "insured" with credit default swaps. But the housing bubble itself was another Ponzi scheme, and eventually there were no more borrowers to be sucked in at the bottom who could afford the ever-inflating home prices. When the subprime borrowers quit paying, the investors quit buying mortgage-backed securities. The banks were then left holding their own suspect paper; and without triple-A ratings, there is little chance that buyers for this "junk" will be found. The crisis is not, however, in the economy itself, which is fundamentally sound – or would be with a proper credit system to oil the wheels of production. The crisis is in the banking system, which can no longer cover up the shell game it has played for three centuries with other people's money.
The Derivatives Chernobyl
The latest jolt to the massive derivatives edifice came with the collapse of Bear Stearns on March 16, 2008. Bear Stearns helped fuel the explosive growth in the credit derivative market, where banks, hedge funds and other investors have engaged in $45 trillion worth of bets on the credit-worthiness of companies and countries. Before it collapsed, Bear was the counterparty to $13 trillion in derivative trades. On March 14, 2008, Bear's ratings were downgraded by Moody's, a major rating agency; and on March 16, the brokerage was bought by JPMorgan for pennies on the dollar, a token buyout designed to avoid the legal complications of bankruptcy. The deal was backed by a $29 billion "non-recourse" loan from the Federal Reserve. "Non-recourse" meant that the Fed got only Bear's shaky paper assets as collateral. If those proved to be worthless, JPM was off the hook. It was an unprecedented move, of questionable legality; but it was said to be justified because, as one headline put it, "Fed's Rescue of Bear Halted Derivatives Chernobyl." The notion either that Bear was "rescued" or that the Chernobyl was halted, however, was grossly misleading. The CEOs managed to salvage their enormous bonuses, but it was a "bailout" only for JPM and Bear's creditors. For the shareholders, it was a wipeout. Their stock initially dropped from $156 to $2, and 30 percent of it was held by the employees. Another big chunk was held by the pension funds of teachers and other public servants. The share price was later raised to $10 a share in response to shareholder outrage, but the shareholders were still essentially wiped out; and the fact that one Wall Street bank had to be fed to the lions to rescue the others hardly inspires a feeling of confidence. Neutron bombs are not so easily contained.
The Bear Stearns hit from the derivatives iceberg followed an earlier one in January, when global markets took their worst tumble since September 11, 2001. Commentators were asking if this was "the big one" – a 1929-style crash; and it probably would have been if deft market manipulations had not swiftly covered over the approaching catastrophe. The precipitous drop was blamed on the threat of downgrades in the ratings of two major monoline insurers, Ambac and MBIA, followed by a $7.2 billion loss in derivative trades by Societe Generale, France's second-largest bank. Like Bear Stearns, the monolines serve as counterparties in a web of credit default swaps, and a downgrade in their ratings would jeopardize the whole shaky derivatives edifice. Without the monoline insurers' traiple-A seal, billions of dollars worth of triple-A investments would revert to junk bonds. Many institutional investors (pension funds, municipal governments and the like) have a fiduciary duty to invest in only the "safest" triple-A bonds. Downgraded bonds therefore get dumped on the market, jeopardizing the banks that are still holding billions of dollars worth of these bonds. The downgrade of Ambac in January signaled a simultaneous downgrade of bonds from over 100,000 municipalities and institutions, totaling more than $500 billion.3
Institutional investors have lost a good deal of money in all this, but the real calamity is to the banks. The institutional investors that formerly bought mortgage-backed bonds stopped buying them in 2007, when the housing market slumped. But the big investment houses that were selling them have billions' worth left on their books, and it is these banks that particularly stand to lose as the derivative Chernobyl implodes.4
A Parade of Bailout Schemes
Now that some highly leveraged banks and hedge funds have had to lay their cards on the table and expose their worthless hands, these avid free marketers are crying out for government intervention to save them from monumental losses, while preserving the monumental gains raked in when their bluff was still good. In response to their pleas, the men behind the curtain have scrambled to devise various bailout schemes; but the schemes have been bandaids at best. To bail out a $681 trillion derivative scheme with taxpayer money is obviously impossible. As Michael Panzer observed on SeekingAlpha.com:
As the slow-motion train wreck in our financial system continues to unfold, there are going to be plenty of ill-conceived rescue attempts and dubious turnaround plans, as well as propagandizing, dissembling and scheming by banks, regulators and politicians. This is all happening in an effort to try and buy time or to figure out how the losses can be dumped onto the lap of some patsy (e.g., the taxpayer).
The idea seems to be to keep the violins playing while the Big Money Boys slip into the mist and man the lifeboats. As was pointed out in a blog called "Jesse's Café Americain" concerning the bailout of Ambac:
It seems that the real heart of the problem is that AMBAC was being used as a "cover" by the banks which originated these bundles of mortgages to get their mispriced ratings. Now that the mortgages are failing and the banks are stuck with them, AMBAC cannot possibly pay, they cannot cover the debt. And the banks don't wish to mark these CDOs [collateralized debt obligations] to market [downgrade them to their real market value] because they are probably at best worth 60 cents on the dollar, but are being held by the banks on balance at roughly par. That's a 40 percent haircut on enough debt to sink every bank involved in this situation . . . . Indeed for all intents and purposes if marked to market banks are now insolvent. So, the banks will provide capital to AMBAC . . . [but] it's just a game of passing money around. . . . So why are the banks engaging in this charade? This looks like an attempt to extend the payouts on a vast Ponzi scheme gone bad that is starting to collapse . . . .5
The banks will therefore no doubt be looking for one bailout after another from the only pocket deeper than their own, the U.S. government's. But if the federal government acquiesces, it too could be dragged into the voracious debt cyclone of the mortgage mess. The federal government's triple A rating is already in jeopardy, due to its gargantuan $9 trillion debt. Before the government agrees to bail out the banks, it should insist on some adequate quid pro quo. In England, the government agreed to bail out bankrupt mortgage bank Northern Rock, but only in return for the bank's stock. On March 31, 2008, The London Daily Telegraph reported that Federal Reserve strategists were eyeing the nationalizations that saved Norway, Sweden and Finland from a banking crisis from 1991 to 1993. In Norway, according to one Norwegian adviser, "The law was amended so that we could take 100 percent control of any bank where its equity had fallen below zero."6 If their assets were "marked to market," some major Wall Street banks could already be in that category.
Benjamin Franklin's Solution
Nationalization has traditionally had a bad name in the United States, but it could be an attractive alternative for the American people and our representative government as well. Turning bankrupt Wall Street banks into public institutions might allow the government to get out of the debt cyclone by undoing what got us into it. Instead of robbing Peter to pay Paul, flapping around in a sea of debt trying to stay afloat by creating more debt, the government could address the problem at its source: it could restore the right to create money to Congress, the public body to which that solemn duty was delegated under the Constitution.
The most brilliant banking model in our national history was established in the first half of the eighteenth century, in Benjamin Franklin's home province of Pennsylvania. The local government created its own bank, which issued money and lent it to farmers at a modest interest. The provincial government created enough extra money to cover the interest not created in the original loans, spending it into the economy on public services. The bank was publicly owned, and the bankers it employed were public servants. T he interest generated on its loans was sufficient to fund the government without taxes; and because the newly issued money came back to the government, the result was not inflationary.7 The Pennsylvania banking scheme was a sensible and highly workable system that was a product of American ingenuity but that never got a chance to prove itself after the colonies became a nation. It was an ironic twist, since according to Benjamin Franklin and others, restoring the power to create their own currency was a chief reason the colonists fought for independence. The bankers' money-creating machine has had two centuries of empirical testing and has proven to be a failure. It is time the sovereign right to create money is taken from a private banking elite and restored to the American people to whom it properly belongs."
___________________
1
"Credit Swap Worries Go Mainstream," nakedcapitalism.com (February 17, 2008); Aline van Duyn, "CDS Sector Weighs Bear Stearns Backlash," Financial Times (London) (March 16, 2008).
2
See Ellen Brown, "Dollar Deception: How Banks Secretly Create Money," webofdebt.com/articles (July 3, 2008).
3
"Monoline Insurance," Wikipedia.
4
Jane Wells, "Ambac and MBIA: Bonds, Jane's Bonds," CNBC (February 4, 2008).
5
"Saving AMBAC, the Homeowners, or the Banks?", Jesse's Café Americain (February 25, 2008).
6
Ambrose Evans-Pritchard, "Fed Eyes Nordic-style Nationalisation of US Banks," International Business Editor (March 31, 2008).
7
See Ellen Brown, Web of Debt (Third Millennium Press, 2008), chapter 3.
Report from 7th Asia-Europe Meeting (ASEM) on the Economy
http://news.xinhuanet.com/english/2008-10/26/content_10252340.htm
"7th Asia-Europe meeting concluded with consensus on global financial crisis" 2008-10-26
Special Report (couple of interesting videos here) : The 7th Asia-Europe Meeting
Full text of statement of the Seventh Asia-Europe Meeting on the Int'l Financial Situation
BEIJING, Oct. 25 (Xinhua) -- "The two-day 7th Asia-Europe Meeting (ASEM) was concluded here Saturday with participants reaching consensus on global financial crisis and other issues.
The meeting, attended by leaders and representatives from 45 Asian and European nations and organizations, realized its expected goal and was a great success, Chinese Premier Wen Jiabao said in a closing speech.
As one of the most fruitful achievements, a statement of the 7th ASEM on the international financial situation was adopted at the meeting.
"Leaders believed that authorities of all countries should demonstrate vision and resolution and take firm, decisive and effective measures in a responsible and timely manner to rise to the challenge of the financial crisis," said the statement.
The international community should continue to strengthen coordination and cooperation and take effective and available economic and financial measures in a comprehensive way to restore market confidence, stabilize global financial markets and promote global economic growth, it said.
According to the document, leaders supported the convening of an international summit on Nov. 15 in the United States to address the current crisis and principles of reform of the international financial system.
The summit also adopted a declaration on sustainable development.
"The adoption of various cooperation proposals shows and proves again the interior impetus for strengthening dialogue at the ASEM and great potential for extending cooperation," Wen said.
Amid the global financial turmoil, the ASEM has been widely regarded as an opportunity for Asian and European leaders to find a solution.
French President Nicholas Sarkozy called the meeting very "helpful" for Asia and Europe to tackle the global financial crisis and build up common cause.
"We had discussed nearly all of the topics concerned by the two continents including the most difficult issues," he said at a press conference at the end of the meeting.
Premier Wen told the press conference the need of confidence, cooperation and responsibility to find a solution to the global financial meltdown.
"We are glad to see that many countries have made their efforts and achieved some results. But it is not enough as we now see it, and more endeavors are needed," said Wen.
All countries, especially developed ones, should take measures as soon as possible to stabilize the financial market and build public confidence, he said.
Financial innovation could help develop the economy, but financial supervision is even more important for the security of the financial system, he added.
The premier also declared that China would actively attend the Nov.15 financial summit."
Apparently the following was not a part of the official reports from the 7th Asia-Europe Meeting:
http://www.reuters.com/article/companyNewsAndPR/idUSPEK466920081024
"U.S. has plundered world wealth with dollar - China paper" Fri Oct 24, 2008
BEIJING, Oct 24 (Reuters) - "The United States has plundered global wealth by exploiting the dollar's dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.
The front-page commentary in the overseas edition of the People's Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies..."
Aloha, Brad
"7th Asia-Europe meeting concluded with consensus on global financial crisis" 2008-10-26
Special Report (couple of interesting videos here) : The 7th Asia-Europe Meeting
Full text of statement of the Seventh Asia-Europe Meeting on the Int'l Financial Situation
BEIJING, Oct. 25 (Xinhua) -- "The two-day 7th Asia-Europe Meeting (ASEM) was concluded here Saturday with participants reaching consensus on global financial crisis and other issues.
The meeting, attended by leaders and representatives from 45 Asian and European nations and organizations, realized its expected goal and was a great success, Chinese Premier Wen Jiabao said in a closing speech.
As one of the most fruitful achievements, a statement of the 7th ASEM on the international financial situation was adopted at the meeting.
"Leaders believed that authorities of all countries should demonstrate vision and resolution and take firm, decisive and effective measures in a responsible and timely manner to rise to the challenge of the financial crisis," said the statement.
The international community should continue to strengthen coordination and cooperation and take effective and available economic and financial measures in a comprehensive way to restore market confidence, stabilize global financial markets and promote global economic growth, it said.
According to the document, leaders supported the convening of an international summit on Nov. 15 in the United States to address the current crisis and principles of reform of the international financial system.
The summit also adopted a declaration on sustainable development.
"The adoption of various cooperation proposals shows and proves again the interior impetus for strengthening dialogue at the ASEM and great potential for extending cooperation," Wen said.
Amid the global financial turmoil, the ASEM has been widely regarded as an opportunity for Asian and European leaders to find a solution.
French President Nicholas Sarkozy called the meeting very "helpful" for Asia and Europe to tackle the global financial crisis and build up common cause.
"We had discussed nearly all of the topics concerned by the two continents including the most difficult issues," he said at a press conference at the end of the meeting.
Premier Wen told the press conference the need of confidence, cooperation and responsibility to find a solution to the global financial meltdown.
"We are glad to see that many countries have made their efforts and achieved some results. But it is not enough as we now see it, and more endeavors are needed," said Wen.
All countries, especially developed ones, should take measures as soon as possible to stabilize the financial market and build public confidence, he said.
Financial innovation could help develop the economy, but financial supervision is even more important for the security of the financial system, he added.
The premier also declared that China would actively attend the Nov.15 financial summit."
Apparently the following was not a part of the official reports from the 7th Asia-Europe Meeting:
http://www.reuters.com/article/companyNewsAndPR/idUSPEK466920081024
"U.S. has plundered world wealth with dollar - China paper" Fri Oct 24, 2008
BEIJING, Oct 24 (Reuters) - "The United States has plundered global wealth by exploiting the dollar's dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.
The front-page commentary in the overseas edition of the People's Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies..."
Aloha, Brad
Top Two Poll Reports on Presidential Race 10/27/08
From Gallup.Com: Gallup Daily: Race Stable With Obama Leading Mon 10/27/08:
Barack Obama has a five-point lead over John McCain, 50% to 45%, in the presidential preferences of likely voters using Gallup’s traditional model -- unchanged from Sunday’s report. He enjoys a more ample 10-point lead, 53% to 43%, using Gallup’s expanded model.
Read more at GALLUP.com.
With about a week left in Campaign 2008, history is on the side of a Barack Obama victory. It would be unusual -- though not unprecedented -- to see Obama’s recent leads among registered and likely voters shrink enough to put the presidency within John McCain’s reach.
Read more at GALLUP.com.
From The Rasmussen Reports:
Daily Presidential Tracking Poll
Monday, October 27, 2008
The Rasmussen Reports daily Presidential Tracking Poll for Monday shows Barack Obama attracting 51% of the vote while John McCain earns 46%. Obama’s five-point advantage is down from an eight-point lead yesterday but up a point from the lead he held a week ago. With today’s results, Obama has been ahead by four-to-eight points every single day for 32 straight days. During that 32-day stretch, Obama’s voter support has stayed between 50% and 52% every day while McCain has stayed in the 44% to 46% range...
Rasmussen Reports Video:
Megyn Kelly Interviews Scott Rasmussen -- good interview
Aloha, Brad
Barack Obama has a five-point lead over John McCain, 50% to 45%, in the presidential preferences of likely voters using Gallup’s traditional model -- unchanged from Sunday’s report. He enjoys a more ample 10-point lead, 53% to 43%, using Gallup’s expanded model.
Read more at GALLUP.com.
With about a week left in Campaign 2008, history is on the side of a Barack Obama victory. It would be unusual -- though not unprecedented -- to see Obama’s recent leads among registered and likely voters shrink enough to put the presidency within John McCain’s reach.
Read more at GALLUP.com.
From The Rasmussen Reports:
Daily Presidential Tracking Poll
Monday, October 27, 2008
The Rasmussen Reports daily Presidential Tracking Poll for Monday shows Barack Obama attracting 51% of the vote while John McCain earns 46%. Obama’s five-point advantage is down from an eight-point lead yesterday but up a point from the lead he held a week ago. With today’s results, Obama has been ahead by four-to-eight points every single day for 32 straight days. During that 32-day stretch, Obama’s voter support has stayed between 50% and 52% every day while McCain has stayed in the 44% to 46% range...
Rasmussen Reports Video:
Megyn Kelly Interviews Scott Rasmussen -- good interview
Aloha, Brad
Vote YES on the Charter Amendment to Implement the Kaua’i General Plan
"Protect Kaua’i’s environment, jobs, economy, and future."
Vote YES on the Charter Amendment to Implement the Kaua’i
General Plan (the last Charter Amendment on the ballot).
Eight years ago, the Kaua’i County Council adopted the Kaua’i General Plan, a roadmap for future development on Kaua’i. But County government has completely ignored the Plan: over the past 8 years, the Planning Commission has approved tourist units (such as hotels, resort condominiums and timeshare units) at a pace 4-to-6 times the growth rates envisioned in the General Plan.
Ignoring the General Plan is creating enormous impacts on Kaua’i: loss of open space along our shorelines; overloaded infrastructure; traffic and highway congestion; overcrowding at parks and beaches; unsustainable demands for groundwater, wastewater treatment, landfills, energy resources and emergency services; and the loss of Kauai’s character, pace and quality of life.
Compared to steady, well-paced growth, overly-rapid growth hurts the economy. The local construction industry is harmed because much of the new construction is done by workers who are brought in during the building boom; but after the boom busts, there are few jobs left for local workers. Overly-rapid growth also means that Kaua’i needs to import many new service industry workers to meet the demand (increasing the shortage of affordable housing); but overbuilding ultimately leads to low hotel occupancy rates, so during periods of economic stress, tourist industry workers see reduced work hours, pay cuts and job losses.
Overcrowding of parks and beaches and the loss of Kaua’i’s character and rural pace harm not only residents’ quality of life, but also the core of Kaua’i’s economy. The very qualities that attract most tourists to Kaua’i are seriously threatened by rapid, unbalanced development; and when those qualities are lost, there will be no good reason for tourists to visit Kaua’i.
Kaua’i cannot afford to let this continue. So this spring, citizens collected more than 3,000 signatures on a petition to bring to Kaua’i’s voters a Charter Amendment that will require the County Council to comply with the growth element of the General Plan.
This Charter Amendment will give the County Council two ways to achieve that compliance: either (i) the Council will become responsible for approving permits for tourist accommodations - but only with a super-majority vote and a finding that such approval would be consistent with the growth scenarios in the current or future General Plan; or (ii) the Council can authorize the Planning Commission to issue permits for such accommodations - but only up to an amount consistent with the growth scenarios in the current or future General Plan. In either case, our island will be far better off than today.
Stable, paced development means stable economic and employment growth. It means reduced impacts on our parks, beaches and environment. It means a better experience for Kaua’i’s visitors and a better life for Kaua’i’s residents.
We cannot afford to let County government continue to ignore the General Plan. The Charter Amendment to Implement the General Plan is a balanced, sensible and realistic proposal to make our County government take responsibility for Kaua’i’s future.
Please vote YES on the Charter Amendment to Implement the General Plan (the last proposal on the ballot) and urge everyone you know to do the same.
Coalition for Responsible Government - Kauai
Vote YES on the Charter Amendment to Implement the Kaua’i
General Plan (the last Charter Amendment on the ballot).
Eight years ago, the Kaua’i County Council adopted the Kaua’i General Plan, a roadmap for future development on Kaua’i. But County government has completely ignored the Plan: over the past 8 years, the Planning Commission has approved tourist units (such as hotels, resort condominiums and timeshare units) at a pace 4-to-6 times the growth rates envisioned in the General Plan.
Ignoring the General Plan is creating enormous impacts on Kaua’i: loss of open space along our shorelines; overloaded infrastructure; traffic and highway congestion; overcrowding at parks and beaches; unsustainable demands for groundwater, wastewater treatment, landfills, energy resources and emergency services; and the loss of Kauai’s character, pace and quality of life.
Compared to steady, well-paced growth, overly-rapid growth hurts the economy. The local construction industry is harmed because much of the new construction is done by workers who are brought in during the building boom; but after the boom busts, there are few jobs left for local workers. Overly-rapid growth also means that Kaua’i needs to import many new service industry workers to meet the demand (increasing the shortage of affordable housing); but overbuilding ultimately leads to low hotel occupancy rates, so during periods of economic stress, tourist industry workers see reduced work hours, pay cuts and job losses.
Overcrowding of parks and beaches and the loss of Kaua’i’s character and rural pace harm not only residents’ quality of life, but also the core of Kaua’i’s economy. The very qualities that attract most tourists to Kaua’i are seriously threatened by rapid, unbalanced development; and when those qualities are lost, there will be no good reason for tourists to visit Kaua’i.
Kaua’i cannot afford to let this continue. So this spring, citizens collected more than 3,000 signatures on a petition to bring to Kaua’i’s voters a Charter Amendment that will require the County Council to comply with the growth element of the General Plan.
This Charter Amendment will give the County Council two ways to achieve that compliance: either (i) the Council will become responsible for approving permits for tourist accommodations - but only with a super-majority vote and a finding that such approval would be consistent with the growth scenarios in the current or future General Plan; or (ii) the Council can authorize the Planning Commission to issue permits for such accommodations - but only up to an amount consistent with the growth scenarios in the current or future General Plan. In either case, our island will be far better off than today.
Stable, paced development means stable economic and employment growth. It means reduced impacts on our parks, beaches and environment. It means a better experience for Kaua’i’s visitors and a better life for Kaua’i’s residents.
We cannot afford to let County government continue to ignore the General Plan. The Charter Amendment to Implement the General Plan is a balanced, sensible and realistic proposal to make our County government take responsibility for Kaua’i’s future.
Please vote YES on the Charter Amendment to Implement the General Plan (the last proposal on the ballot) and urge everyone you know to do the same.
Coalition for Responsible Government - Kauai
Harnessing Hawaii's Renewable Energy Resource
http://www.mauitime.com/Articles-i-2008-10-23-186546.112113_Here_comes_the_sun.html
Rob Report
Here comes the sun
Harnessing Hawaii's renewable energy resource
by Rob Parsons write the author
"Little darling, I feel that ice is slowly melting..." so let's quit burning oil.
October 23, 2008
"Millions of visitors have marveled at Maui's dominant landscape feature, the Haleakala Crater, which stands 10,000 feet above sea level and is known as the House of the Sun. It is there, according to Hawaiian mythology, that the demigod Maui lassoed the sun to slow it down, to allow his mother's tapa cloth to dry.
Though abundant sunshine continues to grace our islands, solar energy may be the most underutilized of an array of abundant local resources. Solar photovoltaic systems represent barely a blip on the screen of statewide electricity production, though nearly 10,000 solar hot water systems help offset energy consumption. The legislature recently passed the "Solar Rooftops" bill that will mandate such systems on all new homes constructed after 2009.
But, other than a recent proposal for a 1.5-megawatt (MW) project on the island of Lanai, there has been little effort to consider large installations of Solar Electrical Generating Systems (SEGS). In 1992, a detailed Hawaii study concluded, "The base case economic analysis finds that SEGS plants do not currently appear to be a [sic] cost-effective solar applications for the State of Hawaii." Yet the analysis was made when a barrel of crude oil, Hawaii's primary electrical generation source, cost around $22.
Last year, Maui Sierra Club and Democratic Party Chair Lance Holter, frustrated with Hawaiian Electric Company's (HECO) and subsidiary Maui Electric Company's (MECO) insistence on proposing palm oil biodiesel for generating electricity, set out to identify better options. His research turned up the Solana Generating Station project in Southern Arizona, whose 280-megawatt output will make it the world's largest solar installation.
The project plans to use a technology that has been available for years, Concentrated Solar Thermal Power. Parabolic mirrors capture the sun's heat and focus it on pipes running through the installation. Inside the pipes, heat absorbing liquids are super heated to 600 degrees by the sun which in turn heat water boilers that drive steam turbines to produce electricity. Additionally, liquid salts can be heated to 400-500 degrees and stored, meaning that electricity can be produced well after the sun has set, thus providing a "firm" power source.
The company behind the Solana proposal in Arizona, Abengoa Solar Inc. of Denver, Colorado, will be sending representatives to Maui and Hawaii next week. Holter is helping arrange meetings with state and county utility and elected officials. The Sierra Club-Maui Group will also sponsor a public presentation on Tuesday, October 28, 6:30-9:00pm, at the Kihei Community Center.
Holter was intrigued that the project expects to provide 1,500-2,000 construction jobs, with 85-100 employees thereafter. He directed me to a quote from Fred Krupp's new book, Earth: The Sequel.
Krupp, who has headed the Environmental Defense Fund for 23 years, wrote: "The economic benefits of Solar farming are impressive. A 2006 study…found that solar thermal plants create twice as many jobs as coal and gas plants and produce eight times the retained revenues in the states in which they are located. Each gigawatt of solar thermal-generated electricity, according to the Natural Renewable Energy Lab, will create 3,400 construction jobs, 250 permanent jobs, and $500 million in tax revenues."
The economic benefits should not be lost on a state that has the highest electric rates in the nation and sends some $6 billion out of the state yearly to import fuel. Van Jones's book, The Green Collar Economy/How One Solution Can Fix Two Problems, recently hit number 12 on the New York Times bestseller list.
Krupp, speaking about Jones's book, said, The Green Collar Economy is a both a rallying call and a road map for how we can save the planet, reduce our dependency on budget-busting fossil fuels and bring millions of new jobs to America. Van Jones shows how climate solutions can turbo charge the ailing U.S. economy. So what are we waiting for?
Abengoa's parent company is in Spain, where they have 20 years of solar technology development, both CSP and photovoltaic. Besides the Arizona/Solana project, Abengoa also has solar complexes under construction in Spain, Algeria and Morocco.
Scott Frier, Chief Operating Officer of Abengoa Solar Inc. and Fred Redell of Redell Engineering Inc. in Santa Ana, California helped answer some questions about the prospects for solar installations in Hawaii. Both will be making the trip to Hawaii to meet with interested parties.
Abengoa, they told me, has the ability to deploy the full range of solar technologies, from rooftop single-user installations to utility scale facilities, for tens of thousands of homes. A system for Maui and other Hawaiian islands would be sized depending on the need. The size of any project would also be taken into consideration when determining the cost of electricity generated. In general, solar projects benefit from large-scale implementation. This allows the higher cost components to be fully utilized, ultimately resulting in a lower cost of electricity.
Frier and Redell believe that ultimately a mix of electrical generation, including solar, will be needed to satisfy demands as utilities shift energy generation to renewable resources. Abengoa Solar's parent company is involved in many areas of energy and focuses on researching sustainable energy solutions including wind, bio energy and wave energy.
They stated that, depending on the project size and technology, a utility scale solar installation to serve tens of thousands of homes would take roughly 12 to 24 months to complete once permitted. Generally, such facilities can produce a full megawatt of electricity, enough to power 1,000 homes, for every five to ten acres utilized.
Frier said that several larger scale installations were built in the mid-'80s to early '90s in the southwest United States. Several others are currently being planned and built. The current solar renaissance in the United States, says Frier, is also being fueled in part by the recently re-enacted solar investment federal tax credits.
Utility scale installations, says Frier, are like any other power plant or generation facility, except the fuel source is the sun. As solar energy does not have to be imported, and is not subject to the volatility of fossil fuel or biofuel costs, it could greatly help with Hawaii's energy independence, security and diversification of energy production sources.
Holter believes the promise of this technology has been overlooked in Hawaii. "Our public utilities are dabbling in a few renewables, but are largely taking us down a path of enslaving us to more imported oil," he said. "Whether it is imported petroleum, ethanol or palm oil, we ought to consider liquid fuels as better suited to our transportation fuels needs and use our sun, wind, and wave resources for electrical production."
National political hopefuls have been touting the likes of more nuclear power, "clean coal," natural gas and more drilling as strategies to reduce our over-dependence, some say our "addiction," to foreign oil. Holter pointed out that a recent article in Scientific American, "A Solar Grand Plan," outlined a switch that would result in producing more than two-thirds of the country's electricity by 2050.
"Well-meaning scientists, engineers, economists and politicians," the article begins, "have proposed various steps that could slightly reduce fossil-fuel use and emissions. These steps are not enough. The U.S. needs a bold plan to free itself from fossil fuels. Our analysis convinces us that a massive switch to solar power is the logical answer.
"Solar energy's potential is off the chart," the Scientific American article continues. "The energy in sunlight striking the earth for 40 minutes is equivalent to global energy consumption for a year."
Nine concentrated solar power plants with a total capacity of 354 (MW) have been generating electricity reliably for years in the U.S. A new 64-MW plant in Nevada came online in March 2007. These plants, however, do not have heat storage. The first commercial installation to incorporate it—Abengoa's 50-MW plant with seven hours of molten salt storage—is being constructed in Spain, and others are being designed around the world.
Whether the promise of solar energy can rise above the politics and economics of Hawaii remains to be seen. Certainly, having open discussions with community members, energy experts and elected officials will help us collectively plan a renewable energy future and economy that can sustain us all." MTW
Public Meeting for A New Solar Energy Future—October 28, 6:30-9:00pm at the Kihei Community Center; RSVP Lance Holter.
Aloha, Brad
Rob Report
Here comes the sun
Harnessing Hawaii's renewable energy resource
by Rob Parsons write the author
"Little darling, I feel that ice is slowly melting..." so let's quit burning oil.
October 23, 2008
"Millions of visitors have marveled at Maui's dominant landscape feature, the Haleakala Crater, which stands 10,000 feet above sea level and is known as the House of the Sun. It is there, according to Hawaiian mythology, that the demigod Maui lassoed the sun to slow it down, to allow his mother's tapa cloth to dry.
Though abundant sunshine continues to grace our islands, solar energy may be the most underutilized of an array of abundant local resources. Solar photovoltaic systems represent barely a blip on the screen of statewide electricity production, though nearly 10,000 solar hot water systems help offset energy consumption. The legislature recently passed the "Solar Rooftops" bill that will mandate such systems on all new homes constructed after 2009.
But, other than a recent proposal for a 1.5-megawatt (MW) project on the island of Lanai, there has been little effort to consider large installations of Solar Electrical Generating Systems (SEGS). In 1992, a detailed Hawaii study concluded, "The base case economic analysis finds that SEGS plants do not currently appear to be a [sic] cost-effective solar applications for the State of Hawaii." Yet the analysis was made when a barrel of crude oil, Hawaii's primary electrical generation source, cost around $22.
Last year, Maui Sierra Club and Democratic Party Chair Lance Holter, frustrated with Hawaiian Electric Company's (HECO) and subsidiary Maui Electric Company's (MECO) insistence on proposing palm oil biodiesel for generating electricity, set out to identify better options. His research turned up the Solana Generating Station project in Southern Arizona, whose 280-megawatt output will make it the world's largest solar installation.
The project plans to use a technology that has been available for years, Concentrated Solar Thermal Power. Parabolic mirrors capture the sun's heat and focus it on pipes running through the installation. Inside the pipes, heat absorbing liquids are super heated to 600 degrees by the sun which in turn heat water boilers that drive steam turbines to produce electricity. Additionally, liquid salts can be heated to 400-500 degrees and stored, meaning that electricity can be produced well after the sun has set, thus providing a "firm" power source.
The company behind the Solana proposal in Arizona, Abengoa Solar Inc. of Denver, Colorado, will be sending representatives to Maui and Hawaii next week. Holter is helping arrange meetings with state and county utility and elected officials. The Sierra Club-Maui Group will also sponsor a public presentation on Tuesday, October 28, 6:30-9:00pm, at the Kihei Community Center.
Holter was intrigued that the project expects to provide 1,500-2,000 construction jobs, with 85-100 employees thereafter. He directed me to a quote from Fred Krupp's new book, Earth: The Sequel.
Krupp, who has headed the Environmental Defense Fund for 23 years, wrote: "The economic benefits of Solar farming are impressive. A 2006 study…found that solar thermal plants create twice as many jobs as coal and gas plants and produce eight times the retained revenues in the states in which they are located. Each gigawatt of solar thermal-generated electricity, according to the Natural Renewable Energy Lab, will create 3,400 construction jobs, 250 permanent jobs, and $500 million in tax revenues."
The economic benefits should not be lost on a state that has the highest electric rates in the nation and sends some $6 billion out of the state yearly to import fuel. Van Jones's book, The Green Collar Economy/How One Solution Can Fix Two Problems, recently hit number 12 on the New York Times bestseller list.
Krupp, speaking about Jones's book, said, The Green Collar Economy is a both a rallying call and a road map for how we can save the planet, reduce our dependency on budget-busting fossil fuels and bring millions of new jobs to America. Van Jones shows how climate solutions can turbo charge the ailing U.S. economy. So what are we waiting for?
Abengoa's parent company is in Spain, where they have 20 years of solar technology development, both CSP and photovoltaic. Besides the Arizona/Solana project, Abengoa also has solar complexes under construction in Spain, Algeria and Morocco.
Scott Frier, Chief Operating Officer of Abengoa Solar Inc. and Fred Redell of Redell Engineering Inc. in Santa Ana, California helped answer some questions about the prospects for solar installations in Hawaii. Both will be making the trip to Hawaii to meet with interested parties.
Abengoa, they told me, has the ability to deploy the full range of solar technologies, from rooftop single-user installations to utility scale facilities, for tens of thousands of homes. A system for Maui and other Hawaiian islands would be sized depending on the need. The size of any project would also be taken into consideration when determining the cost of electricity generated. In general, solar projects benefit from large-scale implementation. This allows the higher cost components to be fully utilized, ultimately resulting in a lower cost of electricity.
Frier and Redell believe that ultimately a mix of electrical generation, including solar, will be needed to satisfy demands as utilities shift energy generation to renewable resources. Abengoa Solar's parent company is involved in many areas of energy and focuses on researching sustainable energy solutions including wind, bio energy and wave energy.
They stated that, depending on the project size and technology, a utility scale solar installation to serve tens of thousands of homes would take roughly 12 to 24 months to complete once permitted. Generally, such facilities can produce a full megawatt of electricity, enough to power 1,000 homes, for every five to ten acres utilized.
Frier said that several larger scale installations were built in the mid-'80s to early '90s in the southwest United States. Several others are currently being planned and built. The current solar renaissance in the United States, says Frier, is also being fueled in part by the recently re-enacted solar investment federal tax credits.
Utility scale installations, says Frier, are like any other power plant or generation facility, except the fuel source is the sun. As solar energy does not have to be imported, and is not subject to the volatility of fossil fuel or biofuel costs, it could greatly help with Hawaii's energy independence, security and diversification of energy production sources.
Holter believes the promise of this technology has been overlooked in Hawaii. "Our public utilities are dabbling in a few renewables, but are largely taking us down a path of enslaving us to more imported oil," he said. "Whether it is imported petroleum, ethanol or palm oil, we ought to consider liquid fuels as better suited to our transportation fuels needs and use our sun, wind, and wave resources for electrical production."
National political hopefuls have been touting the likes of more nuclear power, "clean coal," natural gas and more drilling as strategies to reduce our over-dependence, some say our "addiction," to foreign oil. Holter pointed out that a recent article in Scientific American, "A Solar Grand Plan," outlined a switch that would result in producing more than two-thirds of the country's electricity by 2050.
"Well-meaning scientists, engineers, economists and politicians," the article begins, "have proposed various steps that could slightly reduce fossil-fuel use and emissions. These steps are not enough. The U.S. needs a bold plan to free itself from fossil fuels. Our analysis convinces us that a massive switch to solar power is the logical answer.
"Solar energy's potential is off the chart," the Scientific American article continues. "The energy in sunlight striking the earth for 40 minutes is equivalent to global energy consumption for a year."
Nine concentrated solar power plants with a total capacity of 354 (MW) have been generating electricity reliably for years in the U.S. A new 64-MW plant in Nevada came online in March 2007. These plants, however, do not have heat storage. The first commercial installation to incorporate it—Abengoa's 50-MW plant with seven hours of molten salt storage—is being constructed in Spain, and others are being designed around the world.
Whether the promise of solar energy can rise above the politics and economics of Hawaii remains to be seen. Certainly, having open discussions with community members, energy experts and elected officials will help us collectively plan a renewable energy future and economy that can sustain us all." MTW
Public Meeting for A New Solar Energy Future—October 28, 6:30-9:00pm at the Kihei Community Center; RSVP Lance Holter.
Aloha, Brad
Endorsement for Bruce Pleas
http://www.kauaiworld.com/articles/2008/10/27/opinion/letters_to_the_editor/doc490571d6a7880754629324.txt
"Bieber endorses Pleas"
"Since July, I have attended each County Council meeting and Charter Review Commission meeting in-full. This is not remarkable, nor the point, but what is impressive is my witness to the dedication, comprehension and participation of council candidate Bruce Pleas within the aforementioned meetings.
His knowledge of Kaua‘i County operations, in particular its legislative function, is equaled by few council or board members. This is no secret.
Additionally, he authored this year’s charter ballot proposal concerning mayor and prosecuting attorney elections through to the General Election.
Bruce is well-known and highly respected within our government, his Westside community and amongst his current council candidate opponents. In my experience, no other current council candidate outside the incumbents have stepped foot in chambers to conduct the people’s business, and certainly nobody has done the people’s business better from the public side of the bench than Bruce.
Undeniably, his time has come. Bruce Pleas belongs in County Council, for he has earned it. Do the right thing by casting a vote for Bruce Pleas to County Council."
• Rolf Bieber, Kapa‘a
"Bieber endorses Pleas"
"Since July, I have attended each County Council meeting and Charter Review Commission meeting in-full. This is not remarkable, nor the point, but what is impressive is my witness to the dedication, comprehension and participation of council candidate Bruce Pleas within the aforementioned meetings.
His knowledge of Kaua‘i County operations, in particular its legislative function, is equaled by few council or board members. This is no secret.
Additionally, he authored this year’s charter ballot proposal concerning mayor and prosecuting attorney elections through to the General Election.
Bruce is well-known and highly respected within our government, his Westside community and amongst his current council candidate opponents. In my experience, no other current council candidate outside the incumbents have stepped foot in chambers to conduct the people’s business, and certainly nobody has done the people’s business better from the public side of the bench than Bruce.
Undeniably, his time has come. Bruce Pleas belongs in County Council, for he has earned it. Do the right thing by casting a vote for Bruce Pleas to County Council."
• Rolf Bieber, Kapa‘a
Apollo Kaua‘i Endorsement of JoAnn Yukimura
JoAnn Yukimura, For Our Sustainable Energy Future
We in Apollo Kauai have been studying the issues of our oil dependence and climate change for the last three years. We have been educating ourselves and fellow residents about both the impacts and mitigation strategies for Kaua‘i. Our investigations and educational efforts have included numerous public meetings presenting renewable energy solutions, transportation, efficiency and conservation measures for saving energy, and a myriad of related subjects. During this time, rising local electricity rates and ever-increasing transportation fuel costs as well as global events and awareness of climate changes have caused a call for urgent immediate action to address these energy issues.
Most recently, that call reached a fever pitch here on the Garden Island, when Maurice Kaya, former head of the state Department of Business, Economic Development and Tourism, as one of several presenters, addressed a room of over 200 Kaua‘i officials, business people and concerned residents at a renewable energy event organized by the county Office of Economic Development. Mr. Kaya started his presentation with an insistence on the need for the people of Kaua‘i to proceed with far greater urgency in addressing our energy dependence. He emphasized that we cannot simply consider this in a box, as “another” social problem that will eventually resolve itself. He proceeded to outline the incredible fragility of our entire economy because of our total reliance on increasingly scarce and expensive petroleum.
Our energy crisis has been building for years, and despite the recent softening of oil prices, it is widely expected to worsen significantly in the foreseeable future. And, despite interest in this or that possible technological “solution” (algae, nanotechnology, cellulosic ethanol) there is very little disagreement in the energy industry that we are at the edge of a precipice. The single most important thing for local governments around the country in responding to this unprecedented crisis is clear recognition of it and to quickly begin implementing solutions.We need a mayor on Kaua‘i who understands both the severity of our situation, and the appropriate responses to it.
We need a mayor who goes into office on Day 1 as a strong proponent of the solutions that can benefit us the most. We need a mayor who has the experience of having worked through real crisis situations before. We cannot afford anything less now.
Some may see this perspective as too pessimistic or alarmist, and choose not to think that they or their job or business on Kaua‘i might be impacted by such abstractions; but we need to face the facts. Most of us already see the affects of our electricity and transportation costs and the resulting rising costs of all goods, including food and services. If we can elect a mayor who truly understands the urgency of our energy situation, we can move together as a community and successfully meet this challenge.
We can expand the bus system that former Mayor and current Council woman JoAnn Yukimura started; we can depend on affordable housing becoming a reality as in the past; we can transform the co-op that Yukimura helped found; we can protect the rural island that Yukimura has, countless times, defended; we can begin employing the conservation measures and green building practices which will save our county energy. With Yukimura’s leadership, we can avoid saddling the Westside with yet another toxic burden in a waste-to-energy incinerator; and instead proceed with much more profitable and innovative recycling efforts. We can expand the farmer’s markets that Yukimura championed, and by doing so, help promote more agriculture on Kaua‘i, more small farms and more exporting of our products. We can assist Kaua‘i families and individuals who must live on limited or fixed incomes to save through energy saving incentives.
We cannot and should not rely on solutions to come from our state and federal government. Instead, with Yukimura’s leadership assisting us in becoming more energy self-reliant, and in joining together, we can take responsibility for the well-being of our families, businesses and our communities right here on Kaua‘i.
Apollo Kaua‘i endorses JoAnn Yukimura as the person most capable of working with us to bring about the energy solutions we will need to enjoy that optimistic future.
• Apollo Kaua‘i
We in Apollo Kauai have been studying the issues of our oil dependence and climate change for the last three years. We have been educating ourselves and fellow residents about both the impacts and mitigation strategies for Kaua‘i. Our investigations and educational efforts have included numerous public meetings presenting renewable energy solutions, transportation, efficiency and conservation measures for saving energy, and a myriad of related subjects. During this time, rising local electricity rates and ever-increasing transportation fuel costs as well as global events and awareness of climate changes have caused a call for urgent immediate action to address these energy issues.
Most recently, that call reached a fever pitch here on the Garden Island, when Maurice Kaya, former head of the state Department of Business, Economic Development and Tourism, as one of several presenters, addressed a room of over 200 Kaua‘i officials, business people and concerned residents at a renewable energy event organized by the county Office of Economic Development. Mr. Kaya started his presentation with an insistence on the need for the people of Kaua‘i to proceed with far greater urgency in addressing our energy dependence. He emphasized that we cannot simply consider this in a box, as “another” social problem that will eventually resolve itself. He proceeded to outline the incredible fragility of our entire economy because of our total reliance on increasingly scarce and expensive petroleum.
Our energy crisis has been building for years, and despite the recent softening of oil prices, it is widely expected to worsen significantly in the foreseeable future. And, despite interest in this or that possible technological “solution” (algae, nanotechnology, cellulosic ethanol) there is very little disagreement in the energy industry that we are at the edge of a precipice. The single most important thing for local governments around the country in responding to this unprecedented crisis is clear recognition of it and to quickly begin implementing solutions.We need a mayor on Kaua‘i who understands both the severity of our situation, and the appropriate responses to it.
We need a mayor who goes into office on Day 1 as a strong proponent of the solutions that can benefit us the most. We need a mayor who has the experience of having worked through real crisis situations before. We cannot afford anything less now.
Some may see this perspective as too pessimistic or alarmist, and choose not to think that they or their job or business on Kaua‘i might be impacted by such abstractions; but we need to face the facts. Most of us already see the affects of our electricity and transportation costs and the resulting rising costs of all goods, including food and services. If we can elect a mayor who truly understands the urgency of our energy situation, we can move together as a community and successfully meet this challenge.
We can expand the bus system that former Mayor and current Council woman JoAnn Yukimura started; we can depend on affordable housing becoming a reality as in the past; we can transform the co-op that Yukimura helped found; we can protect the rural island that Yukimura has, countless times, defended; we can begin employing the conservation measures and green building practices which will save our county energy. With Yukimura’s leadership, we can avoid saddling the Westside with yet another toxic burden in a waste-to-energy incinerator; and instead proceed with much more profitable and innovative recycling efforts. We can expand the farmer’s markets that Yukimura championed, and by doing so, help promote more agriculture on Kaua‘i, more small farms and more exporting of our products. We can assist Kaua‘i families and individuals who must live on limited or fixed incomes to save through energy saving incentives.
We cannot and should not rely on solutions to come from our state and federal government. Instead, with Yukimura’s leadership assisting us in becoming more energy self-reliant, and in joining together, we can take responsibility for the well-being of our families, businesses and our communities right here on Kaua‘i.
Apollo Kaua‘i endorses JoAnn Yukimura as the person most capable of working with us to bring about the energy solutions we will need to enjoy that optimistic future.
• Apollo Kaua‘i
Redemptions, Breakdown of Trust, and Outlook
Reviewed the most interesting news from Friday to the present including Monday's Asian markets. I think big things lay ahead for this last week of October and beyond.
A lot of what is happening now are redemptions by financial customers that are forcing hedge funds and most large investment companies to sell investments to honor their customers' redemptions. I wrote about the breakdown in trust in the credit markets set by the example of Lehman Brothers and the breakdown in trust that most market participants have for the arbitrary lack of transparency in new legislation and U.S. Treasury and Fed actions.
Now I think there is a third big leg of trust breaking down in the financial system and it is between individual investors and their investment advisors on a large scale. I cite the age old financial sales slogan that almost any idiot in financial sales would use, "just put your money in the stock market and hold it there and in the long run it will always go up and you'll always do better that way." That pervasive sales claim is no longer valid, or at least many if not most individual investors no longer believe it and further have decided they don't trust the honesty nor judgement of their investment advisors. It is why I never became an investment advisor, because I never fully believed in that "Big Lie."
This breakdown in trust between the investment advisor and the individual investor is the third leg and huge breakdown of trust in the financial markets. On that point, markets began to reach capitulation toward the end of last week. It is continuing in Asia early this morning. I believe it will continue into the coming week. My outlook is that the coming week we will see dramatic events in the financial markets and economy.
A fourth leg of trust that is breaking down is between nations. By how the credit derivatives were created and sold, and how government interventions have been happening in the markets, a lack of trust between nations is developing. As an example, Friday and Saturday, Asian and European nations were meeting in China on the status of global reserve currency.
I have to say, I've expected these types of events for more than a decade or two, but I did not expect them now nor to come so quickly. I thought the system could keep shifting and perpetuating itself for another decade or two, that was until the events of this Fall of 2008.
I'm glad I can do gardening and live in a potentially sustainable place. Hope the world remains a civil place and that people of the world can lower their expectations and be kind to each other. Most paradigms will change, it can be for the better, but it requires that people help each other.
Aloha, Brad
A lot of what is happening now are redemptions by financial customers that are forcing hedge funds and most large investment companies to sell investments to honor their customers' redemptions. I wrote about the breakdown in trust in the credit markets set by the example of Lehman Brothers and the breakdown in trust that most market participants have for the arbitrary lack of transparency in new legislation and U.S. Treasury and Fed actions.
Now I think there is a third big leg of trust breaking down in the financial system and it is between individual investors and their investment advisors on a large scale. I cite the age old financial sales slogan that almost any idiot in financial sales would use, "just put your money in the stock market and hold it there and in the long run it will always go up and you'll always do better that way." That pervasive sales claim is no longer valid, or at least many if not most individual investors no longer believe it and further have decided they don't trust the honesty nor judgement of their investment advisors. It is why I never became an investment advisor, because I never fully believed in that "Big Lie."
This breakdown in trust between the investment advisor and the individual investor is the third leg and huge breakdown of trust in the financial markets. On that point, markets began to reach capitulation toward the end of last week. It is continuing in Asia early this morning. I believe it will continue into the coming week. My outlook is that the coming week we will see dramatic events in the financial markets and economy.
A fourth leg of trust that is breaking down is between nations. By how the credit derivatives were created and sold, and how government interventions have been happening in the markets, a lack of trust between nations is developing. As an example, Friday and Saturday, Asian and European nations were meeting in China on the status of global reserve currency.
I have to say, I've expected these types of events for more than a decade or two, but I did not expect them now nor to come so quickly. I thought the system could keep shifting and perpetuating itself for another decade or two, that was until the events of this Fall of 2008.
I'm glad I can do gardening and live in a potentially sustainable place. Hope the world remains a civil place and that people of the world can lower their expectations and be kind to each other. Most paradigms will change, it can be for the better, but it requires that people help each other.
Aloha, Brad
Sunday, October 26, 2008
Ono Organic Farms: Money Does Grow on Trees
From: http://www.starbulletin.com/travel/hawaiisbackyard/20081026_Fruitful_Tour.html
"Fruitful Tour"
Ono Organic Farms follows four generations of a family that got its start on Maui by chance
By Cheryl Chee Tsutsumi Oct 26, 2008
"Chuck Boerner and his wife, Lilly, owners of Ono Organic Farms, were living green long before it became the watchword of environmentalists worldwide.
If you go ...
Ono Organic Farms Tour» Offered: 2:30 p.m. Mondays and Thursdays. Reservations required; directions to Kipahulu, Maui, location given when booking is made.» Cost: $35 per person, free for kids age 10 and under. Kamaaina with a valid Hawaii ID receive 20 percent off pre-booked tours.» Call: 248-7779 or e-mail br /> » Online: www.onofarms.com» Notes: Wear comfortable clothes and hiking shoes. Private tours available for up to 20 people. Costs vary.
Founded 35 years ago, their 259-acre farm in Kipahulu, on the southeastern slopes of Haleakala Volcano, is off the power grid. They use propane and solar energy, draw water from a spring, recycle bottles and cans, and make compost from grass clippings, wood chips and manure.
Four generations of Boerner's family have farmed in this remote area of Maui, starting with his paternal grandfather, Heinrich, who owned and operated a 60-room hotel in upstate New York before moving to Hawaii.
When Heinrich turned 60 in 1940, he underwent a major lifestyle change, giving up cigarettes, meat and alcohol virtually overnight.
His son, Charles, Boerner's dad, moved to Oahu the following year to become the engineer for the 20 underground tanks at Red Hill that were built to store fuel for battleships moored at Pearl Harbor. Beautiful Hawaii, he thought, would be the ideal home for his health-conscious dad. "The air is fresh and clean here," Charles told his father. "This is a great place for you to start a little farm, to grow your own fruits and vegetables."
So Heinrich sold his hotel and most of his possessions, drove to the West Coast, bought passage on a boat and arrived in Hawaii a week after Boerner was born on Oct. 22, 1945.
He spent the next four days pondering where he could cultivate his dream parcel. Many people suggested Kauai, where rainfall was abundant and land was affordable.
Kauai it would be, Heinrich decided. At Honolulu Airport he waited patiently to buy a ticket for a flight to the Garden Island, but when he finally got to the counter, the airline agent told him, "I'm sorry, I'm selling tickets for Maui. The line for Kauai is over there."
Not wanting to endure another long wait, Heinrich flew to Maui. Three days later he purchased 10 acres in Hana, a mile from Hamoa Beach. Within a month his wife had joined him and they were tilling the earth and living in a house powered by generators.
"My grandfather was always experimenting with different plants and trees," said Boerner. "When I was a kid, I would stay with them at Christmas and other holidays, and for a few months during the summer. Those were wonderful times!"
Although Boerner holds bachelor's degrees in civil engineering and industrial economics, he chose to walk the same rural path as his grandparents.
"Ono Organic Farms started with our family growing what we liked to eat and selling the surplus," said Boerner, who founded the Hawaii Organic Farmers Association 10 years ago and served as its first president. "We now grow 75 different crops, primarily fruits, without any chemical fertilizers, herbicides or pesticides."
Among the farm's clients are hotels, restaurants, supermarkets and health food stores on Maui and Oahu, including Star Market, Down to Earth, Hula Grill, Alan Wong's, Hyatt Regency Maui and the Ritz-Carlton, Kapalua. The farm also delivers boxes of fruit to homes throughout Maui twice a week, and provides mail-order service to the other islands.
In 2001, legendary chef Wolfgang Puck came to Maui to open Spago at the Four Seasons Resort Maui at Wailea. His itinerary included a visit to Ono Organic Farms, where he filmed a video for the Food Network.
"He cut a palm tree to harvest heart of palm," said Boerner. "He took a big chunk of it and started eating it like a carrot!"
That same year, the Boerners launched a 90-minute guided tour of the farm, which Lilly usually leads. It begins with a sampling of 15 to 20 types of fruit in season that, said Boerner, shows visitors "why we named our farm 'ono,' the Hawaiian word for delicious. They taste papaya, banana and other familiar fruits, along with exotic species like lychee, jackfruit, jaboticaba and durian."
As they eat, Lilly talks about the history of the farm, which is family owned and operated. From mowing grass to putting stickers on harvested fruit, the Boerners' five children helped with chores from the time they were young. Boerner's 98-year-old mother still sells fruit, coffee, jams and jellies at the open market in nearby Hana town on Thursday afternoons.
Tour-goers also discover the reason behind the farm's haphazard method of planting. "We don't have organized fields; everything is mixed up," said Boerner. "Papayas grow beside bananas, avocados beside soursop. We do that to ensure that a diverse group of microorganisms enriches the soil. People need to eat different foods to keep healthy. Fruit trees need diversity for the same reason."
As participants stroll through the orchards, they can pluck guavas, Surinam cherries and other fruit off the branches. Lilly points out the cacao tree and explains how chocolate is made. She also describes how coffee is processed, from ripe red "cherries" to roasted beans that make a fragrant brew.
Tours are held on Mondays and Thursdays — harvest days — so workers can be seen driving tractors, hand-picking fruit and packing them for shipping.
"Visitors get a firsthand look at all the action on a working farm," said Boerner. He offers consulting services on organic farming, composting and soil and water testing to everyone from big commercial farmers to families who want to start a garden in their back yards.
"Anyone can farm if they've got the time, knowledge and suitable land," said Boerner. "It's hard work but so rewarding! It's amazing how much better food tastes when you've grown it yourself — and don't let anyone tell you that money doesn't grow on trees!"
———
Cheryl Chee Tsutsumi is a Honolulu-based freelance writer whose travel features for the Star-Bulletin have won multiple Society of American Travel Writers awards.
"Fruitful Tour"
Ono Organic Farms follows four generations of a family that got its start on Maui by chance
By Cheryl Chee Tsutsumi Oct 26, 2008
"Chuck Boerner and his wife, Lilly, owners of Ono Organic Farms, were living green long before it became the watchword of environmentalists worldwide.
If you go ...
Ono Organic Farms Tour» Offered: 2:30 p.m. Mondays and Thursdays. Reservations required; directions to Kipahulu, Maui, location given when booking is made.» Cost: $35 per person, free for kids age 10 and under. Kamaaina with a valid Hawaii ID receive 20 percent off pre-booked tours.» Call: 248-7779 or e-mail br /> » Online: www.onofarms.com» Notes: Wear comfortable clothes and hiking shoes. Private tours available for up to 20 people. Costs vary.
Founded 35 years ago, their 259-acre farm in Kipahulu, on the southeastern slopes of Haleakala Volcano, is off the power grid. They use propane and solar energy, draw water from a spring, recycle bottles and cans, and make compost from grass clippings, wood chips and manure.
Four generations of Boerner's family have farmed in this remote area of Maui, starting with his paternal grandfather, Heinrich, who owned and operated a 60-room hotel in upstate New York before moving to Hawaii.
When Heinrich turned 60 in 1940, he underwent a major lifestyle change, giving up cigarettes, meat and alcohol virtually overnight.
His son, Charles, Boerner's dad, moved to Oahu the following year to become the engineer for the 20 underground tanks at Red Hill that were built to store fuel for battleships moored at Pearl Harbor. Beautiful Hawaii, he thought, would be the ideal home for his health-conscious dad. "The air is fresh and clean here," Charles told his father. "This is a great place for you to start a little farm, to grow your own fruits and vegetables."
So Heinrich sold his hotel and most of his possessions, drove to the West Coast, bought passage on a boat and arrived in Hawaii a week after Boerner was born on Oct. 22, 1945.
He spent the next four days pondering where he could cultivate his dream parcel. Many people suggested Kauai, where rainfall was abundant and land was affordable.
Kauai it would be, Heinrich decided. At Honolulu Airport he waited patiently to buy a ticket for a flight to the Garden Island, but when he finally got to the counter, the airline agent told him, "I'm sorry, I'm selling tickets for Maui. The line for Kauai is over there."
Not wanting to endure another long wait, Heinrich flew to Maui. Three days later he purchased 10 acres in Hana, a mile from Hamoa Beach. Within a month his wife had joined him and they were tilling the earth and living in a house powered by generators.
"My grandfather was always experimenting with different plants and trees," said Boerner. "When I was a kid, I would stay with them at Christmas and other holidays, and for a few months during the summer. Those were wonderful times!"
Although Boerner holds bachelor's degrees in civil engineering and industrial economics, he chose to walk the same rural path as his grandparents.
"Ono Organic Farms started with our family growing what we liked to eat and selling the surplus," said Boerner, who founded the Hawaii Organic Farmers Association 10 years ago and served as its first president. "We now grow 75 different crops, primarily fruits, without any chemical fertilizers, herbicides or pesticides."
Among the farm's clients are hotels, restaurants, supermarkets and health food stores on Maui and Oahu, including Star Market, Down to Earth, Hula Grill, Alan Wong's, Hyatt Regency Maui and the Ritz-Carlton, Kapalua. The farm also delivers boxes of fruit to homes throughout Maui twice a week, and provides mail-order service to the other islands.
In 2001, legendary chef Wolfgang Puck came to Maui to open Spago at the Four Seasons Resort Maui at Wailea. His itinerary included a visit to Ono Organic Farms, where he filmed a video for the Food Network.
"He cut a palm tree to harvest heart of palm," said Boerner. "He took a big chunk of it and started eating it like a carrot!"
That same year, the Boerners launched a 90-minute guided tour of the farm, which Lilly usually leads. It begins with a sampling of 15 to 20 types of fruit in season that, said Boerner, shows visitors "why we named our farm 'ono,' the Hawaiian word for delicious. They taste papaya, banana and other familiar fruits, along with exotic species like lychee, jackfruit, jaboticaba and durian."
As they eat, Lilly talks about the history of the farm, which is family owned and operated. From mowing grass to putting stickers on harvested fruit, the Boerners' five children helped with chores from the time they were young. Boerner's 98-year-old mother still sells fruit, coffee, jams and jellies at the open market in nearby Hana town on Thursday afternoons.
Tour-goers also discover the reason behind the farm's haphazard method of planting. "We don't have organized fields; everything is mixed up," said Boerner. "Papayas grow beside bananas, avocados beside soursop. We do that to ensure that a diverse group of microorganisms enriches the soil. People need to eat different foods to keep healthy. Fruit trees need diversity for the same reason."
As participants stroll through the orchards, they can pluck guavas, Surinam cherries and other fruit off the branches. Lilly points out the cacao tree and explains how chocolate is made. She also describes how coffee is processed, from ripe red "cherries" to roasted beans that make a fragrant brew.
Tours are held on Mondays and Thursdays — harvest days — so workers can be seen driving tractors, hand-picking fruit and packing them for shipping.
"Visitors get a firsthand look at all the action on a working farm," said Boerner. He offers consulting services on organic farming, composting and soil and water testing to everyone from big commercial farmers to families who want to start a garden in their back yards.
"Anyone can farm if they've got the time, knowledge and suitable land," said Boerner. "It's hard work but so rewarding! It's amazing how much better food tastes when you've grown it yourself — and don't let anyone tell you that money doesn't grow on trees!"
———
Cheryl Chee Tsutsumi is a Honolulu-based freelance writer whose travel features for the Star-Bulletin have won multiple Society of American Travel Writers awards.
Saturday, October 25, 2008
Please 'Give Pleas a Chance'
Sent: Saturday, October 25, 2008
Subject: FW: 'Give Pleas a Chance'
Aloha,
This is a pivotal election year for Kauai. Many important unresolved issues from the past Council and important new issues will be considered by the next Council. Bruce knows the past and present issues before the Council from over a decade of experience working with the Council as a strong voice for the public. He will work hard to preserve Kauai's rural atmosphere and to provide for intelligent controlled growth thru his proven ability to craft legislation that is simple, addresses the issues, and minimizes loopholes. He has a complete knowledge of both the Legislative and Administrative branches of Kauai's government which makes Bruce Pleas the best qualified and the most logical choice for one of your votes for County Council.
Bruce will faithfully address any concerns that you may have, bring your concerns before the Council and he will make decisions that represent the views of the residents of Kauai. Bruce wants to keep your dreams of Kauai being a special place to live alive, a place that is affordable, a place that has a sustainable locally based economy that will feed and provide energy to Kauai's residents. Please cast one of your votes for Bruce Pleas on November 4.
'Give Pleas a Chance'
Mahalo,
Bruce Pleas
brucepleas@hawaii.rr.com
From Friends of Bruce Pleas PO Box 721 Waimea, Hi, 96796 (808) 639-2850
Subject: FW: 'Give Pleas a Chance'
Aloha,
This is a pivotal election year for Kauai. Many important unresolved issues from the past Council and important new issues will be considered by the next Council. Bruce knows the past and present issues before the Council from over a decade of experience working with the Council as a strong voice for the public. He will work hard to preserve Kauai's rural atmosphere and to provide for intelligent controlled growth thru his proven ability to craft legislation that is simple, addresses the issues, and minimizes loopholes. He has a complete knowledge of both the Legislative and Administrative branches of Kauai's government which makes Bruce Pleas the best qualified and the most logical choice for one of your votes for County Council.
Bruce will faithfully address any concerns that you may have, bring your concerns before the Council and he will make decisions that represent the views of the residents of Kauai. Bruce wants to keep your dreams of Kauai being a special place to live alive, a place that is affordable, a place that has a sustainable locally based economy that will feed and provide energy to Kauai's residents. Please cast one of your votes for Bruce Pleas on November 4.
'Give Pleas a Chance'
Mahalo,
Bruce Pleas
brucepleas@hawaii.rr.com
From Friends of Bruce Pleas PO Box 721 Waimea, Hi, 96796 (808) 639-2850
An 'Economic Tsunami' you say?
Recently politicians (Bernard Carvalho) and policy makers (Alan Greenspan) have used the fearful word 'tsunami' to describe the economy.This conjured up images in my mind (around Hilo Bay) from when the last real tsunami's also hit Kauai in 1946 and 1957, both significantly affecting Kauai.
If that metaphor is to be used, it should be looked at what happens when a tsunami actually hits. At first, the severity of the situation is not readily apparent as the water recedes and reveals fish for easy catchings. I can certainly imagine an inexperienced politician, quick to react, making similar such policy mistakes in trying to quickly react to a 'economic tsunami.'
Both of the real tsunami's that hit Kauai in the past century came in multiple waves lasting over an extended period of time. The full effects were not known or understood until well into the disaster.
What is happening with the economy now is not known nor understood even by those, like Alan Greenspan recently admitted, who oversaw its creation and escalation under a Republican Administration.
When voting for a local elected official who will need to lead during these times of complex economic events, it is important to choose the candidate who is personally intelligent, experienced, and versatile enough to handle the complex and shifting problems that the island will face in the years ahead.
JoAnn Yukimura is the only candidate for Mayor who fits this description. But, beyond that, the Mayor will need the help of all of the people of Kauai to get through these manmade events from afar to an even better place and community that Kauai can be.
Aloha, Brad
News that Caught My Attention for Today
I'm going to save some time today and just list the news articles that caught my attention for the day, rather than repost them here. You can click on the links to see them. They're all good:
Excellent Two-Part Video Interview on the Economy
Recession Alarm Rings Around the World 10/24/08
Corporate 'Capitalists' clamoring to be Socialists
Regarding Trends Up or Down and Oil
Brief Timeline of Economic Events
Aloha, Brad
Excellent Two-Part Video Interview on the Economy
Recession Alarm Rings Around the World 10/24/08
Corporate 'Capitalists' clamoring to be Socialists
Regarding Trends Up or Down and Oil
Brief Timeline of Economic Events
Aloha, Brad
Friday, October 24, 2008
Pennsylvania: Where the Next Election can be Stolen?
Commentators are talking about Pennsylvania as the state that Republicans might be able to flip away from Obama even though Obama is ahead in polls there by a healthy margin. McCain has to be able to turn a state like Pennsylvania and get all of the toss-ups to have a chance to win. These people won't go quietly and honestly. What do the commentators know that we don't?
Well, it just so happens Pennsylvania has a fundamental weakness in its computer-based vote-counting process. Pennsylvania is also the home state of an inherited-wealth good buddy of McCain's. If McCain is to flip Pennsylvania and win the election, here is how he might do it:
Pennsylvania Primary Voters Fraud - Diebold Electronic Voting ...Apr 23, 2008 ... Blatant, in-your-face, vote count fraud going on in Pennsylvania. ... These machines are a joke and so are the election results. ...www.popularmechanics.com/technology/upgrade/4260505.html?series=46 - 61k
Scoop: Michael Collins: Election Fraud in Pennsylvania?
Apr 20, 2008 ... Our election boards routinely sign contracts agreeing that the computer programs that count our votes are the trade secrets of the e-voting ...www.scoop.co.nz/stories/HL0804/S00288.htm - 70k
Miller-McCune Article Faulty Machines Ready to Count Your Vote
May 12, 2008 ... Even with a paper record on computer voting machines, scientists have ... 'The main issue is turning over the counting of our elections to ...www.miller-mccune.com/article/371 - 35k
Voting machines, key races cast election spotlight on Pa.
Nov 2, 2006 ... Some high-profile computer mishaps during primary elections in other ... the ' zero-vote' count from the iVotronic before balloting started. ...www.postgazette.com/pg/06306/734962-178.stm - 27k
PA Verified Voting On the other hand the security issues of computer voting are complex, covert, ... Urge our 67 PA County Boards of Elections decide to purchase V-VPB ...www.pa-verifiedvoting.org/ - 6k
VotePA -- Voting Rights and Election Integrity in Pennsylvania The Pennsylvania Election Code clearly provides avenues for members of the public to .... computer scientists have proven electronic voting systems to be ...www.votepa.us/ - 119k
Aloha, Brad
Well, it just so happens Pennsylvania has a fundamental weakness in its computer-based vote-counting process. Pennsylvania is also the home state of an inherited-wealth good buddy of McCain's. If McCain is to flip Pennsylvania and win the election, here is how he might do it:
Pennsylvania Primary Voters Fraud - Diebold Electronic Voting ...Apr 23, 2008 ... Blatant, in-your-face, vote count fraud going on in Pennsylvania. ... These machines are a joke and so are the election results. ...www.popularmechanics.com/technology/upgrade/4260505.html?series=46 - 61k
Scoop: Michael Collins: Election Fraud in Pennsylvania?
Apr 20, 2008 ... Our election boards routinely sign contracts agreeing that the computer programs that count our votes are the trade secrets of the e-voting ...www.scoop.co.nz/stories/HL0804/S00288.htm - 70k
Miller-McCune Article Faulty Machines Ready to Count Your Vote
May 12, 2008 ... Even with a paper record on computer voting machines, scientists have ... 'The main issue is turning over the counting of our elections to ...www.miller-mccune.com/article/371 - 35k
Voting machines, key races cast election spotlight on Pa.
Nov 2, 2006 ... Some high-profile computer mishaps during primary elections in other ... the ' zero-vote' count from the iVotronic before balloting started. ...www.postgazette.com/pg/06306/734962-178.stm - 27k
PA Verified Voting On the other hand the security issues of computer voting are complex, covert, ... Urge our 67 PA County Boards of Elections decide to purchase V-VPB ...www.pa-verifiedvoting.org/ - 6k
VotePA -- Voting Rights and Election Integrity in Pennsylvania The Pennsylvania Election Code clearly provides avenues for members of the public to .... computer scientists have proven electronic voting systems to be ...www.votepa.us/ - 119k
Aloha, Brad
Rasmussen Daily Tracking Poll for 10/24/08
I believe this is a good, accurate poll and report:
http://www.rasmussenreports.com/public_content/politics/election_20082/2008_presidential_election/daily_presidential_tracking_poll
"Daily Presidential Tracking Poll"
Friday, October 24, 2008
"The Rasmussen Reports daily Presidential Tracking Poll for Friday once again shows Barack Obama attracting 52% of the vote while John McCain earns 45%. Tracking Poll results are released every day at 9:30 a.m. Eastern...
Obama leads by sixteen points among women, including a three-point advantage among white women. McCain leads by three among men. Obama now is supported by twelve percent (12%) of Republicans while McCain gets the vote from 10% of Democrats...
Thirty-six percent (36%) of voters have already cast their ballots or plan to vote early this year. That figure includes 37% of Obama supporters and 35% of those for McCain. Forty-nine percent (49%) of African-American voters say they will be voting early. Voters not affiliated with either major party are far less likely to vote early than partisans.
Today’s results mark the 29th straight day that Obama’s support has stayed between 50% or above 52%. During that period, the number voting for McCain has stayed in the 44% to 46% range every day and the gap between the candidates has ranged from four to eight percentage points (see trends).
Fifty-seven percent (57%) of voters have a favorable opinion of Barack Obama while 53% say the same about John McCain. Those figures include 41% with a Very Favorable opinion of Obama and 26% who are that enthusiastic about McCain (see trends). Seventy-six percent (76%) of Democrats have a Very Favorable opinion of Obama. Just 54% of Republicans have a Very Favorable opinion of McCain (see other recent demographic highlights).
Forty-six percent (46%) of all voters say they are certain to vote for Obama and will not change their mind before Election Day. Forty-one percent (41%) are equally certain of their support for McCain.
McCain leads by just two percentage points among Investors while trailing badly among those who do not invest. Investors are generally more supportive of Republican candidates...
Take a moment to predict whether or not the Democrats will have 60 Senate seats following this election.
Rasmussen Reports data indicates that Obama currently has the edge in every state won by John Kerry four years ago. However, of the states won by George Bush, McCain is trailing in four and five others are considered a toss-up. As a result, Electoral College projections now show Obama leading 260-163. When “leaners” are included, Obama leads 286-174. A total of 270 Electoral Votes are needed to win the White House.
[Hypertext map of Electoral College Forecast]
Recent statewide Presidential polls have been released for Arizona, California, Colorado, Delaware, Florida, Georgia, Hawaii, Illinois, Iowa, Kansas, Kentucky, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia and Wisconsin...
Rasmussen Markets data shows Obama with an 86.6% chance of winning in November (see market expectations for key states).
Daily tracking results are collected via telephone surveys of 1,000 likely voters per night and reported on a three-day rolling average basis. The margin of sampling error—for the full sample of 3,000 Likely Voters--is +/- 2 percentage points with a 95% level of confidence..."
Rasmussen Reports is an electronic publishing firm specializing in the collection, publication, and distribution of public opinion polling information.
http://www.rasmussenreports.com/public_content/politics/election_20082/2008_presidential_election/daily_presidential_tracking_poll
"Daily Presidential Tracking Poll"
Friday, October 24, 2008
"The Rasmussen Reports daily Presidential Tracking Poll for Friday once again shows Barack Obama attracting 52% of the vote while John McCain earns 45%. Tracking Poll results are released every day at 9:30 a.m. Eastern...
Obama leads by sixteen points among women, including a three-point advantage among white women. McCain leads by three among men. Obama now is supported by twelve percent (12%) of Republicans while McCain gets the vote from 10% of Democrats...
Thirty-six percent (36%) of voters have already cast their ballots or plan to vote early this year. That figure includes 37% of Obama supporters and 35% of those for McCain. Forty-nine percent (49%) of African-American voters say they will be voting early. Voters not affiliated with either major party are far less likely to vote early than partisans.
Today’s results mark the 29th straight day that Obama’s support has stayed between 50% or above 52%. During that period, the number voting for McCain has stayed in the 44% to 46% range every day and the gap between the candidates has ranged from four to eight percentage points (see trends).
Fifty-seven percent (57%) of voters have a favorable opinion of Barack Obama while 53% say the same about John McCain. Those figures include 41% with a Very Favorable opinion of Obama and 26% who are that enthusiastic about McCain (see trends). Seventy-six percent (76%) of Democrats have a Very Favorable opinion of Obama. Just 54% of Republicans have a Very Favorable opinion of McCain (see other recent demographic highlights).
Forty-six percent (46%) of all voters say they are certain to vote for Obama and will not change their mind before Election Day. Forty-one percent (41%) are equally certain of their support for McCain.
McCain leads by just two percentage points among Investors while trailing badly among those who do not invest. Investors are generally more supportive of Republican candidates...
Take a moment to predict whether or not the Democrats will have 60 Senate seats following this election.
Rasmussen Reports data indicates that Obama currently has the edge in every state won by John Kerry four years ago. However, of the states won by George Bush, McCain is trailing in four and five others are considered a toss-up. As a result, Electoral College projections now show Obama leading 260-163. When “leaners” are included, Obama leads 286-174. A total of 270 Electoral Votes are needed to win the White House.
[Hypertext map of Electoral College Forecast]
Recent statewide Presidential polls have been released for Arizona, California, Colorado, Delaware, Florida, Georgia, Hawaii, Illinois, Iowa, Kansas, Kentucky, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia and Wisconsin...
Rasmussen Markets data shows Obama with an 86.6% chance of winning in November (see market expectations for key states).
Daily tracking results are collected via telephone surveys of 1,000 likely voters per night and reported on a three-day rolling average basis. The margin of sampling error—for the full sample of 3,000 Likely Voters--is +/- 2 percentage points with a 95% level of confidence..."
Rasmussen Reports is an electronic publishing firm specializing in the collection, publication, and distribution of public opinion polling information.
OPEC Agrees on Output Cut, Oil Slide Goes On
Video at: http://www.cnbc.com/id/27356328
"OPEC Agrees on Sharp Output Cut, Oil Slide Goes On"
By Reuters 24 Oct 2008 09:38 AM ET
"An emergency OPEC meeting on Friday reached swift agreement to chop production by 1.5 million barrels per day (bpd) in an effort to halt a deep oil price slide.
International benchmark U.S. crude has slumped by close to 60 percent from a record high of $147.27 hit in July.
On Friday, it fell again to below $63 a barrel.
"The decision was straightforward," Saudi Oil Minister Ali al-Naimi said after the meeting. "OPEC will do whatever is necessary to balance oil markets."
In the world's biggest energy consumer the United States, oil prices and economic weakness have been major factors in the run-up to the November presidential election.
Washington was quick to criticize OPEC's decision.
"It has always been our view that the value of commodities, including oil, should be determined in open, competitive markets and not by these kinds of anti-market production decisions," White House spokesman Tony Fratto said.
For the Organization of the Petroleum Exporting Countries, the speed of the oil market's collapse after a record rally has stirred memories of the Asian financial crisis in the late 1990s.
OPEC's sluggish response then as demand disappeared and oil stocks mounted up helped to push oil to less than $10 in 1998.
"OPEC is showing it is not going to make that mistake again," said David Kirsch, a manager at Washington-based PFC Energy.
Before the roughly two hours of talks, which ended just before noon (1000 GMT), ministers had agreed about the need to reduce production, but differed over the extent of a cut.
Saudi Arabia and other core Gulf producers have relatively low price requirements and are nervous about further destruction of demand in consumer countries as the world economy falters.
They had favored a relatively modest reduction of around a million bpd, delegates said.
Iran and others are more dependent on higher oil revenues and was among those who had pushed for a deeper cut of around 2 million bpd.
(Watch Qatari Oil Minister Abdullah Bin Hamad al-Attiyah above).
Show of Unity
But the extent of the market's collapse focused minds and the two sides soon met in the middle.
"The message to the market is, first, of the strength and unity of OPEC in terms of its decisions. There was no dispute or fight, here we were all in agreement," said Venezuela's Energy and Petroleum Minister Rafael Ramirez in an interview with Venezuelan state television.
OPEC's President Chakib Khelil of Algeria said the only option for member countries was to respect the new agreement.
"They don't have a choice. What choice do they have? See the oil price go down to lower levels? They'll make the cuts," he said.
He also said OPEC would take further action if necessary before the next scheduled meeting in December in Oran, Algeria.
Under Friday's agreement, the 1.5 million bpd being removed from the September production ceiling of 28.8 million bpd includes 466,000 bpd less from top exporter Saudi Arabia and 199,000 bpd from Iran, the second biggest exporter, OPEC said in a communique.
Although the group said at its September meeting it would strictly adhere to targets, it is still pumping above its collective ceiling.
Khelil said the total removed from the market by the end of the year would be closer to 1.8 million bpd as overproduction was eliminated.
Saudi Arabia, the only OPEC member to be pumping significantly above target, has already reduced supplies slightly.
It unilaterally increased its production when prices were racing to their July record."
"OPEC Agrees on Sharp Output Cut, Oil Slide Goes On"
By Reuters 24 Oct 2008 09:38 AM ET
"An emergency OPEC meeting on Friday reached swift agreement to chop production by 1.5 million barrels per day (bpd) in an effort to halt a deep oil price slide.
International benchmark U.S. crude has slumped by close to 60 percent from a record high of $147.27 hit in July.
On Friday, it fell again to below $63 a barrel.
"The decision was straightforward," Saudi Oil Minister Ali al-Naimi said after the meeting. "OPEC will do whatever is necessary to balance oil markets."
In the world's biggest energy consumer the United States, oil prices and economic weakness have been major factors in the run-up to the November presidential election.
Washington was quick to criticize OPEC's decision.
"It has always been our view that the value of commodities, including oil, should be determined in open, competitive markets and not by these kinds of anti-market production decisions," White House spokesman Tony Fratto said.
For the Organization of the Petroleum Exporting Countries, the speed of the oil market's collapse after a record rally has stirred memories of the Asian financial crisis in the late 1990s.
OPEC's sluggish response then as demand disappeared and oil stocks mounted up helped to push oil to less than $10 in 1998.
"OPEC is showing it is not going to make that mistake again," said David Kirsch, a manager at Washington-based PFC Energy.
Before the roughly two hours of talks, which ended just before noon (1000 GMT), ministers had agreed about the need to reduce production, but differed over the extent of a cut.
Saudi Arabia and other core Gulf producers have relatively low price requirements and are nervous about further destruction of demand in consumer countries as the world economy falters.
They had favored a relatively modest reduction of around a million bpd, delegates said.
Iran and others are more dependent on higher oil revenues and was among those who had pushed for a deeper cut of around 2 million bpd.
(Watch Qatari Oil Minister Abdullah Bin Hamad al-Attiyah above).
Show of Unity
But the extent of the market's collapse focused minds and the two sides soon met in the middle.
"The message to the market is, first, of the strength and unity of OPEC in terms of its decisions. There was no dispute or fight, here we were all in agreement," said Venezuela's Energy and Petroleum Minister Rafael Ramirez in an interview with Venezuelan state television.
OPEC's President Chakib Khelil of Algeria said the only option for member countries was to respect the new agreement.
"They don't have a choice. What choice do they have? See the oil price go down to lower levels? They'll make the cuts," he said.
He also said OPEC would take further action if necessary before the next scheduled meeting in December in Oran, Algeria.
Under Friday's agreement, the 1.5 million bpd being removed from the September production ceiling of 28.8 million bpd includes 466,000 bpd less from top exporter Saudi Arabia and 199,000 bpd from Iran, the second biggest exporter, OPEC said in a communique.
Although the group said at its September meeting it would strictly adhere to targets, it is still pumping above its collective ceiling.
Khelil said the total removed from the market by the end of the year would be closer to 1.8 million bpd as overproduction was eliminated.
Saudi Arabia, the only OPEC member to be pumping significantly above target, has already reduced supplies slightly.
It unilaterally increased its production when prices were racing to their July record."
More on the Recent Hawaii Energy Proposal
From Gary Hooser: http://garyhooser.livejournal.com/25661.html
Hawaii Energy Proposal - Transformational
The recent agreement reached between the State of Hawaii and HECO, the State’s primary energy provider has the potential to fundamentally transform the future of energy in our state.
Unfortunately the local newspapers chose to focus only on the sexy, expensive and potentially controversial proposal to lay an undersea cable between Maui County and the City and County of Honolulu.
The Honolulu Advertiser http://www.honoluluadvertiser.com/article/20081021/NEWS01/810210358/1001
The Honolulu Star Bulletin http://www.starbulletin.com/news/hawaiinews/20081021_Isles_power_up_clean-energy_agreement.html
Totally missing from the stories covered in local media were the provisions on decoupling and feed-in tariff. Also missing from the local news was the lifting of net metering caps, the raising of the Portfolio Standards, the removal of “efficiency savings” from the Portfolio Standard definitions, the restriction against the development of new fossil fuel generators, and numerous other innovative and forward thinking proposals.
This agreement represents the culmination of years of groundwork that has been set into place by the legislature and the recent efforts and very productive collaboration between the Department of Business, Economic Development and Tourism and the U.S. Department of Energy.
A summary of the agreement:
1) Agreement to an additional 1,000 MW of renewable energy resources on Oahu.
2) Renewable Portfolio Standards will be increased to 25% by 2020 and 40% by 2030.
3) Energy savings from energy efficiency shall not count toward the RPS goals after 2014.
4) Commit to expeditiously integrate up to 400 MW of wind into the Oahu system.
5) The State, in coordination with developers, contractors, and the utility will be responsible for siting and permitting an undersea cable system – and seek federal funding assistance. Additional taxpayer and or rate payer funding may also be needed.
6) The electric utility should no longer be compensated under a model which inherently encourages increased electricity usage. Decoupling that delinks revenues from profits from electricity sales will be implemented.
7) All parties agree that feed-in tariffs which establish a set of standardized, published power purchase rates will be established.
8) There will be no system-wide cap on net energy metering. Instead there will be a limit on a per-circuit basis to no more than 15% of demand.
9) Aggressive support of alternative fuel vehicles.
10)“Life line” rates shall be established to provide a rate cap for low and fixed income users.
11) 2,500 additional solar hot water installations on a “pay as you save” program.
12) Photovoltaic Host Program.
13) Advanced metering infrastructure.
The complete agreement with detail and dates/benchmarks can be downloaded read here http://hawaii.gov/dcca/areas/dca/HCEI/HECI%20Agreement.pdf
Though I have not delved into the intricate detail – it appears that this agreement is truly ground-breaking and all parties who have played a role in its development should be highly commended. There is of course much work still yet to be done – but this is a huge step in the right direction.Of course the question remains -- When will Kauai be included?
Gary L. Hooser
State Senator
http://www.garyhooser.com
http://garyhooser.livejournal.com/25661.html
Aloha, Brad
Hawaii Energy Proposal - Transformational
The recent agreement reached between the State of Hawaii and HECO, the State’s primary energy provider has the potential to fundamentally transform the future of energy in our state.
Unfortunately the local newspapers chose to focus only on the sexy, expensive and potentially controversial proposal to lay an undersea cable between Maui County and the City and County of Honolulu.
The Honolulu Advertiser http://www.honoluluadvertiser.com/article/20081021/NEWS01/810210358/1001
The Honolulu Star Bulletin http://www.starbulletin.com/news/hawaiinews/20081021_Isles_power_up_clean-energy_agreement.html
Totally missing from the stories covered in local media were the provisions on decoupling and feed-in tariff. Also missing from the local news was the lifting of net metering caps, the raising of the Portfolio Standards, the removal of “efficiency savings” from the Portfolio Standard definitions, the restriction against the development of new fossil fuel generators, and numerous other innovative and forward thinking proposals.
This agreement represents the culmination of years of groundwork that has been set into place by the legislature and the recent efforts and very productive collaboration between the Department of Business, Economic Development and Tourism and the U.S. Department of Energy.
A summary of the agreement:
1) Agreement to an additional 1,000 MW of renewable energy resources on Oahu.
2) Renewable Portfolio Standards will be increased to 25% by 2020 and 40% by 2030.
3) Energy savings from energy efficiency shall not count toward the RPS goals after 2014.
4) Commit to expeditiously integrate up to 400 MW of wind into the Oahu system.
5) The State, in coordination with developers, contractors, and the utility will be responsible for siting and permitting an undersea cable system – and seek federal funding assistance. Additional taxpayer and or rate payer funding may also be needed.
6) The electric utility should no longer be compensated under a model which inherently encourages increased electricity usage. Decoupling that delinks revenues from profits from electricity sales will be implemented.
7) All parties agree that feed-in tariffs which establish a set of standardized, published power purchase rates will be established.
8) There will be no system-wide cap on net energy metering. Instead there will be a limit on a per-circuit basis to no more than 15% of demand.
9) Aggressive support of alternative fuel vehicles.
10)“Life line” rates shall be established to provide a rate cap for low and fixed income users.
11) 2,500 additional solar hot water installations on a “pay as you save” program.
12) Photovoltaic Host Program.
13) Advanced metering infrastructure.
The complete agreement with detail and dates/benchmarks can be downloaded read here http://hawaii.gov/dcca/areas/dca/HCEI/HECI%20Agreement.pdf
Though I have not delved into the intricate detail – it appears that this agreement is truly ground-breaking and all parties who have played a role in its development should be highly commended. There is of course much work still yet to be done – but this is a huge step in the right direction.Of course the question remains -- When will Kauai be included?
Gary L. Hooser
State Senator
http://www.garyhooser.com
http://garyhooser.livejournal.com/25661.html
Aloha, Brad
Amazing Stats
As I check the Japanese markets now, late on Oct. 23rd HST or Oct. 24th their time, they are down today almost another 10% for the day. The Japanese markets are now down 50% since their highs this past summer. The German and British markets are down 40% from their highs this past summer, prior to opening today. The American markets are down 35% from their highs this past summer, prior to opening tomorrow. Oil is down 55% from its highs over the summer. Those are some amazing numbers. These are facinating times we live in.
Aloha, Brad
Aloha, Brad
Thursday, October 23, 2008
JoAnn Yukimura: Recent Letters in Support
http://www.kauaiworld.com/articles/2008/10/21/opinion/letters_to_the_editor/doc48fd7277e2906655865390.txt
"Solutions for needs"
"Concerns for the present and future of Kaua‘i weigh heavily in the hearts of residents of the Garden Island. Kaua‘i needs among other pressing needs affordable housing, solid waste management, alternative energy initiatives and drug abuse prevention.
We need JoAnn Yukimura to lead us through present needs and to take us to a sustainable future.
We have been supporters of JoAnn Yukimura since she first ran for Kauai County Council in 1976. Through the years she has demonstrated her ability to take challenges as they come, put each challenge into perspective, and find solutions for the common good. Kaua‘i needs JoAnn’s experience, her thoughtful understanding of the island’s needs and problems, her commitment to finding solutions and her passion in keeping Kaua‘i Kaua‘i.
Needs plus solutions equals JoAnn Yukimura, mayor."
• Karl and Catherine Lo, Koloa
http://www.kauaiworld.com/articles/2008/10/22/opinion/letters_to_the_editor/doc48fec23393fa2353890186.txt
"Proven leadership for Kaua‘i"
"Kaua‘i has always seemed poised to become a truly magnificent place, not for preserving its legendary natural beauty, but by becoming a model for humans living sustainably with the land.
JoAnn Yukimura is a candidate who will move Kaua‘i forward. She has such a profound vision for this place, for making it a model community where we all can live and prosper. She has dedicated her life to this pursuit through the easy and difficult times. Her passion for the island and its people is evident to all who meet her. She is so involved in so many activities it sometimes appears there must be two of her on-island. She does not just “talk story,” she is part of the story. When she brings people together she always makes sure that diametrically opposed views are represented. She helps them realize the important features of each other’s views and then together they create a collaborative response. Most of the times, all are satisfied, but sometimes, like the TVR (transient vacation rental) bill, lingering resentment remains. (She is still working on getting amendments to this bill passed for agricultural lands.)
I find in these cases, people do not realize the effort JoAnn puts in behind the scene to get a compromise that is better than what is initially offered.
One thing about JoAnn running for mayor is that her important strong voice will no longer be on the council. We definitely need JoAnn in a prominent role to help us improve Kaua‘i. This is even more critical as the “economic tsunami” approaches Kaua‘i. Do any of us really believe an inexperienced leader should lead us through the most troubling times since the Great Depression? I want a visionary, intelligent, committed, experienced leader in these times and that is JoAnn."
• Neil Clendeninn, Hanalei
Aloha,
I am Neil Clendeninn. Currently I am working in JoAnn Yukimura’s campaign office as “Campaign Manager,” which is a glorified title for the person who needs to help get it done. I am writing you today to ask you to help elect JoAnn Yukimura as Mayor.
How can you help do this?
One of the most effective campaign strategies is person-to-person communication. Call, email, write, and/or visit at least 10 friends and convince them to vote for JoAnn. Ask them to do the same with 10 of their friends. Person-to-person campaigning could win this election for JoAnn. Please read below why I support JoAnn and how you can convince others to support her.
I have to admit that this is my first campaign. I was always politically aware but never really participated actively in politics. Suddenly this year I have gotten very involved. Was it the Obama effect? I am not sure but all of a sudden I was contributing to candidates and volunteering for work on campaigns. I am an Obama steering committee member as well as participant in other campaigns. However, the candidacy that I am most passionate about is JoAnn’s bid for Mayor.
I had been coming regularly to Kauai since 1978 and love this place. I moved here full time in 2003 and have enjoyed every minute since. It is my home and I feel compelled to make it the best place it can be to live.
Over the many years that I have visited, and then lived here, I have always noticed that Kauai seemed poised to become a truly magnificent place. I am not talking about its legendary natural beauty but more about the human atmosphere and living conditions. However, it often seemed stuck, unable to move forward fully.
Just before moving here I went back to school, and studied architecture and urban planning and did my thesis, which was a fairly large tome, on Lihue and its future. Of the many citizens I interviewed for my thesis, JoAnn made a significant impression on me. Her love and commitment to this island were evident in every word she uttered.
JoAnn has such a profound vision for Kauai, for making it a model community where we all can live and prosper. She has dedicated her life to this pursuit through the easy, and the difficult times. Her passion for the island and its people is evident to all who meet her. Living here I have found working with JoAnn has been a real joy. She is so involved in so many activities it sometimes appears there must be two of her on island. She does not just “Talk Story” she is part of the story. When she brings people together she always makes sure that different points of view are represented. She helps them realize the important features of each group’s view point and then together they create a collaborative response that most can live with happily.
This is not just for social issues on island but for many of the bills JoAnn presents before the Council or has to amend at Council. I am amazed at how she is able to reason with people and get a consensus out of otherwise diametrically opposed views. Most of the time the result is satisfying to all but sometimes, like the TVR (transient vacation rental) bill, lingering resentment remains. (She is still working on getting amendments to this bill passed for agricultural lands.) I find in these cases, people may not realize the effort JoAnn put in behind the scene to get a compromise that was better than the alternative initially offered.
One important thing about JoAnn running for Mayor is that her unique strong voice will no longer be on the Council. If she is not Mayor, then her voice will not be loudly heard in the political arena on Kauai. We cannot let this happen. We definitely need JoAnn in a prominent role to help us improve Kauai. This is even more critical as the “economic tsunami” approaches Kauai.
Do any of us really believe an inexperienced leader could successfully lead us through the most troubling times since the Great Depression?
I want a thoughtful, intelligent, committed, experienced leader in these times and that is JoAnn!
So what can we do?
I would like to ask you if you feel as I do to pick up the phone, or send an email or knock on doors and convince at least ten people why they should be voting for JoAnn. Use any and all truthful methods to convince them. If they have issues or questions have them view JoAnn’s website, http://www.joannyukimura.com/, or call the office at 246-0512 and ask for myself or talk with some of the other volunteers. They can even seek out JoAnn and ask her the hard questions. She is visible around the island and is currently knocking on doors canvassing for votes. She even responds to email questions; she is a very accessible leader.
If you find supporters who will vote for JoAnn, please ask them to call 10 of their friends to generate further support. We could effectively reach most of the island with this person-to-person campaign.
We cannot lose this election; too much is at stake regarding Kauai and the lives we all live here. JoAnn is the only leader who has the vision and experience to lead us through these very difficult times. Energy, economy, planning, jobs, tourism, sustainability - all issues JoAnn has worked on directly even before she entered politics. There is no comparison between JoAnn's commitment, experience, leadership and vision and her opponent’s.
Please help get out the vote for Joann Yukimura for Mayor with ohana and friends!
Mahalo,
Neil Clendeninn, M.D., Ph.D
"Solutions for needs"
"Concerns for the present and future of Kaua‘i weigh heavily in the hearts of residents of the Garden Island. Kaua‘i needs among other pressing needs affordable housing, solid waste management, alternative energy initiatives and drug abuse prevention.
We need JoAnn Yukimura to lead us through present needs and to take us to a sustainable future.
We have been supporters of JoAnn Yukimura since she first ran for Kauai County Council in 1976. Through the years she has demonstrated her ability to take challenges as they come, put each challenge into perspective, and find solutions for the common good. Kaua‘i needs JoAnn’s experience, her thoughtful understanding of the island’s needs and problems, her commitment to finding solutions and her passion in keeping Kaua‘i Kaua‘i.
Needs plus solutions equals JoAnn Yukimura, mayor."
• Karl and Catherine Lo, Koloa
http://www.kauaiworld.com/articles/2008/10/22/opinion/letters_to_the_editor/doc48fec23393fa2353890186.txt
"Proven leadership for Kaua‘i"
"Kaua‘i has always seemed poised to become a truly magnificent place, not for preserving its legendary natural beauty, but by becoming a model for humans living sustainably with the land.
JoAnn Yukimura is a candidate who will move Kaua‘i forward. She has such a profound vision for this place, for making it a model community where we all can live and prosper. She has dedicated her life to this pursuit through the easy and difficult times. Her passion for the island and its people is evident to all who meet her. She is so involved in so many activities it sometimes appears there must be two of her on-island. She does not just “talk story,” she is part of the story. When she brings people together she always makes sure that diametrically opposed views are represented. She helps them realize the important features of each other’s views and then together they create a collaborative response. Most of the times, all are satisfied, but sometimes, like the TVR (transient vacation rental) bill, lingering resentment remains. (She is still working on getting amendments to this bill passed for agricultural lands.)
I find in these cases, people do not realize the effort JoAnn puts in behind the scene to get a compromise that is better than what is initially offered.
One thing about JoAnn running for mayor is that her important strong voice will no longer be on the council. We definitely need JoAnn in a prominent role to help us improve Kaua‘i. This is even more critical as the “economic tsunami” approaches Kaua‘i. Do any of us really believe an inexperienced leader should lead us through the most troubling times since the Great Depression? I want a visionary, intelligent, committed, experienced leader in these times and that is JoAnn."
• Neil Clendeninn, Hanalei
Aloha,
I am Neil Clendeninn. Currently I am working in JoAnn Yukimura’s campaign office as “Campaign Manager,” which is a glorified title for the person who needs to help get it done. I am writing you today to ask you to help elect JoAnn Yukimura as Mayor.
How can you help do this?
One of the most effective campaign strategies is person-to-person communication. Call, email, write, and/or visit at least 10 friends and convince them to vote for JoAnn. Ask them to do the same with 10 of their friends. Person-to-person campaigning could win this election for JoAnn. Please read below why I support JoAnn and how you can convince others to support her.
I have to admit that this is my first campaign. I was always politically aware but never really participated actively in politics. Suddenly this year I have gotten very involved. Was it the Obama effect? I am not sure but all of a sudden I was contributing to candidates and volunteering for work on campaigns. I am an Obama steering committee member as well as participant in other campaigns. However, the candidacy that I am most passionate about is JoAnn’s bid for Mayor.
I had been coming regularly to Kauai since 1978 and love this place. I moved here full time in 2003 and have enjoyed every minute since. It is my home and I feel compelled to make it the best place it can be to live.
Over the many years that I have visited, and then lived here, I have always noticed that Kauai seemed poised to become a truly magnificent place. I am not talking about its legendary natural beauty but more about the human atmosphere and living conditions. However, it often seemed stuck, unable to move forward fully.
Just before moving here I went back to school, and studied architecture and urban planning and did my thesis, which was a fairly large tome, on Lihue and its future. Of the many citizens I interviewed for my thesis, JoAnn made a significant impression on me. Her love and commitment to this island were evident in every word she uttered.
JoAnn has such a profound vision for Kauai, for making it a model community where we all can live and prosper. She has dedicated her life to this pursuit through the easy, and the difficult times. Her passion for the island and its people is evident to all who meet her. Living here I have found working with JoAnn has been a real joy. She is so involved in so many activities it sometimes appears there must be two of her on island. She does not just “Talk Story” she is part of the story. When she brings people together she always makes sure that different points of view are represented. She helps them realize the important features of each group’s view point and then together they create a collaborative response that most can live with happily.
This is not just for social issues on island but for many of the bills JoAnn presents before the Council or has to amend at Council. I am amazed at how she is able to reason with people and get a consensus out of otherwise diametrically opposed views. Most of the time the result is satisfying to all but sometimes, like the TVR (transient vacation rental) bill, lingering resentment remains. (She is still working on getting amendments to this bill passed for agricultural lands.) I find in these cases, people may not realize the effort JoAnn put in behind the scene to get a compromise that was better than the alternative initially offered.
One important thing about JoAnn running for Mayor is that her unique strong voice will no longer be on the Council. If she is not Mayor, then her voice will not be loudly heard in the political arena on Kauai. We cannot let this happen. We definitely need JoAnn in a prominent role to help us improve Kauai. This is even more critical as the “economic tsunami” approaches Kauai.
Do any of us really believe an inexperienced leader could successfully lead us through the most troubling times since the Great Depression?
I want a thoughtful, intelligent, committed, experienced leader in these times and that is JoAnn!
So what can we do?
I would like to ask you if you feel as I do to pick up the phone, or send an email or knock on doors and convince at least ten people why they should be voting for JoAnn. Use any and all truthful methods to convince them. If they have issues or questions have them view JoAnn’s website, http://www.joannyukimura.com/, or call the office at 246-0512 and ask for myself or talk with some of the other volunteers. They can even seek out JoAnn and ask her the hard questions. She is visible around the island and is currently knocking on doors canvassing for votes. She even responds to email questions; she is a very accessible leader.
If you find supporters who will vote for JoAnn, please ask them to call 10 of their friends to generate further support. We could effectively reach most of the island with this person-to-person campaign.
We cannot lose this election; too much is at stake regarding Kauai and the lives we all live here. JoAnn is the only leader who has the vision and experience to lead us through these very difficult times. Energy, economy, planning, jobs, tourism, sustainability - all issues JoAnn has worked on directly even before she entered politics. There is no comparison between JoAnn's commitment, experience, leadership and vision and her opponent’s.
Please help get out the vote for Joann Yukimura for Mayor with ohana and friends!
Mahalo,
Neil Clendeninn, M.D., Ph.D
Bruce Pleas: Should be on Kauai County Council
http://www.kauaiworld.com/articles/2008/10/22/opinion/letters_to_the_editor/doc48fec23393fa2353890186.txt
"Pleas should be on council"
"There are still some outstanding new candidates running for County Council along with the five incumbents.
However, for me, the one person who could immediately sit in one of those seven council chairs and do an outstanding job is Bruce Pleas.
I have watched this young man attend and testify at many council and committee meetings and he always brings a lot valuable information to the table. He crosses all his “T’s” and dots every “I” and never gives unsubstantiated testimony. In fact, many of his suggestions have been incorporated into bills and ordinances that the council has passed.
He is a pillar of strength in his Westside community and the people lean on him for direction and advice.
He is truly a dark horse in the race for one of those council seats but no one in that race including some incumbents is more qualified."
• Glenn Mickens, Kapaa
"Pleas should be on council"
"There are still some outstanding new candidates running for County Council along with the five incumbents.
However, for me, the one person who could immediately sit in one of those seven council chairs and do an outstanding job is Bruce Pleas.
I have watched this young man attend and testify at many council and committee meetings and he always brings a lot valuable information to the table. He crosses all his “T’s” and dots every “I” and never gives unsubstantiated testimony. In fact, many of his suggestions have been incorporated into bills and ordinances that the council has passed.
He is a pillar of strength in his Westside community and the people lean on him for direction and advice.
He is truly a dark horse in the race for one of those council seats but no one in that race including some incumbents is more qualified."
• Glenn Mickens, Kapaa
Ambitious Plan for Wind Power in Hawaii
See videos at: http://kgmb9.com/main/content/view/10629/40/
and: http://kgmb9.com/main/content/view/10647/108/
http://www.honoluluadvertiser.com/article/20081021/NEWS01/810210358/1001...
Posted on: Tuesday, October 21, 2008
"Ambitious plan for wind power"
State officials, HECO sign a deal...
By Rick Daysog Advertiser Staff Writer
"About a third of O'ahu's electricity needs could someday be met by wind farms, under a sweeping agreement signed yesterday by state officials and Hawaiian Electric Co.
Gov. Linda Lingle said the accord will help reduce the state's dependence on foreign oil, improve the reliability of HECO's electrical system and boost the state economy by keeping hundreds of millions of dollars in Hawai'i that would otherwise be sent to foreign oil producers.
"This agreement is historic. It's transformational, and it will make Hawai'i a world leader and a model in renewable energy," Lingle said.
But critics say the plan would be costly for consumers and relies too heavily on wind power at the expense of cheaper technologies such as solar energy.
"It's a bunch of hot air," said Henry Curtis, executive director of the environmental group Life of the Land Hawaii.
Lingle; U.S. Sen. Daniel K. Inouye; Constance Lau, chief executive officer of HECO's parent, Hawaiian Electric Industries Inc.; and other state officials were on hand at the state Capitol yesterday to sign the 50-page agreement, which is part of the Lingle administration's ambitious plan to move Hawai'i toward getting 70 percent of its energy from clean-energy sources by 2030.
The cornerstone of the deal calls for HECO to buy about 400 megawatts — or about a third of the company's electricity demand on O'ahu — from wind farms on Moloka'i and Lana'i.
Yesterday, Lingle outlined plans to build an undersea cable connecting O'ahu, Maui, Moloka'i and Lana'i to carry that wind-generated electricity to O'ahu.
Lingle said she could not provide estimates on the cost of the cable but said it would likely be paid by HECO customers, federal grants and private money.
"That (the cost) was the one major component I can't tell you today," Lingle said. "It's a little bit early."
route undecided
Curtis, whose organization was one of several groups that successfully challenged HECO's plans to build the controversial Wa'ahila Ridge power lines in the late 1990s, said he was told by state officials that the costs for the cable could range from $500 million to $1 billion, depending upon the final route.
Curtis, who took part in a state/private-sector task force that helped shape yesterday's agreement, said the range for the cost is wide because state officials and HECO executives still haven't settled on the route of the cable.
Some plans call for the cable to start on Lana'i as the center, or the hub, connecting to Maui, O'ahu and Moloka'i. Other plans have Moloka'i as the hub connecting to Maui, O'ahu and Lana'i.
Curtis said he expects a long permitting process since effects on the cost to consumers, endangered species and other environmental concerns would have to be examined.
"It seems to me that consumers will be a lot happier if they put solar panels on their roofs," Curtis said.
Not all environmental groups share that view.
Jeff Mikulina, executive director of the Blue Planet Foundation, hailed the deal, saying it "puts Hawai'i on course for cleaner energy sources, smarter use of energy and lower utility bills."
"Today's agreement represents transformative change," said Mikulina, former director of the Hawai'i chapter of the Sierra Club.
Lingle said that over the long term, Hawai'i's economy would benefit from being self-sufficient. Depending on the price of oil, state consumers send $5 billion to $7 billion out of state for fuel.
If the state could offset about $3 billion of those costs by developing locally produced renewable fuels, much of that money would stay in the Islands, where it would create jobs and opportunities for local residents, she said.
transforming HECO
For HECO, the agreement would transform the way the company does business. Long known as a company that produces and distributes electricity, HECO would look more like an energy-services company that buys its power from third-party producers.
In the deal, Hawaiian Electric Co. said it would phase out its older, less efficient fossil-fuel burning power plants as more renewable sources of power come online.
The company also would move toward developing a "smart grid" system that gives consumers greater control of their energy use and their electricity bills.
HECO CEO Lau called yesterday's agreement signing "a historic moment."
"It really reminded me of what everybody feels about when they are about to walk down the altar. What I remember about that time is that there's tremendous excitement, and there's also a lot of trepidation, because you say "what the heck am I getting into?" she said.
'But you know it's the right thing to do, and that you are going to sign that marriage contract.'"
and: http://kgmb9.com/main/content/view/10647/108/
http://www.honoluluadvertiser.com/article/20081021/NEWS01/810210358/1001...
Posted on: Tuesday, October 21, 2008
"Ambitious plan for wind power"
State officials, HECO sign a deal...
By Rick Daysog Advertiser Staff Writer
"About a third of O'ahu's electricity needs could someday be met by wind farms, under a sweeping agreement signed yesterday by state officials and Hawaiian Electric Co.
Gov. Linda Lingle said the accord will help reduce the state's dependence on foreign oil, improve the reliability of HECO's electrical system and boost the state economy by keeping hundreds of millions of dollars in Hawai'i that would otherwise be sent to foreign oil producers.
"This agreement is historic. It's transformational, and it will make Hawai'i a world leader and a model in renewable energy," Lingle said.
But critics say the plan would be costly for consumers and relies too heavily on wind power at the expense of cheaper technologies such as solar energy.
"It's a bunch of hot air," said Henry Curtis, executive director of the environmental group Life of the Land Hawaii.
Lingle; U.S. Sen. Daniel K. Inouye; Constance Lau, chief executive officer of HECO's parent, Hawaiian Electric Industries Inc.; and other state officials were on hand at the state Capitol yesterday to sign the 50-page agreement, which is part of the Lingle administration's ambitious plan to move Hawai'i toward getting 70 percent of its energy from clean-energy sources by 2030.
The cornerstone of the deal calls for HECO to buy about 400 megawatts — or about a third of the company's electricity demand on O'ahu — from wind farms on Moloka'i and Lana'i.
Yesterday, Lingle outlined plans to build an undersea cable connecting O'ahu, Maui, Moloka'i and Lana'i to carry that wind-generated electricity to O'ahu.
Lingle said she could not provide estimates on the cost of the cable but said it would likely be paid by HECO customers, federal grants and private money.
"That (the cost) was the one major component I can't tell you today," Lingle said. "It's a little bit early."
route undecided
Curtis, whose organization was one of several groups that successfully challenged HECO's plans to build the controversial Wa'ahila Ridge power lines in the late 1990s, said he was told by state officials that the costs for the cable could range from $500 million to $1 billion, depending upon the final route.
Curtis, who took part in a state/private-sector task force that helped shape yesterday's agreement, said the range for the cost is wide because state officials and HECO executives still haven't settled on the route of the cable.
Some plans call for the cable to start on Lana'i as the center, or the hub, connecting to Maui, O'ahu and Moloka'i. Other plans have Moloka'i as the hub connecting to Maui, O'ahu and Lana'i.
Curtis said he expects a long permitting process since effects on the cost to consumers, endangered species and other environmental concerns would have to be examined.
"It seems to me that consumers will be a lot happier if they put solar panels on their roofs," Curtis said.
Not all environmental groups share that view.
Jeff Mikulina, executive director of the Blue Planet Foundation, hailed the deal, saying it "puts Hawai'i on course for cleaner energy sources, smarter use of energy and lower utility bills."
"Today's agreement represents transformative change," said Mikulina, former director of the Hawai'i chapter of the Sierra Club.
Lingle said that over the long term, Hawai'i's economy would benefit from being self-sufficient. Depending on the price of oil, state consumers send $5 billion to $7 billion out of state for fuel.
If the state could offset about $3 billion of those costs by developing locally produced renewable fuels, much of that money would stay in the Islands, where it would create jobs and opportunities for local residents, she said.
transforming HECO
For HECO, the agreement would transform the way the company does business. Long known as a company that produces and distributes electricity, HECO would look more like an energy-services company that buys its power from third-party producers.
In the deal, Hawaiian Electric Co. said it would phase out its older, less efficient fossil-fuel burning power plants as more renewable sources of power come online.
The company also would move toward developing a "smart grid" system that gives consumers greater control of their energy use and their electricity bills.
HECO CEO Lau called yesterday's agreement signing "a historic moment."
"It really reminded me of what everybody feels about when they are about to walk down the altar. What I remember about that time is that there's tremendous excitement, and there's also a lot of trepidation, because you say "what the heck am I getting into?" she said.
'But you know it's the right thing to do, and that you are going to sign that marriage contract.'"
Credit Spreads, TED, etc.
Current Credit Rates 10/23/08 AM
Ted Spread Chart
2.5695%
LIBOR OverNight
1.2063%
LIBOR 1 Month
3.2588%
LIBOR 3 Month
3.535%
2-Yr Note
1.495%
5-Yr Note
2.522%
10-Yr Note
3.541%
Ted Spread Chart
2.5695%
LIBOR OverNight
1.2063%
LIBOR 1 Month
3.2588%
LIBOR 3 Month
3.535%
2-Yr Note
1.495%
5-Yr Note
2.522%
10-Yr Note
3.541%
Posted on: Tuesday, October 21, 2008
"Credit markets loosen 6th day in a row"
By Madlen Read Associated Press
NEW YORK — "As bank-to-bank lending rates slide lower, the credit climate is looking a bit brighter — at least for stronger companies.
The fear of a complete shutdown in lending is fading, but there remains a sense that when it comes to getting loans, U.S. businesses are going to be divided into haves and have-nots. As a result, the corporate landscape could look very different a year from now.
"The general economy was weakening, and that weakening has taken a turn for the worse. And any company that was already facing more challenging business conditions, when they're confronted by tighter credit, it gives them one less degree of flexibility," said Robert DiClemente, economist at Citigroup.
The auto industry remains in disarray. General Motors Corp., which has been burning through more than $1 billion a month, wants to buy Chrysler to access its currency stockpile, but GM appears to be having trouble lining up financing.
Some other companies are also having trouble nailing down money to tide them over. Circuit City Stores Inc., for one, is preparing to close a fifth of its stores and cut thousands of jobs to avoid filing for Chapter 11 bankruptcy protection, The Wall Street Journal reported yesterday. The Journal said Circuit City has retained investment bank Rothschild Inc. to talk to banks and get emergency financing.
To be sure, companies that appear more creditworthy to banks should find loans more easily and more cheaply if the trends of the past week continue. The London Interbank Offered Rate, or Libor, for three-month dollar loans dropped for the sixth straight day, falling by 0.36 of a percentage point to 4.06 percent.
The recent decline in this rate — which establishes lending costs for businesses and individuals — reflects greater trust in the financial sector after governments around the world have guaranteed billions of dollars worth in bank debt and pledged to buy stakes in ailing banks.
The decrease in Libor has helped ease some demand for Treasury bills, considered the ultimate safe asset. The yield on the three-month T-bill surpassed 1 percent for the first time in nearly two weeks, rising to 1.12 percent from 0.82 percent late Friday.
The Treasury Department auctioned $25 billion in three-month bills at a discount rate of 1.25 percent, up from 0.50 percent last week, and another $26 billion in six-month bills at a discount rate of 1.80 percent, up from 1.10 percent last week. Those higher rates for short-term government debt suggest "continued healing in the credit markets," said Tony Crescenzi of Miller Tabak & Co. in a note yesterday.
As funds slowly take money out of safe assets, they are returning to assets that carry a bit more risk. Crescenzi noted that the mortgage-backed securities market signaled "increased risk-taking" yesterday.
And the market for commercial paper — the unsecured debt that companies sell for short-term financing — continued to improve. Commercial paper rates were generally down 0.20 to 0.40 percentage points for key issuers tapping the market yesterday, including American Express Co., General Electric Inc., HSBC Finance, AT&T Corp. and Coca-Cola, said Kevin Giddis, managing director of fixed income at Morgan Keegan.
Just a few weeks ago, even stronger companies like AT&T were having trouble selling paper for longer than overnight. Now, investors are starting to step in and buy paper with 30-day and 60-day maturities, Giddis said. On Oct. 27, the Federal Reserve is scheduled to start buying commercial paper from issuers that can't find buyers in the market.
In a sign that certain companies remain flexible in the current environment, engineering and construction company The Shaw Group Inc. said it was able to amend its credit facility so it can use up to $200 million as collateral for letters of credit. Meanwhile, toy makers Mattel and Hasbro reiterated they have little debt on their books and adequate cash available, and trucking company Werner Enterprises emphasized that it is a "debt-free company."
Mattel and Werner indicated, though, that they will be affected by the credit crunch indirectly, because many of their customers and suppliers are unable to secure financing."
Aloha, Brad
"Democratic Wave Continues to Build" by Larry Sabato
I voted yesterday here on Kauai and noticed there was a steady stream of people voting while I was. I could tell yesterday that a lot of people will be voting early absentee. The candidates need to be tailoring their campaigns to the fact that a high percentage of the electorate is voting already. The following good piece also points out some impressive stats of early voter turnout elsewhere in the U.S.
From: http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_larry_j_sabato/democratic_wave_continues_to_build
"Democratic Wave Continues to Build"
A Commentary By Larry Sabato
Thursday, October 23, 2008
"Back in 2002 and 2004, the Crystal Ball brought misery to Democrats and joy to Republicans, as we projected the solid GOP victories that occurred in those years. The cycle of politics is not to be denied, and so in 2006 and now in 2008, there is a role reversal. With each passing week, we send Democratic spirits soaring ever higher and depress our Republican readers further.
Yin and yang. The tide goes out, and it comes in. The first shall be last and the last shall be first. And all that stuff.
Just remember, don't credit or blame the weather forecaster for the weather.
Before we give our latest updates for the Electoral College, Congress, and the governors, let's focus briefly on what is happening in the voter turnout arena. We've been monitoring early voting in states such as North Carolina, Georgia, Nevada, and Colorado and it is abundantly clear that registered Democrats are turning out at extraordinary rates, at least so far, and Republicans are not. Take the Tar Heel State, for example. Already 629,296 people have voted early, well above the pace of 2004. Democrats are over 56% of the 2008 total, compared to just 45% in 2004. African-Americans are about 30% of the early vote total, compared to only 17% in 2004. (Our thanks to Crystal Ball contributor Justin Sizemore for this data.) True enough, registered Democrats could be voting for McCain, and if you are a Republican and want to whistle past the graveyard, feel free to believe that. Also true: Late votes count just as much as early votes, but the early voting disparity between the parties in many states is another indication of the "enthusiasm gap" favoring Democrats--a phenomenon we have observed and written about here at the Crystal Ball since the start of the nominating season in early January.
In the nation as a whole, there are approximately 212 million people who are age 18 and over, a universe that constitutes "potential voters" in the presidential election. It is looking increasingly likely that a massive turnout is occurring, with voting already underway in some form almost everywhere. In 2000 we saw 105.4 million people vote in the Bush-Gore contest, a mere 51.2% of the potential electorate. By 2004, when Bush faced off against John Kerry, the turnout soared to 122.3 million, about 60% of the potential voters. This year we will be surprised if turnout isn't between 135 million and 140 million out of the 212 million universe of voters. A turnout like this, representing two-thirds of the electorate, would even exceed that of 1960, when 63% of adult Americans voted (age 21 and up, at that time). The 1960 turnout represented the modern high water mark for voter turnout.
At least theoretically, people of all ideological stripes can celebrate this renaissance in voter participation. Naturally, the actual results will cause some to regret it!
ELECTORAL COLLEGE UPDATE:
Now, let's take a look at our Electoral College update. Just two states have changed categories, which might come as a surprise to people who follow the breathless news reports about all the supposedly dramatic ups and downs in the campaign. At this late juncture, most of it is meaningless background noise. For example, we're long past the point when the vice presidential candidates are going to affect very much. Whatever impact they have has already been "priced in" to the presidential candidates' standing. Palin's goofs and Biden's gaffes are sideshows, for the most part.
Rasmussen Reports is an electronic publishing firm specializing in the collection, publication, and distribution of public opinion polling information.
From: http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_larry_j_sabato/democratic_wave_continues_to_build
"Democratic Wave Continues to Build"
A Commentary By Larry Sabato
Thursday, October 23, 2008
"Back in 2002 and 2004, the Crystal Ball brought misery to Democrats and joy to Republicans, as we projected the solid GOP victories that occurred in those years. The cycle of politics is not to be denied, and so in 2006 and now in 2008, there is a role reversal. With each passing week, we send Democratic spirits soaring ever higher and depress our Republican readers further.
Yin and yang. The tide goes out, and it comes in. The first shall be last and the last shall be first. And all that stuff.
Just remember, don't credit or blame the weather forecaster for the weather.
Before we give our latest updates for the Electoral College, Congress, and the governors, let's focus briefly on what is happening in the voter turnout arena. We've been monitoring early voting in states such as North Carolina, Georgia, Nevada, and Colorado and it is abundantly clear that registered Democrats are turning out at extraordinary rates, at least so far, and Republicans are not. Take the Tar Heel State, for example. Already 629,296 people have voted early, well above the pace of 2004. Democrats are over 56% of the 2008 total, compared to just 45% in 2004. African-Americans are about 30% of the early vote total, compared to only 17% in 2004. (Our thanks to Crystal Ball contributor Justin Sizemore for this data.) True enough, registered Democrats could be voting for McCain, and if you are a Republican and want to whistle past the graveyard, feel free to believe that. Also true: Late votes count just as much as early votes, but the early voting disparity between the parties in many states is another indication of the "enthusiasm gap" favoring Democrats--a phenomenon we have observed and written about here at the Crystal Ball since the start of the nominating season in early January.
In the nation as a whole, there are approximately 212 million people who are age 18 and over, a universe that constitutes "potential voters" in the presidential election. It is looking increasingly likely that a massive turnout is occurring, with voting already underway in some form almost everywhere. In 2000 we saw 105.4 million people vote in the Bush-Gore contest, a mere 51.2% of the potential electorate. By 2004, when Bush faced off against John Kerry, the turnout soared to 122.3 million, about 60% of the potential voters. This year we will be surprised if turnout isn't between 135 million and 140 million out of the 212 million universe of voters. A turnout like this, representing two-thirds of the electorate, would even exceed that of 1960, when 63% of adult Americans voted (age 21 and up, at that time). The 1960 turnout represented the modern high water mark for voter turnout.
At least theoretically, people of all ideological stripes can celebrate this renaissance in voter participation. Naturally, the actual results will cause some to regret it!
ELECTORAL COLLEGE UPDATE:
Now, let's take a look at our Electoral College update. Just two states have changed categories, which might come as a surprise to people who follow the breathless news reports about all the supposedly dramatic ups and downs in the campaign. At this late juncture, most of it is meaningless background noise. For example, we're long past the point when the vice presidential candidates are going to affect very much. Whatever impact they have has already been "priced in" to the presidential candidates' standing. Palin's goofs and Biden's gaffes are sideshows, for the most part.
(A proprietary note: Given the likely Democratic victory, we want first dibs on seeking a publisher's contract for The Book of Biden Gaffes or The Sayings of Vice President Joe (Not the Plumber). Over four or eight years, given Biden's reliable ability to disconnect his brain from his mouth, we suspect the volume will grow to the length of War and Peace.)
Of the two shifts, by far the most significant is VIRGINIA, which we are moving from pure toss-up to LEANS OBAMA. We have been very cautious about the Old Dominion, in part because it's been our home for the better part of six decades. More than most, we know how tough this state can be for a Democratic presidential candidate. But while we continue to disbelieve the national polls showing Obama winning Virginia by 10 percentage points, we now believe that Obama has built a small edge of two or three points in the state. The reasons are clear: Bush, the disastrous economy, the demographic growth of Northern Virginia and its strong Democratic tilt, the momentum built up by recent Democratic victories (Mark Warner in 2001 and soon 2008, Tim Kaine in 2005, and Jim Webb in 2006), and the remarkable voter registration and voter contact efforts of a literal army of Obama staffers and volunteers in the state for a full year.
But it is more than that. The McCain campaign and the state GOP appear to have had a death wish. McCain's staff refused to believe Virginia was truly competitive for too long, and the McCain-Palin visits were few. McCain's brother called Northern Virginians "Commies" and one of McCain's most prominent spokespersons said they were not the "real Virginia." Generally, it is difficult to win the votes of people you are insulting.
The Virginia Republican party is also completely outclassed by the state's Democrats in money and organization. The GOP is being run by a very young, fire-breathing chairman who publicly drew an absurd link between Barack Obama and Osama bin Laden--drawing angry rebukes from the top echelon of the McCain campaign as well as virtually all the senior Republican elected officials in the state. Republicans in Virginia have simply not adapted to the new moderate reality of this Mid-Atlantic state, the twelfth largest in the nation. They insist on running too far to the right, as though this were the Virginia of the Old South. It's not selling anymore.
We'll see whether changes in the last dozen days alter this picture. Virginia is still close. It is not absolutely a done deal for Obama yet.
The second shift is NORTH DAKOTA, from Leans McCain to Toss-Up. This may be a temporary change of color, but we have seen too many polls that are tied in North Dakota to ignore. We also discussed the state situation with two prominent North Dakotans in high public office, one from each party. Both thought McCain would eke it out, but they agreed that an Obama upset is not impossible. Think about this: North Dakota, won by George W. Bush by over 27 percentage points in 2004, is being discussed here as highly competitive. McCain may well win in the end but this one shouldn't even be vaguely close.
With the shifts of Virginia and North Dakota, Obama now has 318 electoral votes and McCain has 171. There are 46 electoral votes in our toss-up category..."
Larry J. Sabato is the director of the Center for Politics at the University of Virginia.
Rasmussen Reports is an electronic publishing firm specializing in the collection, publication, and distribution of public opinion polling information.
FYI: From Gallup.Com: Gallup Daily: Obama’s Likely Voter Lead is 5 to 8 Points
Barack Obama holds a significant lead over John McCain in both Gallup likely voter models -- by 5 points using the “traditional” model and by 8 points using the “expanded” model. Registered voters prefer Obama by 9 points. 10/22/08 Read more at GALLUP.com.
Jewish voters nationwide have grown increasingly comfortable with voting for Barack Obama for president since the Illinois senator secured the Democratic nomination in June. They now favor Obama over John McCain by more than 3 to 1, 74% to 21%. 10/23/08 Read more at GALLUP.com.
Aloha, Brad
Kauai Orca Video Reports
An Orca takes its last breath on Kauai
KHON2 - Honolulu,HI,USA
A juvenile killer whale clings to life rolling in the surf at Brennecke's beach on Kauai. "This animal has been in trouble for a long time, three to four ...
Whale Stranded on Kauai Beach
KGMB9 - Honolulu,HI,USA
A large crowd watched, as an excavator pulled the whale off one of Kauai busiest beaches, in the middle of all the hotels along the south shore. ...
Killer Whale Stranded On Kauai Beach Euthanized
KITV.com - Honolulu,HI,USA
HONOLULU -- Officials euthanized a killer whale that stranded itself on a Kauai beach on Wednesday morning, officials said. The juvenile orca was found at 2 ...
Aloha, Brad
KHON2 - Honolulu,HI,USA
A juvenile killer whale clings to life rolling in the surf at Brennecke's beach on Kauai. "This animal has been in trouble for a long time, three to four ...
Whale Stranded on Kauai Beach
KGMB9 - Honolulu,HI,USA
A large crowd watched, as an excavator pulled the whale off one of Kauai busiest beaches, in the middle of all the hotels along the south shore. ...
Killer Whale Stranded On Kauai Beach Euthanized
KITV.com - Honolulu,HI,USA
HONOLULU -- Officials euthanized a killer whale that stranded itself on a Kauai beach on Wednesday morning, officials said. The juvenile orca was found at 2 ...
Aloha, Brad
Oil Price Temporarily Low?
Regarding recent posts here on the price of oil:
Looking for Good Information on Commodity Deflation
Oil Price Changing Short-term Outlook for Hawaii
KIUC Should Act on Limited Risk Hedging NOW
Why was there the Recent Run-Up and Down of Oil Prices?
Here are two more good new videos to watch on this:
Oil Seen Trading at $95 Bbl in 2009
Oil Prices Plummet
Looking for Good Information on Commodity Deflation
Oil Price Changing Short-term Outlook for Hawaii
KIUC Should Act on Limited Risk Hedging NOW
Why was there the Recent Run-Up and Down of Oil Prices?
Here are two more good new videos to watch on this:
Oil Seen Trading at $95 Bbl in 2009
Oil Prices Plummet
Regarding Budgetary Oil Price Floors for Individual OPEC Countries:
From: www.rgemonitor.com
"GCC Gov't Expenditure: Will Lower Oil Prices Endanger Budget Expansion?"
"2008 budgets expanded cautiously after overspending in previous oil booms led to period of underspending. Falling oil prices may cause governments to cut fiscal spending in 2009. The lowest breakeven oil price that would bring 2008-2009 budgets into balance is in Saudi Arabia ($30/bbl), followed by UAE ($40/bbl) and Qatar ($55/bbl). Therefore, that means that Saudi Arabia can maintain the current level of budget spending even if the oil price were to fall to $30/bbl. The highest breakeven is in Kuwait ($75/bbl), but that is mainly due to the one-off budget transfer of c.$20bn to capitalize the social security system in FY08/09. The average breakeven for GCC is $50/bbl (Merrill Lynch)
Saudi Arabia's breakeven price is among the highest among GCC countries because it is spending oil revenues on a lot of projects. Saudi Arabia will need crude prices to remain above $49/barrel to avoid fiscal deficit. Bahrain and Oman are at risk of running 2009 deficit if the oil price remains around $70/barrel (IMF)." Click Here For Full Analysis
I think KIUC still has some time to begin a staggered strategy on this while the price is still more than 50% off its highs, but time may be of the essence here.
Aloha, Brad
Tuesday, October 21, 2008
Economic Tsunami -- 'What Now?' by James Kunstler
Above image: Illustration of tsunami at http://urbanlegends.about.com/od/naturalwonders/ig/Forces-of-Nature/ Content of this post from http://www.islandbreath.org
"What Now?" by James Kunstler October 20, 2008 on www.kunstler.com
"It's fascinating to read the commentators in mainstream journals like The Financial Times and The Wall Street Journal all strenuously pretending that "the worst is over" (maybe... we hope... fingers crossed... hail Mary full of grace... et cetera). The cluelessness would be funny if it didn't involve a world-changing catastrophe.
All nations that have reached the fork-and-spoon level of civilization are now engineering a vast network of cyber-cables that lead directly from their central bank computers to the Death Star that is hovering above world financial affairs like a giant cosmic vacuum cleaner, sucking up dollars, euros, zlotys, forints, krona, what-have-you. As fast as the keystrokes create currency-pixels, the little electron-denominated units of exchange are sucked out of the terrestrial economies into the black hole of money death. That's what the $700-billion bail-out (excuse me, "rescue plan") and all its associated ventures are about.
To switch metaphors, let's say that we are witnessing the two stages of a tsunami. The current disappearance of wealth in the form of debts repudiated, bets welshed on, contracts canceled, and Lehman Brothers-style sob stories played out is like the withdrawal of the sea. The poor curious little humans stand on the beach transfixed by the strangeness of the event as the water recedes and the sea floor is exposed and all kinds of exotic creatures are seen thrashing in the mud, while the skeletons of historic wrecks are exposed to view, and a great stench of organic decay wafts toward the strand.
Then comes the second stage, the tidal wave itself -- which in this case will be horrific monetary inflation -- roaring back over the mud flats toward the land mass, crashing over the beach, and ripping apart all the hotels and houses and infrastructure there while it drowns the poor curious humans who were too enthralled by the weird spectacle to make for higher ground. The killer tidal wave washes away all the things they have labored to build for decades, all their poignant little effects and chattels, and the survivors are left keening amidst the wreckage as the sea once again returns to normal in its eternal cradle.
So, that's what I think we will get: an interval of deflationary depression followed by a destructive wave of inflation that will wipe out both constructed debt and constructed savings, scraping the financial landscape clean. There's no question that stage one is underway. But we can be sure the giant wave of money recklessly loaned into existence in just a few weeks time will wash back through the global economy leaving a swath of destruction.
And then what? The societies of the world will be faced with the task of rebuilding systems of fruitful activity, i.e., real economies based on productive behavior rather than the smoke-and-mirrors of Frankenstein-finance con games. In fact, excuse me while I switch metaphors again, because the Frankenstein story -- the New Prometheus -- is yet another apt narrative to inform us what we have done.
We have "played" with financial fire and brought to life a monster now bent on killing us. One question that this metaphor-narrative raises is: when will the angry peasant mob storm the castle with their flaming brands and cries for blood from the makers of this monster? Rather soon, I think.
Perhaps, in some countries (maybe the USA, if we're lucky), this will take the more orderly form of systematic prosecutions, bringing to justice persons who perpetrated swindles involving the alphabet soup of investment "products" that have gone bad in so many accounts (and ruined so many individuals, institutions, and governments). I think it has already begun with the inquisitors summoning the shifty Dick Fuld of Lehman Brothers -- but there are hundreds of other characters like him out there, who scored untold millions of dollars in activities that were simply grand swindles. I wouldn't be surprised if, eventually, Treasury Secretary Hank Paulson found himself in the dock to answer how come, when he ran Goldman Sachs, there was a special unit in the company dedicated to short-selling the very mortgage-backed securities that another unit in the company was so busy pawning off to every pension fund on God's green earth.
Apart from orderly prosecutions (which can certainly turn harsh and cruel), there is the possibility of sociopolitical upheaval -- revolution, violence, civil war, war between nations, the whole menu of human mischief that afflicts mankind. We are not necessarily immune to it here in the USA, despite our cherished notion of exceptionalism, which would have us inoculated against all the common vicissitudes of history.
Anyway, prosecution through the courts, while perhaps satisfying the hunger for justice (or, more particularly, revenge), is not a productive economic activity. So, the question begs itself again: what will we do? Under the best circumstances we will reorganize our society and economy at a lower level of energy use (and probably a lower scale of governance, too). The catch is, it will have to be a whole lot lower. I think we'll be very lucky fifty years from now to have a few hours a day of electricity to do things with.
The energy story and its hand-maiden, the climate change situation, are both lurking out there beyond the immediate spectacle of the financial fiasco. Both these things imply pretty strongly that the economic relations currently unraveling will not be rebuilt -- not the way they were before, or even close to it. The best outcome will be societies that can practice small-scale "process-intensive" organic agriculture and equally small-scale process-intensive modes of manufacture in the context of very local sociopolitical networks. An accompanying hope is that we can remain civilized in the process. Personally, while I recognize the appeal (to others, not me) of the "singularity" narrative, which has the human race making a sudden evolutionary leap into some kind of cyborg-nirvana, I regard it as an utter fantasy that has zero chance of occurring, given our stark predicament.
But returning to the short term, or "the present," shall we say, there is the matter of how the US gets through the election and then the first months of a new government, even while the larger fiasco continues. I'm voting for Mr. Obama. While I believe he will make a much better president than the addled old mad dog Mr. McCain has become, I feel sorry for anyone who is placed nominally "in charge" of things this coming year.
The best a President Obama can do is offer some reassurance to a public that is totally unprepared for the convulsion now upon us. Mr. Obama will certainly not have "money" to "spend" on any of the promised social support programs that have been endlessly debated. But he could clearly articulate the reality we're facing, and ask not necessarily for "sacrifice," as the common plea goes, but for something more and better: for bravery and resolute spirit, for intelligence and resilience, for kindness and generosity -- among a people long unused to consorting with the better angels of their nature. He's already begun to set the example by appearing in public with his sleeves rolled up. The change that has been in the air all year -- that Mr. Obama has talked so much about -- is coming in a bigger dose than anyone expected. I hope we're ready to get with the program."
Goldman Sachs Recommends "Sell" on Citigroup...WTF
What the he** is a supposedly newly transformed commercial bank doing recommending a 'sell' on another commercial bank? Nobody needs Goldman's advise on a competitor commercial bank, there are plenty of other analysts out there without conflict of interest. Where the he** has reserved, good judgement gone in these markets?
"Goldman Sachs Recommends "Sell" on Citigroup"
By Reuters 21 Oct 2008
"Goldman Sachs reinstated Citigroup with a "sell" rating and recommended a "paired" trade in which investors sell Citigroup short, betting on a decline, and buy Morgan Stanley shares.
Shares of Citigroup, the giant U.S. bank, fell 4 percent to $14.45 in trading before the bell.
"We believe weak economic data will keep the stock under pressure over the next six months and it is tough to see why the stock would head higher over this period," analyst William Tanona said in a note to clients.
Adding Citigroup to Americas Conviction Sell list, Tanona said it will be difficult for the company to generate profitability over the next 12 months primarily due to additional write-downs and deteriorating credit market.
On Morgan Stanley, the analyst said the company has very limited exposure to consumer credit, which is an area the brokerage believes will provide the most significant headwinds for Citigroup in 2009.
Morgan Stanley will generate profits over the next four quarters, thus adding to its capital base, whereas Citigroup will lose money, thus reducing its capital base, Tanona added."
Aloha, Brad
"Goldman Sachs Recommends "Sell" on Citigroup"
By Reuters 21 Oct 2008
"Goldman Sachs reinstated Citigroup with a "sell" rating and recommended a "paired" trade in which investors sell Citigroup short, betting on a decline, and buy Morgan Stanley shares.
Shares of Citigroup, the giant U.S. bank, fell 4 percent to $14.45 in trading before the bell.
"We believe weak economic data will keep the stock under pressure over the next six months and it is tough to see why the stock would head higher over this period," analyst William Tanona said in a note to clients.
Adding Citigroup to Americas Conviction Sell list, Tanona said it will be difficult for the company to generate profitability over the next 12 months primarily due to additional write-downs and deteriorating credit market.
On Morgan Stanley, the analyst said the company has very limited exposure to consumer credit, which is an area the brokerage believes will provide the most significant headwinds for Citigroup in 2009.
Morgan Stanley will generate profits over the next four quarters, thus adding to its capital base, whereas Citigroup will lose money, thus reducing its capital base, Tanona added."
Aloha, Brad
Hawaii (HEC) Outlines Renewable Energy Goals
"Hawaii outlines renewable energy goals"
By MARK NIESSE Oct. 21, 2008
HONOLULU – "Hawaii's largest utility has signed on to a plan to move the state away from dependence on fossil fuels for electricity and ground transportation.
The goal is to create 70 percent of Hawaii's energy use from clean energy sources by 2030. Currently, the state gets about 10 percent of its energy from renewable sources.
Under the latest agreement, Hawaiian Electric Co. commits to not build any new coal plants, integrate up to 1,100 megawatts of renewable energy into the power grid and convert existing fossil fuel generators to biofuels using locally grown crops.
'We don't have years and years anymore to make these changes,' Gov. Linda Lingle said Monday. 'These are not hopes or dreams or wishes, these are our specific plans that we hope to achieve.'
The transition from fossil fuels to renewable energy is a major step for Hawaiian Electric, said Connie Lau, chairwoman of the board of directors for the utility, which powers Oahu, Maui and the Big Island.
'This is a historic moment for all of us, and it really does take us far beyond what our companies have done historically,' Lau said.
But some of the biggest ideas in the overall deal — including expensive undersea power cables to move wind-generated energy between the islands — lack funding or even cost estimates for how they'll become reality.
The undersea cables, which could cost hundreds of millions of dollars, would link potential wind farms on Lanai or Molokai to population centers on Maui and Oahu.
It's unclear exactly where the money will come from. Private companies could step in, the state may pursue revenue bonds, or Sen. Daniel Inouye, D-Hawaii, could seek federal funds.
Inouye said it's essential that Hawaii emphasize its energy independence efforts because of the state's isolation and the steady long-term rise of oil prices.
'It's not going to be easy, but we must do it, because of all the 50 states in the union, our state is the most vulnerable,' Inouye said. 'We have no fossil fuels, so we have to manufacture our own energy.'
Additional parts of the plan call for creating incentives to encourage adoption of electric vehicles and making it easier for customers to get credits for electricity contributed to the power grid from home solar or wind systems.
The agreement stems from the Hawaii Clean Energy Initiative, a partnership between the state and the federal Department of Energy launched in January with the goal of making Hawaii a model for how the United States can become energy independent."
By MARK NIESSE Oct. 21, 2008
HONOLULU – "Hawaii's largest utility has signed on to a plan to move the state away from dependence on fossil fuels for electricity and ground transportation.
The goal is to create 70 percent of Hawaii's energy use from clean energy sources by 2030. Currently, the state gets about 10 percent of its energy from renewable sources.
Under the latest agreement, Hawaiian Electric Co. commits to not build any new coal plants, integrate up to 1,100 megawatts of renewable energy into the power grid and convert existing fossil fuel generators to biofuels using locally grown crops.
'We don't have years and years anymore to make these changes,' Gov. Linda Lingle said Monday. 'These are not hopes or dreams or wishes, these are our specific plans that we hope to achieve.'
The transition from fossil fuels to renewable energy is a major step for Hawaiian Electric, said Connie Lau, chairwoman of the board of directors for the utility, which powers Oahu, Maui and the Big Island.
'This is a historic moment for all of us, and it really does take us far beyond what our companies have done historically,' Lau said.
But some of the biggest ideas in the overall deal — including expensive undersea power cables to move wind-generated energy between the islands — lack funding or even cost estimates for how they'll become reality.
The undersea cables, which could cost hundreds of millions of dollars, would link potential wind farms on Lanai or Molokai to population centers on Maui and Oahu.
It's unclear exactly where the money will come from. Private companies could step in, the state may pursue revenue bonds, or Sen. Daniel Inouye, D-Hawaii, could seek federal funds.
Inouye said it's essential that Hawaii emphasize its energy independence efforts because of the state's isolation and the steady long-term rise of oil prices.
'It's not going to be easy, but we must do it, because of all the 50 states in the union, our state is the most vulnerable,' Inouye said. 'We have no fossil fuels, so we have to manufacture our own energy.'
Additional parts of the plan call for creating incentives to encourage adoption of electric vehicles and making it easier for customers to get credits for electricity contributed to the power grid from home solar or wind systems.
The agreement stems from the Hawaii Clean Energy Initiative, a partnership between the state and the federal Department of Energy launched in January with the goal of making Hawaii a model for how the United States can become energy independent."
Video: "Then There Were None" by Dr. Elizabeth Kapu‘uwailani Lindsey
I bought and watched this whole DVD recently. It is outstanding. Here is a trailer for it:
The DVD is distributed by Pacific Islanders in Communications (PIC). The narrator/director of "Then There Were None" is Dr. Elizabeth Kapu'uwailani Lindsey. She has a long list of credits in the film industry. Here is a good bio of her and the film. Here is a good place to buy "Then There Were None" online. It is one of the best videos I have ever seen.
Aloha, Brad
The DVD is distributed by Pacific Islanders in Communications (PIC). The narrator/director of "Then There Were None" is Dr. Elizabeth Kapu'uwailani Lindsey. She has a long list of credits in the film industry. Here is a good bio of her and the film. Here is a good place to buy "Then There Were None" online. It is one of the best videos I have ever seen.
Aloha, Brad
Video: Inside USA - The Other Hawaii
Very interesting report from a surprising news source:
I'm also looking to post some information about Elizabeth Lindsey and the video "Then There Were None."
Aloha, Brad
I'm also looking to post some information about Elizabeth Lindsey and the video "Then There Were None."
Aloha, Brad
Kauai Ballot Charter Amendments Reviewed
http://www.kauaiworld.com/articles/2008/10/18/opinion/kauai/doc48f9a3e8ee793829352018.txt
"Voting on measures needs close attention"
By Walter Lewis October 18, 2008
Six proposals to amend the Kauai County Charter will be on the ballot at the General Election to be held on Nov. 4.
Three of the measures being presented are proposed by the Charter Commission, two of the measures are proposed by the County Council and one measure is proposed through a citizens petition. It is the first time there have been proposals from all three potential sources.
In the case of the measures offered by the Charter Commission, one of them arose from the suggestion of a member of the public calling for a clarification of the process for election of the mayor and the county prosecutor and two of them arose from motions by a commission member. The commission member measures would relax requirements for county commission members serving private interests and restrictions on closed meetings of the County Council. It is noteworthy that at no time before the introduction of the measures offered by the commission member did any public testimony suggesting the need for the amendments he proposed occur and all public testimony after the introduction strongly opposed them. The commission simply ignored the voice of the public. The commission chose not to present for voter approval several other proposals that had been considered at commission meetings. Although it was the subject of more discussion than any other measure the commission failed to move forward a proposal by Commissioner Walter Briant seeking a citizen vote on the matter of changing to a county manager form of government. Substantial testimony and documentation on the subject were offered by citizen supporters of the manager system. Although there was minimal opposition to the concept in public testimony, the majority of the commission claimed they did not know enough about the measure to offer it for this year’s election. It remains to be seen if those commissioners will make any effort to become better educated about it and allow it to be presented in a future election. With the one proposal exception noted, the commission basically disregarded the input it received from the public.
While the 2006 Charter Commission offered 15 measures for voter approval, the output for the current commission was meager. The serving commission did not hold outreach meetings with the public as did the earlier commission, but it managed to issue an information paper concerning its three proposals. It is inaccurate in certain respects. Concerning the proposal for representation of private interests by commission members it is stated that Section 20.02D of the Charter is being currently interpreted to permit such representation. The only county agency involved is the Ethics Board and in neither of its most recent rulings on such representations is Section 20.02 D mentioned. No one in the public knows how the board may be construing Section 20.02D. Concerning the proposal relating to executive sessions by the County Council it is stated that Section 3.07E of the County Charter is not consistent with the State Sunshine Law. This is not the case. Section 92-71 of the Sunshine law provides that if a county has enacted a provision that is more stringent about mandating the openness of meetings than provisions in the Sunshine law then the county provision applies. The integration of the 3.07E provision with the Sunshine law is clear. The ballot question chosen by the commission is a deceptive trap for the unwary. It asks the voters whether the charter should be amended so that it conforms with the Sunshine law when, by its terms, the charter now provides greater openness than the Sunshine law. If you believe in open government vote “No.”
The proposal arising from the citizens petitions involves a shameful story of political manipulation. The citizen’s committee sponsoring the measure submitted as the ballot question to be presented to the voters the following accurate summary: “Shall the County Charter be amended to require that the County Council be responsible to ensure that the issuance of permits for hotels, timeshare and other tourist accommodations is limited to a number that is consistent with the planning growth range of the County’s General Plan?” The text of the measure is considerably longer than the quoted ballot question. The ballot question submitted was, over protest, rejected by the county clerk without explanation. In all proposed amendments in 2006 and all the other measures being presented with the citizens petition proposal, the ballot question used was a condensation or summary of the full text. It appears that our county officials wish to discriminate against the measure by offering a lengthy question almost certainly in the hope that voters might be confused and vote against the measure for that reason.
The two proposals offered by the County Council to require disclosure of conflicts and to establish an office for an auditor to review county operations, although inadequately described by the ballot questions, seem to offer reasonable reforms. The obvious question, however, is why the council chose to use its authority to submit proposed amendments. It had never done so before this election while there was a Charter Commission then serving. In one earlier instance when Salary Commission members believed a charter amendment relating to their function should be placed on the ballot, the council chair advised that their request should be given to the Charter Commission to which the council, at that time, deferred.
In a bizarre, unprecedented and scandalous move the county clerk has determined that the proposals should not be numbered or lettered. This, of course, inhibits identification of the proposals.
I do not have any firm recommendations as to the proposals relating to county elections, relating to disclosure of interests, and relating to the office of a county auditor. I would, though, strongly urge a “No” vote on the proposal relating to County Council executive sessions and the proposal relating to boards and commissions for the reasons I have mentioned above. I would also recommend a favorable vote on the proposal relating to the General Plan so that elected county officials would have a responsibility for visitor accommodations being limited to the level expressed in the General Plan.
• Walter Lewis writes a bi-weekly column for The Garden Island.
Vote ‘Yes’ on General Plan Charter Amendment
http://www.kauaiworld.com/articles/2008/10/19/opinion/letters_to_the_editor/doc48faab0f83097007719562.txt
"Vote ‘yes’ on General Plan" October 19, 2008
Please vote “Yes” on the big one to keep Kaua‘i the Garden Island.
Way down in the lower right corner of the ballot, right at the end, is where you must vote “Yes” for our beaches, “Yes” for our ‘aina, and “Yes” for a county government that follows the General Plan. The county made the only citizen-initiated amendment long and confusing to make it harder to pass.
It has been years since we insisted that our government behave. The last citizen initiated amendment to the Charter passed by more than 60 percent. It takes a lot to get people mad enough to collect 3,000 petition signatures.
Now we can vote for a better Kaua‘i. I didn’t collect signatures, but I will vote “Yes” on the big one. You should too. Or move to Waikiki or Miami or Maui or anyplace where foreign investors have “developed” what was beautiful. Keep Kaua‘i the Garden Island. Please urge everyone to vote “Yes” on the big one.
Steve Perry, Lihu‘e
"Voting on measures needs close attention"
By Walter Lewis October 18, 2008
Six proposals to amend the Kauai County Charter will be on the ballot at the General Election to be held on Nov. 4.
Three of the measures being presented are proposed by the Charter Commission, two of the measures are proposed by the County Council and one measure is proposed through a citizens petition. It is the first time there have been proposals from all three potential sources.
In the case of the measures offered by the Charter Commission, one of them arose from the suggestion of a member of the public calling for a clarification of the process for election of the mayor and the county prosecutor and two of them arose from motions by a commission member. The commission member measures would relax requirements for county commission members serving private interests and restrictions on closed meetings of the County Council. It is noteworthy that at no time before the introduction of the measures offered by the commission member did any public testimony suggesting the need for the amendments he proposed occur and all public testimony after the introduction strongly opposed them. The commission simply ignored the voice of the public. The commission chose not to present for voter approval several other proposals that had been considered at commission meetings. Although it was the subject of more discussion than any other measure the commission failed to move forward a proposal by Commissioner Walter Briant seeking a citizen vote on the matter of changing to a county manager form of government. Substantial testimony and documentation on the subject were offered by citizen supporters of the manager system. Although there was minimal opposition to the concept in public testimony, the majority of the commission claimed they did not know enough about the measure to offer it for this year’s election. It remains to be seen if those commissioners will make any effort to become better educated about it and allow it to be presented in a future election. With the one proposal exception noted, the commission basically disregarded the input it received from the public.
While the 2006 Charter Commission offered 15 measures for voter approval, the output for the current commission was meager. The serving commission did not hold outreach meetings with the public as did the earlier commission, but it managed to issue an information paper concerning its three proposals. It is inaccurate in certain respects. Concerning the proposal for representation of private interests by commission members it is stated that Section 20.02D of the Charter is being currently interpreted to permit such representation. The only county agency involved is the Ethics Board and in neither of its most recent rulings on such representations is Section 20.02 D mentioned. No one in the public knows how the board may be construing Section 20.02D. Concerning the proposal relating to executive sessions by the County Council it is stated that Section 3.07E of the County Charter is not consistent with the State Sunshine Law. This is not the case. Section 92-71 of the Sunshine law provides that if a county has enacted a provision that is more stringent about mandating the openness of meetings than provisions in the Sunshine law then the county provision applies. The integration of the 3.07E provision with the Sunshine law is clear. The ballot question chosen by the commission is a deceptive trap for the unwary. It asks the voters whether the charter should be amended so that it conforms with the Sunshine law when, by its terms, the charter now provides greater openness than the Sunshine law. If you believe in open government vote “No.”
The proposal arising from the citizens petitions involves a shameful story of political manipulation. The citizen’s committee sponsoring the measure submitted as the ballot question to be presented to the voters the following accurate summary: “Shall the County Charter be amended to require that the County Council be responsible to ensure that the issuance of permits for hotels, timeshare and other tourist accommodations is limited to a number that is consistent with the planning growth range of the County’s General Plan?” The text of the measure is considerably longer than the quoted ballot question. The ballot question submitted was, over protest, rejected by the county clerk without explanation. In all proposed amendments in 2006 and all the other measures being presented with the citizens petition proposal, the ballot question used was a condensation or summary of the full text. It appears that our county officials wish to discriminate against the measure by offering a lengthy question almost certainly in the hope that voters might be confused and vote against the measure for that reason.
The two proposals offered by the County Council to require disclosure of conflicts and to establish an office for an auditor to review county operations, although inadequately described by the ballot questions, seem to offer reasonable reforms. The obvious question, however, is why the council chose to use its authority to submit proposed amendments. It had never done so before this election while there was a Charter Commission then serving. In one earlier instance when Salary Commission members believed a charter amendment relating to their function should be placed on the ballot, the council chair advised that their request should be given to the Charter Commission to which the council, at that time, deferred.
In a bizarre, unprecedented and scandalous move the county clerk has determined that the proposals should not be numbered or lettered. This, of course, inhibits identification of the proposals.
I do not have any firm recommendations as to the proposals relating to county elections, relating to disclosure of interests, and relating to the office of a county auditor. I would, though, strongly urge a “No” vote on the proposal relating to County Council executive sessions and the proposal relating to boards and commissions for the reasons I have mentioned above. I would also recommend a favorable vote on the proposal relating to the General Plan so that elected county officials would have a responsibility for visitor accommodations being limited to the level expressed in the General Plan.
• Walter Lewis writes a bi-weekly column for The Garden Island.
Vote ‘Yes’ on General Plan Charter Amendment
http://www.kauaiworld.com/articles/2008/10/19/opinion/letters_to_the_editor/doc48faab0f83097007719562.txt
"Vote ‘yes’ on General Plan" October 19, 2008
Please vote “Yes” on the big one to keep Kaua‘i the Garden Island.
Way down in the lower right corner of the ballot, right at the end, is where you must vote “Yes” for our beaches, “Yes” for our ‘aina, and “Yes” for a county government that follows the General Plan. The county made the only citizen-initiated amendment long and confusing to make it harder to pass.
It has been years since we insisted that our government behave. The last citizen initiated amendment to the Charter passed by more than 60 percent. It takes a lot to get people mad enough to collect 3,000 petition signatures.
Now we can vote for a better Kaua‘i. I didn’t collect signatures, but I will vote “Yes” on the big one. You should too. Or move to Waikiki or Miami or Maui or anyplace where foreign investors have “developed” what was beautiful. Keep Kaua‘i the Garden Island. Please urge everyone to vote “Yes” on the big one.
Steve Perry, Lihu‘e
Monday, October 20, 2008
Serious Problems and the Kauai Race for Mayor
http://www.kauaiworld.com/articles/2008/10/17/opinion/letters_to_the_editor/doc48f857617d17b021634999.txt
"Serious problems and the race for mayor"
I remember sitting in a high school class in the 1960’s listening with rest of the school as the Cuban missile crisis unfolded. Soviet ships were approaching Cuba loaded with missiles and John Kennedy announced that we would use military might if necessary to turn those ships around. The U.S. and Russia had hundreds of armed missiles pointed at each other.
We sat there listening as the ships approached each other, wondering if we were about to witness the beginning of World War III. It was with great relief that the announcement came that the Russian ship had turned back and that this was not the beginning of a nuclear holocaust. It was like waking from a nightmare, the world was suddenly okay again and we went on with our lives.
Unfortunately, the crisis facing the world today is not going to go away so easily. The infrastructure based on cheap oil and easy credit is very damaged. Even as oil briefly becomes cheaper, the message is clear, there is not enough oil to meet the world’s growing needs for energy. Global warming is injuring the planet and buying foreign oil is destroying our local and national economies. It is increasingly accepted that as rapidly as possible we need to provide energy from the sun, wind, waves and alternative fuels and that we will have to start growing large amounts of food in our local communities.
We must accept that business as usual is really over. I believe that it is vital to pick a mayor who has shown a long-standing interest in and is extremely knowledgeable about alternative energy sources as well as about growing food locally. Most importantly, we need a leader who is passionate about these issues.
There is no doubt in my mind that JoAnn Yukimura will give us our best chance to make the changes that must be made as quickly as possible. All other issues pale in the face of these serious global problems. Bernard Carvalho is a well-respected community leader and when this crisis passes he may well become a very good mayor. Today though, we need what JoAnn has to offer.
Lee Evslin, Kapa‘a
"Serious problems and the race for mayor"
I remember sitting in a high school class in the 1960’s listening with rest of the school as the Cuban missile crisis unfolded. Soviet ships were approaching Cuba loaded with missiles and John Kennedy announced that we would use military might if necessary to turn those ships around. The U.S. and Russia had hundreds of armed missiles pointed at each other.
We sat there listening as the ships approached each other, wondering if we were about to witness the beginning of World War III. It was with great relief that the announcement came that the Russian ship had turned back and that this was not the beginning of a nuclear holocaust. It was like waking from a nightmare, the world was suddenly okay again and we went on with our lives.
Unfortunately, the crisis facing the world today is not going to go away so easily. The infrastructure based on cheap oil and easy credit is very damaged. Even as oil briefly becomes cheaper, the message is clear, there is not enough oil to meet the world’s growing needs for energy. Global warming is injuring the planet and buying foreign oil is destroying our local and national economies. It is increasingly accepted that as rapidly as possible we need to provide energy from the sun, wind, waves and alternative fuels and that we will have to start growing large amounts of food in our local communities.
We must accept that business as usual is really over. I believe that it is vital to pick a mayor who has shown a long-standing interest in and is extremely knowledgeable about alternative energy sources as well as about growing food locally. Most importantly, we need a leader who is passionate about these issues.
There is no doubt in my mind that JoAnn Yukimura will give us our best chance to make the changes that must be made as quickly as possible. All other issues pale in the face of these serious global problems. Bernard Carvalho is a well-respected community leader and when this crisis passes he may well become a very good mayor. Today though, we need what JoAnn has to offer.
Lee Evslin, Kapa‘a
Isles Score Low in Renewable Study
From: http://www.honoluluadvertiser.com/article/20081015/BUSINESS21/810150352/1071/BUSINESS
"Isles score low in renewable study"
Advertiser Staff October 15, 2008
"Hawai'i has failed in some parts of its renewable energy policy while being just average in others, according to a report issued yesterday by a New York-based environmental group.
The report by the Network for New Energy Choices gave the state a failing grade when it came to the technical rules governing how home and small renewable energy projects connect with electrical transmission grids.
It also said the state merits a "C" grade when it comes to net metering, or the billing arrangement customers use to realize savings when they feed energy into utility grids.
The two policies are not widely understood by the general public, but are seen as being crucial to the development of renewable energy such as photovoltaic systems in use by homeowners and businesses. Such policies can cap growth of renewable energy if they restrict how much electricity can be sent into utility grids, or the size of the systems attaching to the grids.
While the authors tried to objectively grade policies in each state, they appeared to not understand the nature of Hawai'i's energy market, said Peter Rosegg, a Hawaiian Electric Co. spokesman. He said Hawai'i shouldn't be held to the same standards used to judge states with large Mainland grids that can draw power from other states.
"They haven't looked at our situation very closely," Rosegg said. Standards are "going to be different for small island grids."
In the group's report, "Freeing the Grid," Hawai'i was recommended to increase the percentage of net energy metering electricity to at least 5 percent of a utility's peak demand. Currently, the state Public Utilities Commission has set a 1 percent cap, though Hawaiian Electric has filed with the PUC to increase that level to 3 percent on Maui and the Big Island.
Rosegg said the report authors didn't take into consideration that Hawai'i's systems are self-contained to each island and could be destabilized if a larger percentage of its energy is drawn from renewables. If renewable resources become unavailable during certain periods, it may result in problems for power users as the utility strains to meet capacity, Rosegg said.
On the Mainland, such problems could be resolved by bringing in more power from generating units in other states, he said. Hawaiian Electric thinks the capacity can be increased but wants to do it in increments to see its effect on the system.
The group also cited Hawai'i in its "worst practices" section for not having interconnection standards above 100 kilowatts. Rosegg said the PUC and Hawaiian Electric are also moving in this direction with a test project looking at interconnection for systems up to 500 kilowatts. The report recommended increasing the interconnection limit to systems up to 2 megawatts."
"Isles score low in renewable study"
Advertiser Staff October 15, 2008
"Hawai'i has failed in some parts of its renewable energy policy while being just average in others, according to a report issued yesterday by a New York-based environmental group.
The report by the Network for New Energy Choices gave the state a failing grade when it came to the technical rules governing how home and small renewable energy projects connect with electrical transmission grids.
It also said the state merits a "C" grade when it comes to net metering, or the billing arrangement customers use to realize savings when they feed energy into utility grids.
The two policies are not widely understood by the general public, but are seen as being crucial to the development of renewable energy such as photovoltaic systems in use by homeowners and businesses. Such policies can cap growth of renewable energy if they restrict how much electricity can be sent into utility grids, or the size of the systems attaching to the grids.
While the authors tried to objectively grade policies in each state, they appeared to not understand the nature of Hawai'i's energy market, said Peter Rosegg, a Hawaiian Electric Co. spokesman. He said Hawai'i shouldn't be held to the same standards used to judge states with large Mainland grids that can draw power from other states.
"They haven't looked at our situation very closely," Rosegg said. Standards are "going to be different for small island grids."
In the group's report, "Freeing the Grid," Hawai'i was recommended to increase the percentage of net energy metering electricity to at least 5 percent of a utility's peak demand. Currently, the state Public Utilities Commission has set a 1 percent cap, though Hawaiian Electric has filed with the PUC to increase that level to 3 percent on Maui and the Big Island.
Rosegg said the report authors didn't take into consideration that Hawai'i's systems are self-contained to each island and could be destabilized if a larger percentage of its energy is drawn from renewables. If renewable resources become unavailable during certain periods, it may result in problems for power users as the utility strains to meet capacity, Rosegg said.
On the Mainland, such problems could be resolved by bringing in more power from generating units in other states, he said. Hawaiian Electric thinks the capacity can be increased but wants to do it in increments to see its effect on the system.
The group also cited Hawai'i in its "worst practices" section for not having interconnection standards above 100 kilowatts. Rosegg said the PUC and Hawaiian Electric are also moving in this direction with a test project looking at interconnection for systems up to 500 kilowatts. The report recommended increasing the interconnection limit to systems up to 2 megawatts."
Kauai Mayoral Hopefuls...and Shifting Alliances?
LOVING KAUA'I
"'For the past 30 years, JoAnn has been a very dedicated public servant. She's done a lot for Kaua'i," said supporter Gerald Hirata, who has known Yukimura since high school.
"Today Kaua'i is in the balance. There are many issues we face that will determine what this island will be like in two, five, or 10 years," said Hirata. "I think we need visionary leadership for land and tax reforms, housing and growth issues, solid waste management, and how we build a community and how we work together...'"
What Carvalho proposes below will cost department heads more money than most of them have contributed to his campaign in time and money so far, even the ones who have maxed-out the $4,000 contribution to Carvalho's campaign, and there have been a few of them.
"Carvalho said if elected, he will cancel planned mayoral and department head raises scheduled for July 2009, an estimated savings of $300,000. Carvalho also said he would restrict interisland and Mainland travel, examine county take-home vehicle and cell-phone use and require energy use reductions of each department."
On the other hand, JoAnn takes the position that:
"'For the department heads that are doing excellent work, we should grant them the raises, because they are worth their weight in gold and will save the county a lot more money than their raises by managing their departments well,' Yukimura said."
From: http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=2008810200318
"Kauai mayoral hopefuls fight on;
Carvalho or Yukimura could get a big boost from Rapozo supporters"
By Diana Leone Advertiser Kaua'i Bureau October 20, 2008
LIHU'E, Kaua'i — As the home stretch to the Nov. 4 elections approaches, mayoral candidates Bernard Carvalho and JoAnn Yukimura continue to court Kaua'i voters...
"Talk is easy," Yukimura says, commenting that Carvalho is "starting to sound a lot like me" in some of his environmentally friendly proposals. "Effective action is not as easy."
"People want problems to be solved," Yukimura said. "Whether it's recycling or shoreline protection, they want goals to be achieved."
...Kaua'i County's operating budget is $157.9 million. The county government has 1,169 employees...
IT'S THE ECONOMY
Kaua'i's small-town plantation lifestyle where "everybody knew everybody" has morphed into a mixed community of kama'aina of all economic levels and newcomers who tend to be well off.
In recent years, with a building boom in upscale homes and resort properties, Kaua'i real estate values have risen, pumping money into the county's economy.
The growth has stretched the resources of working people to meet basic food and shelter needs, and has stretched the ability of county infrastructure to keep up with development.
And that was before the national and local economies slowed down, oil prices rose and the Wall Street lending crisis loomed...
Asked for a response to Carvalho's cost-cutting proposals, Yukimura told The Advertiser: "They all seem pretty small compared to the $9 million to $50 million that could have been saved if we had implemented the 'reduce, re-use, recycle' solid-waste plan that my administration proposed, and the County Council approved, back in 1994. We could have also saved a lot more money by siting a new landfill earlier."
"For the department heads that are doing excellent work, we should grant them the raises, because they are worth their weight in gold and will save the county a lot more money than their raises by managing their departments well," Yukimura said.
LOVING KAUA'I
"For the past 30 years, JoAnn has been a very dedicated public servant. She's done a lot for Kaua'i," said supporter Gerald Hirata, who has known Yukimura since high school.
"Today Kaua'i is in the balance. There are many issues we face that will determine what this island will be like in two, five, or 10 years," said Hirata. "I think we need visionary leadership for land and tax reforms, housing and growth issues, solid waste management, and how we build a community and how we work together..."
Aloha, Brad
"'For the past 30 years, JoAnn has been a very dedicated public servant. She's done a lot for Kaua'i," said supporter Gerald Hirata, who has known Yukimura since high school.
"Today Kaua'i is in the balance. There are many issues we face that will determine what this island will be like in two, five, or 10 years," said Hirata. "I think we need visionary leadership for land and tax reforms, housing and growth issues, solid waste management, and how we build a community and how we work together...'"
What Carvalho proposes below will cost department heads more money than most of them have contributed to his campaign in time and money so far, even the ones who have maxed-out the $4,000 contribution to Carvalho's campaign, and there have been a few of them.
"Carvalho said if elected, he will cancel planned mayoral and department head raises scheduled for July 2009, an estimated savings of $300,000. Carvalho also said he would restrict interisland and Mainland travel, examine county take-home vehicle and cell-phone use and require energy use reductions of each department."
On the other hand, JoAnn takes the position that:
"'For the department heads that are doing excellent work, we should grant them the raises, because they are worth their weight in gold and will save the county a lot more money than their raises by managing their departments well,' Yukimura said."
From: http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=2008810200318
"Kauai mayoral hopefuls fight on;
Carvalho or Yukimura could get a big boost from Rapozo supporters"
By Diana Leone Advertiser Kaua'i Bureau October 20, 2008
LIHU'E, Kaua'i — As the home stretch to the Nov. 4 elections approaches, mayoral candidates Bernard Carvalho and JoAnn Yukimura continue to court Kaua'i voters...
"Talk is easy," Yukimura says, commenting that Carvalho is "starting to sound a lot like me" in some of his environmentally friendly proposals. "Effective action is not as easy."
"People want problems to be solved," Yukimura said. "Whether it's recycling or shoreline protection, they want goals to be achieved."
...Kaua'i County's operating budget is $157.9 million. The county government has 1,169 employees...
IT'S THE ECONOMY
Kaua'i's small-town plantation lifestyle where "everybody knew everybody" has morphed into a mixed community of kama'aina of all economic levels and newcomers who tend to be well off.
In recent years, with a building boom in upscale homes and resort properties, Kaua'i real estate values have risen, pumping money into the county's economy.
The growth has stretched the resources of working people to meet basic food and shelter needs, and has stretched the ability of county infrastructure to keep up with development.
And that was before the national and local economies slowed down, oil prices rose and the Wall Street lending crisis loomed...
Asked for a response to Carvalho's cost-cutting proposals, Yukimura told The Advertiser: "They all seem pretty small compared to the $9 million to $50 million that could have been saved if we had implemented the 'reduce, re-use, recycle' solid-waste plan that my administration proposed, and the County Council approved, back in 1994. We could have also saved a lot more money by siting a new landfill earlier."
"For the department heads that are doing excellent work, we should grant them the raises, because they are worth their weight in gold and will save the county a lot more money than their raises by managing their departments well," Yukimura said.
LOVING KAUA'I
"For the past 30 years, JoAnn has been a very dedicated public servant. She's done a lot for Kaua'i," said supporter Gerald Hirata, who has known Yukimura since high school.
"Today Kaua'i is in the balance. There are many issues we face that will determine what this island will be like in two, five, or 10 years," said Hirata. "I think we need visionary leadership for land and tax reforms, housing and growth issues, solid waste management, and how we build a community and how we work together..."
Aloha, Brad
Looking for Good Information on Commodity Deflation
Editor's Note -- An ABC Video has since come out on Oct. 20, 2008 on related matters: http://cosmos.bcst.yahoo.com/up/player/popup/index.php?cl=10291122
With my prior post about the price of oil falling 50% in 3 months, as that directly relates to fuel and electricity prices here on Kauai, I'm now looking for good information on oil and commodity price deflation, if that is really what we are seeing. The following is a fairly good video from August 2008 followed by an article from the site that the video mentions. I would still like to find some more complete and timely information than even this, but it's a start, esp. the two charts below on oil:
http://www.elliottwave.com/freeupdates/archives/2008/10/16/Crude-Oil-Gentlemen,-Stop-Your-Engines.aspx?code=cg
"(Update) Crude Oil: Gentlemen, Stop Your Engines" --
$200 oil: How could have oil experts gotten it so wrong?
By Vadim Pokhlebkin Thu, 16 Oct 2008
"Three months ago, you couldn't swing a baseball bat in a crowd without hitting someone screaming that the world was running out of oil.
But after reaching a record high of $147 a barrel in July, oil fell as low as $68.57 (on October 16 -- Ed.) – a 50% decline. Before oil slipped below $70, "Goldman Sachs, among those predicting $200 a barrel oil, cut its year-end forecast of oil to $70…" (AP)
How could have "those predicting $200 a barrel oil" gotten it so wrong?
"To be fair, there is always a tendency in parts of the analyst community to look at short-turn trends and assume it’s something that will continue in perpetuity,” commented on the situation an analyst with the International Energy Agency.
Exactly. Isn't projecting short-term trends into infinity the definition of every financial bubble?
Bubbles are a function of our collective perception of reality – or market sentiment. "The prevailing sentiment," continues the AP article, "was that prices would continue to rise…" Three months ago, that sentiment made oil investors interpret just about every energy-related news story as bullish – and, ultimately, suckered them into a commodity bubble...
With my prior post about the price of oil falling 50% in 3 months, as that directly relates to fuel and electricity prices here on Kauai, I'm now looking for good information on oil and commodity price deflation, if that is really what we are seeing. The following is a fairly good video from August 2008 followed by an article from the site that the video mentions. I would still like to find some more complete and timely information than even this, but it's a start, esp. the two charts below on oil:
http://www.elliottwave.com/freeupdates/archives/2008/10/16/Crude-Oil-Gentlemen,-Stop-Your-Engines.aspx?code=cg
"(Update) Crude Oil: Gentlemen, Stop Your Engines" --
$200 oil: How could have oil experts gotten it so wrong?
By Vadim Pokhlebkin Thu, 16 Oct 2008
"Three months ago, you couldn't swing a baseball bat in a crowd without hitting someone screaming that the world was running out of oil.
But after reaching a record high of $147 a barrel in July, oil fell as low as $68.57 (on October 16 -- Ed.) – a 50% decline. Before oil slipped below $70, "Goldman Sachs, among those predicting $200 a barrel oil, cut its year-end forecast of oil to $70…" (AP)
How could have "those predicting $200 a barrel oil" gotten it so wrong?
"To be fair, there is always a tendency in parts of the analyst community to look at short-turn trends and assume it’s something that will continue in perpetuity,” commented on the situation an analyst with the International Energy Agency.
Exactly. Isn't projecting short-term trends into infinity the definition of every financial bubble?
Bubbles are a function of our collective perception of reality – or market sentiment. "The prevailing sentiment," continues the AP article, "was that prices would continue to rise…" Three months ago, that sentiment made oil investors interpret just about every energy-related news story as bullish – and, ultimately, suckered them into a commodity bubble...
When the head of one of the world’s largest corporations changes his entire product mix because of what he perceives as a “structural change, not just a cyclical change” in the price of gas…odds are high that a countervailing move is in the offing. Oil could conceivably fall by 50%… back into the area of the previous fourth wave, a common support area in terms of Elliott wave analysis.
Later, on August 11, 2008, The Short Term Update wrote:
Oil is down 23% from its July high. [This] chart was published in the June issue of The Elliott Wave Financial Forecast and shows our call for a top. Prices traced out five waves from the December 1998 low and carried to just above the upper line of an unorthodox parallel trend channel. Optimism was at near-record levels and the president of OPEC stated (shortly thereafter) that, “prices won’t come down.” It was a very strong confluence of conditions that indicated a reversal...
Near term, prices have closed lower the past two days, which is interesting in that if there ever was a fundamental “reason” for oil to shoot higher, it is Russia’s invasion of Georgia. I believe that they even shut down a pipeline. When psychology reaches an extreme and the trend turns, all the supposed reasons pundits cited as to why prices were rising matter little. Nearly all were rationalizations to begin with, and the change in psychology exposes their flaws...
Now that oil has dropped 48% from its July peak – into the forecast area of "the previous fourth wave" – we may see market sentiment reach a low extreme."
Aloha, Brad
Sunday, October 19, 2008
New Energy Economy Emerging in the U.S.
"New Energy Economy Emerging in the United States"
by Lester R. Brown Earth Policy Institute October 15, 2008
"As fossil fuel prices rise, as oil insecurity deepens, and as concerns about climate change cast a shadow over the future of coal, a new energy economy is emerging in the United States. The old energy economy, fueled by oil, coal, and natural gas, is being replaced by one powered by wind, solar, and geothermal energy. The transition is moving at a pace and on a scale that we could not have imagined even a year ago.
Consider Texas. Long the leading oil-producing state, it is now also the leading generator of electricity from wind, having overtaken California two years ago. Texas now has nearly 6,000 megawatts of wind-generating capacity online and a staggering 39,000 megawatts in the construction and planning stages. When all this is completed, Texas will have 45,000 megawatts of wind-generating capacity (think 45 coal-fired power plants). This will more than satisfy the residential needs of the state's 24 million people, enabling Texas to feed electricity to nearby states such as Louisiana and Mississippi.
After Texas and California, the other leaders among the 30 states with commercial-scale wind farms are Iowa, Minnesota, Washington, and Colorado. And other states are emerging as wind superpowers. Clipper Windpower and BP are teaming up to build the 5,050-megawatt Titan wind farm, the world's largest, in eastern South Dakota. Already under development, Titan will generate five times as much electricity as the state's 780,000 residents currently use. This project includes building a transmission line along an abandoned rail line across Iowa, feeding electricity into Illinois and the country's industrial heartland.
Colorado billionaire Philip Anschutz is developing a 2,000-megawatt wind farm in south central Wyoming. He already has secured the rights to build a 900-mile high-voltage transmission line to California. With this investment, the door will be opened to developing scores of huge wind farms in Wyoming, a wind-rich state with few people. Another transmission line under development will run north-south, linking eastern Wyoming's wind resources with the fast-growing Colorado cities of Fort Collins, Denver, and Colorado Springs. Wind-rich Kansas and Oklahoma are looking to build a transmission line to the U.S. Southeast to export their wealth of cheap wind energy.
California is developing a 4,500-megawatt wind farm complex in the Tehachapi Mountains northwest of Los Angeles. In the east, Maine-a wind energy newcomer-is planning to develop 3,000 megawatts of wind-generating capacity, far more than the state's 1.3 million residents need. Further south, Delaware is planning an offshore wind farm of up to 600 megawatts, which could satisfy half of the state's residential electricity needs. New York State, which has 700 megawatts of wind-generating capacity, plans to add another 8,000 megawatts, with most of the power being generated by winds coming off Lake Erie and Lake Ontario. And soon Oregon will nearly double its wind generating capacity with a 900-megawatt wind farm in the wind-rich Columbia River Gorge.
Wind appears destined to become the centerpiece of the new U.S. energy economy, eventually supplying several hundred thousand megawatts of electricity.
Solar power is also expanding at a breakneck pace. The nation's wealth of solar energy is being harnessed by using both photovoltaic cells and solar thermal power plants to convert sunlight into electricity. For solar cell installations, California, with its Million Solar Roofs plan, is far and away the leader. New Jersey is also moving fast, followed by Nevada.
The largest U.S. solar cell installation today is a 14-megawatt array at Nellis Air Force Base in Nevada, but photovoltaic electricity at the commercial level is about to go big time. PG&E has entered into two solar cell power contracts with a combined capacity of 800 megawatts. Together, these plants will cover 12 square miles of desert with solar cells and will have a peak output comparable to that of a large coal-fired power plant. Solar power plants are appealing in hot climates because their highest output coincides with the peak demand for air conditioning.
Solar thermal plants that use mirrors to concentrate sunlight on a vessel containing a fluid-heating it to 750 degrees Fahrenheit to generate steam and produce power-have suddenly become an enormously attractive technology. The United States has the world's only large solar thermal complex, a 350-megawatt project completed in 1991. But as of September 2008 there are 10 large solar thermal power plants under construction or in development in the United States, ranging in size from 180 megawatts to 550 megawatts. Eight of the plants will be built in California, one in Arizona, and one in Florida. Within the next three years, the United States will likely go from 420 megawatts of solar thermal generating capacity to close to 3,500 megawatts-an eightfold jump.
Along with wind and solar, geothermal energy is also developing at an explosive rate. As of 2008 the United States has nearly 3,000 megawatts of geothermal generating capacity, 2,500 of which are in California. Suddenly this too is changing. Some 96 geothermal power plants now under development in twelve western states are expected to double U.S. geothermal generating capacity. With California, Nevada, Oregon, Idaho, and Utah leading the way, the stage is set for the massive future development of geothermal energy. (See data).
The new energy economy will be powered largely by electricity from renewable sources. Electricity will light, heat, and cool buildings. As we shift to plug-in hybrid cars, light rail transit systems in cities, and high-speed electric intercity rail systems like those in Japan and Europe, our transport system will also be powered largely by electricity.
It is historically rare for so many interests to converge at one time and in one place as those now supporting the development of renewable energy resources in the United States. To begin with, shifting to renewables increases energy security simply because no one can cut off the supply of wind, solar, or geothermal energy. It also avoids the price volatility that has plagued oil and natural gas in recent decades. Once a wind farm or a solar thermal power plant is built, the price is stable since there is no fuel cost. Turning to renewables will also dramatically cut carbon emissions, moving us toward climate stability and thus avoiding the most dangerous effects of climate change.
The shift also will staunch the outflow of dollars for oil, keeping that capital at home to invest in the new energy economy, developing national renewable energy resources and creating jobs here. At a time of economic turmoil and rising joblessness, these new industries can generate thousands of new jobs each week. Not only are the wind, solar, and geothermal industries hiring new workers, they are also generating jobs in construction and in basic supply industries such as steel, aluminum, and silicon manufacturing. To build and operate the new energy economy will require huge numbers of electricians, plumbers, and roofers. It will also employ countless numbers of high-tech professionals such as wind meteorologists, geothermal geologists, and solar engineers.
To ensure that this shift to renewables continues at a rapid rate, national leadership is needed in one key area-building a strong national grid. Although private investors are investing in long-distance high-voltage transmission lines, these need to be incorporated into a carefully planned national grid, the electrical equivalent of President Eisenhower's interstate highway system, in order to unleash the full potential of renewable energy wealth.
And, finally, this energy transition is being driven by an intense excitement from the realization that people are now tapping energy sources that can last as long as the earth itself. Oil wells go dry and coal seams run out, but for the first time since the industrial revolution we are investing in energy sources that can last forever. This new energy economy can be our legacy to the next generation."
by Lester R. Brown Earth Policy Institute October 15, 2008
"As fossil fuel prices rise, as oil insecurity deepens, and as concerns about climate change cast a shadow over the future of coal, a new energy economy is emerging in the United States. The old energy economy, fueled by oil, coal, and natural gas, is being replaced by one powered by wind, solar, and geothermal energy. The transition is moving at a pace and on a scale that we could not have imagined even a year ago.
Consider Texas. Long the leading oil-producing state, it is now also the leading generator of electricity from wind, having overtaken California two years ago. Texas now has nearly 6,000 megawatts of wind-generating capacity online and a staggering 39,000 megawatts in the construction and planning stages. When all this is completed, Texas will have 45,000 megawatts of wind-generating capacity (think 45 coal-fired power plants). This will more than satisfy the residential needs of the state's 24 million people, enabling Texas to feed electricity to nearby states such as Louisiana and Mississippi.
After Texas and California, the other leaders among the 30 states with commercial-scale wind farms are Iowa, Minnesota, Washington, and Colorado. And other states are emerging as wind superpowers. Clipper Windpower and BP are teaming up to build the 5,050-megawatt Titan wind farm, the world's largest, in eastern South Dakota. Already under development, Titan will generate five times as much electricity as the state's 780,000 residents currently use. This project includes building a transmission line along an abandoned rail line across Iowa, feeding electricity into Illinois and the country's industrial heartland.
Colorado billionaire Philip Anschutz is developing a 2,000-megawatt wind farm in south central Wyoming. He already has secured the rights to build a 900-mile high-voltage transmission line to California. With this investment, the door will be opened to developing scores of huge wind farms in Wyoming, a wind-rich state with few people. Another transmission line under development will run north-south, linking eastern Wyoming's wind resources with the fast-growing Colorado cities of Fort Collins, Denver, and Colorado Springs. Wind-rich Kansas and Oklahoma are looking to build a transmission line to the U.S. Southeast to export their wealth of cheap wind energy.
California is developing a 4,500-megawatt wind farm complex in the Tehachapi Mountains northwest of Los Angeles. In the east, Maine-a wind energy newcomer-is planning to develop 3,000 megawatts of wind-generating capacity, far more than the state's 1.3 million residents need. Further south, Delaware is planning an offshore wind farm of up to 600 megawatts, which could satisfy half of the state's residential electricity needs. New York State, which has 700 megawatts of wind-generating capacity, plans to add another 8,000 megawatts, with most of the power being generated by winds coming off Lake Erie and Lake Ontario. And soon Oregon will nearly double its wind generating capacity with a 900-megawatt wind farm in the wind-rich Columbia River Gorge.
Wind appears destined to become the centerpiece of the new U.S. energy economy, eventually supplying several hundred thousand megawatts of electricity.
Solar power is also expanding at a breakneck pace. The nation's wealth of solar energy is being harnessed by using both photovoltaic cells and solar thermal power plants to convert sunlight into electricity. For solar cell installations, California, with its Million Solar Roofs plan, is far and away the leader. New Jersey is also moving fast, followed by Nevada.
The largest U.S. solar cell installation today is a 14-megawatt array at Nellis Air Force Base in Nevada, but photovoltaic electricity at the commercial level is about to go big time. PG&E has entered into two solar cell power contracts with a combined capacity of 800 megawatts. Together, these plants will cover 12 square miles of desert with solar cells and will have a peak output comparable to that of a large coal-fired power plant. Solar power plants are appealing in hot climates because their highest output coincides with the peak demand for air conditioning.
Solar thermal plants that use mirrors to concentrate sunlight on a vessel containing a fluid-heating it to 750 degrees Fahrenheit to generate steam and produce power-have suddenly become an enormously attractive technology. The United States has the world's only large solar thermal complex, a 350-megawatt project completed in 1991. But as of September 2008 there are 10 large solar thermal power plants under construction or in development in the United States, ranging in size from 180 megawatts to 550 megawatts. Eight of the plants will be built in California, one in Arizona, and one in Florida. Within the next three years, the United States will likely go from 420 megawatts of solar thermal generating capacity to close to 3,500 megawatts-an eightfold jump.
Along with wind and solar, geothermal energy is also developing at an explosive rate. As of 2008 the United States has nearly 3,000 megawatts of geothermal generating capacity, 2,500 of which are in California. Suddenly this too is changing. Some 96 geothermal power plants now under development in twelve western states are expected to double U.S. geothermal generating capacity. With California, Nevada, Oregon, Idaho, and Utah leading the way, the stage is set for the massive future development of geothermal energy. (See data).
The new energy economy will be powered largely by electricity from renewable sources. Electricity will light, heat, and cool buildings. As we shift to plug-in hybrid cars, light rail transit systems in cities, and high-speed electric intercity rail systems like those in Japan and Europe, our transport system will also be powered largely by electricity.
It is historically rare for so many interests to converge at one time and in one place as those now supporting the development of renewable energy resources in the United States. To begin with, shifting to renewables increases energy security simply because no one can cut off the supply of wind, solar, or geothermal energy. It also avoids the price volatility that has plagued oil and natural gas in recent decades. Once a wind farm or a solar thermal power plant is built, the price is stable since there is no fuel cost. Turning to renewables will also dramatically cut carbon emissions, moving us toward climate stability and thus avoiding the most dangerous effects of climate change.
The shift also will staunch the outflow of dollars for oil, keeping that capital at home to invest in the new energy economy, developing national renewable energy resources and creating jobs here. At a time of economic turmoil and rising joblessness, these new industries can generate thousands of new jobs each week. Not only are the wind, solar, and geothermal industries hiring new workers, they are also generating jobs in construction and in basic supply industries such as steel, aluminum, and silicon manufacturing. To build and operate the new energy economy will require huge numbers of electricians, plumbers, and roofers. It will also employ countless numbers of high-tech professionals such as wind meteorologists, geothermal geologists, and solar engineers.
To ensure that this shift to renewables continues at a rapid rate, national leadership is needed in one key area-building a strong national grid. Although private investors are investing in long-distance high-voltage transmission lines, these need to be incorporated into a carefully planned national grid, the electrical equivalent of President Eisenhower's interstate highway system, in order to unleash the full potential of renewable energy wealth.
And, finally, this energy transition is being driven by an intense excitement from the realization that people are now tapping energy sources that can last as long as the earth itself. Oil wells go dry and coal seams run out, but for the first time since the industrial revolution we are investing in energy sources that can last forever. This new energy economy can be our legacy to the next generation."
Two best Tracking Polls in the Country
If you look at the webpage RealClearPolitics, there are only two national polls that survey enough respondents to be close to accurate, Rasmussen and Gallup.
Rasmussen Reports
10/16 - 10/18
3000 LV
2.0% MOE
51% Obama
45% McCain
Obama +6
Gallup (Registered Voters)
10/16 - 10/18
2774 RV
2.0% MOE
52% Obama
42% McCain
Obama +10
You can subscribe to both for free. Rasmussen sends out a free daily report of their tracking poll. Here is the most recent report:
Daily Update
October 19, 2008
Daily Presidential Tracking Poll
The Rasmussen Reports daily Presidential Tracking Poll for Sunday shows Barack Obama attracting 51% of the vote while John McCain earns 45%. This is the first update based entirely upon interviews conducted after the final Presidential debate and shows that the race continues to remain quite stable. Obama's support has ranged from 50% to 52% every day for twenty-four straight days while McCain's total has been between 44% and 46% during those days.
New Rasmussen Reports Partisan Weighting Targets: 39.7% Democrat 33.0% Republican
Like all polling firms, Rasmussen Reports weights its data to reflect the population at large. Among other targets, Rasmussen Reports weights data by political party affiliation using a dynamic weighting process.
Democrats Favor Spreading the Wealth Around, GOP Disagrees
John McCain now says it's socialism, but Barack Obama insists, "When you spread the wealth around, it's good for everybody." Forty-four percent (44%) of voters agree with Obama's statement while 42% disagree in a new Rasmussen Reports national telephone survey. Sixty-nine percent (69%) of Democrats think their candidate is right, but 78% of Republicans disagree.
Rasmussen Reports
Rasmussen Markets
Daily Presidential Tracking Poll
Rasmussen Reports Video
Here is the Gallup update for 10/20/08:
"From Gallup.Com: Gallup Daily: Obama’s Lead Edges Higher"
Gallup Poll Daily tracking now gives Barack Obama an 11 percentage point lead over John McCain in the presidential vote preferences of all registered voters, 52% to 41%. Obama still leads, but by single digits, among “traditional” and “expanded” likely voters.
Read more at GALLUP.com.
Aloha, Brad
Rasmussen Reports
10/16 - 10/18
3000 LV
2.0% MOE
51% Obama
45% McCain
Obama +6
Gallup (Registered Voters)
10/16 - 10/18
2774 RV
2.0% MOE
52% Obama
42% McCain
Obama +10
You can subscribe to both for free. Rasmussen sends out a free daily report of their tracking poll. Here is the most recent report:
Daily Update
October 19, 2008
Daily Presidential Tracking Poll
The Rasmussen Reports daily Presidential Tracking Poll for Sunday shows Barack Obama attracting 51% of the vote while John McCain earns 45%. This is the first update based entirely upon interviews conducted after the final Presidential debate and shows that the race continues to remain quite stable. Obama's support has ranged from 50% to 52% every day for twenty-four straight days while McCain's total has been between 44% and 46% during those days.
New Rasmussen Reports Partisan Weighting Targets: 39.7% Democrat 33.0% Republican
Like all polling firms, Rasmussen Reports weights its data to reflect the population at large. Among other targets, Rasmussen Reports weights data by political party affiliation using a dynamic weighting process.
Democrats Favor Spreading the Wealth Around, GOP Disagrees
John McCain now says it's socialism, but Barack Obama insists, "When you spread the wealth around, it's good for everybody." Forty-four percent (44%) of voters agree with Obama's statement while 42% disagree in a new Rasmussen Reports national telephone survey. Sixty-nine percent (69%) of Democrats think their candidate is right, but 78% of Republicans disagree.
Rasmussen Reports
Rasmussen Markets
Daily Presidential Tracking Poll
Rasmussen Reports Video
Here is the Gallup update for 10/20/08:
"From Gallup.Com: Gallup Daily: Obama’s Lead Edges Higher"
Gallup Poll Daily tracking now gives Barack Obama an 11 percentage point lead over John McCain in the presidential vote preferences of all registered voters, 52% to 41%. Obama still leads, but by single digits, among “traditional” and “expanded” likely voters.
Read more at GALLUP.com.
Aloha, Brad
Saturday, October 18, 2008
"Turbulence and Trends" by London Banker
From: http://www.rgemonitor.com/financemarkets-monitor/253977/turbulence_and_trends
"Turbulence and Trends"
London Banker Oct 10, 2008
A trend is a trend is a trend.
But the question is, will it bend?
Will it alter its course
through some unforeseen force
and come to a premature end?
-- Sir Alec Cairncross
"I’ve had a lot of meetings this week, and very little time to reflect on fast moving events. This entry may be light on cites and hyperlinks as I’m in a bit of a rush today. It will also lack much in the way of perspective or insight as I find it impossible to distance myself just now from the swirling turbulence around me.
Here in Britain, several banks were offered partial nationalisation as an alternative to private recapitalisation. Strangely, this seems to have encouraged them to more strenuous efforts to recapitalise. The plan is now being held up as a model as it seems to force managements to confront their undercapitalisation as a problem that they can solve to their advantage or that will be solved for them to their heavy personal cost.
Iceland collapsed. It was more of a hedge fund than a country, with it’s 200,000 population supporting a massive leveraged position in financial markets via risk loving bankers and financiers. There were approximately 200,000 British depositors in accounts offered by Icelandic banks. Local authorities (municipalities) and charities were also big investors, exposed for more than £700 million. As a result, the government has frozen Icelandic-owned assets in the United Kingdom – using terrorism legislation, naturally – to provide the basis for a partial recovery of the losses likely to be incurred. This is causing more stress between the two island nations than they have known since the Cold Wars of the 1980s. Also causing tension is a rumour that Russia might bailout Iceland with $4.5 billion of credit, leading to speculation that the Russians may be eying the vacant airbase formerly used by Americans. This is problematic as Iceland is a member of NATO, and so has spurred efforts toward finding European alternatives.
Europe continues to call for collaboration while each country unilaterally defines and acts on its self-interest. That is the way it should be, and I approve heartily. I would rather not have the European Union making hasty decisions or holding such concentrated powers that it can force a uniform resolution across all member states. Either the EU builds consensus for action in the common interest, or it remains impotent. Either is preferable to too much concentration of power in Brussels.
In an attempt to shut just one stable door in a barn full of bolting horses, the Treasury has laid legislation before Parliament to reform the treatment of UK bank insolvencies and deposit insurance arrangements. Roughly described, the Financial Services Authority will decide if a bank is bust, the Bank of England will be responsible for overseeing its resolution and ensuring financial stability of the system, and the Treasury will oversee a new deposit insurance scheme that no one can currently describe but will make permanent the rise in protection to £50,000 per depositor. Despite the massive failure of Lehman, and the huge losses incurred by investors and hedge fund prime brokerage clients in London, the legislation is completely silent on the insolvencies of investment banks and broker-dealers and other institutions of systemic importance to financial markets. My fear is that the failure to address the systemic issues as a whole will be a vulnerability exploited by US banks and authorities as they try to undermine London as a financial centre, gaming the fragile global markets.
There is still a touching confidence among many in the City that the US authorities will provide the “leadership” to reinforce collapsing markets. As John Plender of the Financial Times quipped, “Gaul votes for Rome to take the strain.” This seems to me to display a total incomprehension of the way US authorities operate to externalise pain and loss to the greatest extent possible in times of crisis. Gaul, after all, was an occupied state that was militarily and economically exploited to Rome’s advantage for centuries before Rome’s collapse. Saving Gaul was never a high priority once Rome was threatened.
Elsewhere in the world, bureaucrats continue to show up at the office in the morning and check to make sure all boxes are ticked, all forms are correctly ordered, and all initiatives in progress continue their stately way forward unimpeded by global chaos. I find this comforting, although much of their efforts will ultimately prove futile and failed.
Finally, an optimistic note. I was reminded yesterday that the vast bulk of “wealth” created during the Greenspan/Bernanke bubble years accrued to the very top percentiles of population – with many in the OECD middle class and lower class either stagnating or getting poorer as they mired themselves in unsustainable debt. While opportunity and employment grew strongly in emerging countries, there too the elites gained disproportionately as income inequalities surged. The crash of global financial markets therefore will have disproportionate effect on the elites, impoverishing them to a far greater extent, although it will be felt throughout society as employment, pensions, investments and public services contract.
Once we hit bottom of this downturn, some years hence in all probability, we may experience a democratisation of wealth and opportunity like none seen since the end of World War II when education reforms and unionisation laid the groundwork for the rise of the American and OECD middle classes. Those who have lost economic and political power during the boom years, are likely to organise and retake authority within economic and political systems during the bust years. This could provide reorientation of economic progress toward more equitable, sustainable and democratic outcomes in coming generations. I hope so, it’s the only bright spot of the week."
Aloha, Brad
"Turbulence and Trends"
London Banker Oct 10, 2008
A trend is a trend is a trend.
But the question is, will it bend?
Will it alter its course
through some unforeseen force
and come to a premature end?
-- Sir Alec Cairncross
"I’ve had a lot of meetings this week, and very little time to reflect on fast moving events. This entry may be light on cites and hyperlinks as I’m in a bit of a rush today. It will also lack much in the way of perspective or insight as I find it impossible to distance myself just now from the swirling turbulence around me.
Here in Britain, several banks were offered partial nationalisation as an alternative to private recapitalisation. Strangely, this seems to have encouraged them to more strenuous efforts to recapitalise. The plan is now being held up as a model as it seems to force managements to confront their undercapitalisation as a problem that they can solve to their advantage or that will be solved for them to their heavy personal cost.
Iceland collapsed. It was more of a hedge fund than a country, with it’s 200,000 population supporting a massive leveraged position in financial markets via risk loving bankers and financiers. There were approximately 200,000 British depositors in accounts offered by Icelandic banks. Local authorities (municipalities) and charities were also big investors, exposed for more than £700 million. As a result, the government has frozen Icelandic-owned assets in the United Kingdom – using terrorism legislation, naturally – to provide the basis for a partial recovery of the losses likely to be incurred. This is causing more stress between the two island nations than they have known since the Cold Wars of the 1980s. Also causing tension is a rumour that Russia might bailout Iceland with $4.5 billion of credit, leading to speculation that the Russians may be eying the vacant airbase formerly used by Americans. This is problematic as Iceland is a member of NATO, and so has spurred efforts toward finding European alternatives.
Europe continues to call for collaboration while each country unilaterally defines and acts on its self-interest. That is the way it should be, and I approve heartily. I would rather not have the European Union making hasty decisions or holding such concentrated powers that it can force a uniform resolution across all member states. Either the EU builds consensus for action in the common interest, or it remains impotent. Either is preferable to too much concentration of power in Brussels.
In an attempt to shut just one stable door in a barn full of bolting horses, the Treasury has laid legislation before Parliament to reform the treatment of UK bank insolvencies and deposit insurance arrangements. Roughly described, the Financial Services Authority will decide if a bank is bust, the Bank of England will be responsible for overseeing its resolution and ensuring financial stability of the system, and the Treasury will oversee a new deposit insurance scheme that no one can currently describe but will make permanent the rise in protection to £50,000 per depositor. Despite the massive failure of Lehman, and the huge losses incurred by investors and hedge fund prime brokerage clients in London, the legislation is completely silent on the insolvencies of investment banks and broker-dealers and other institutions of systemic importance to financial markets. My fear is that the failure to address the systemic issues as a whole will be a vulnerability exploited by US banks and authorities as they try to undermine London as a financial centre, gaming the fragile global markets.
There is still a touching confidence among many in the City that the US authorities will provide the “leadership” to reinforce collapsing markets. As John Plender of the Financial Times quipped, “Gaul votes for Rome to take the strain.” This seems to me to display a total incomprehension of the way US authorities operate to externalise pain and loss to the greatest extent possible in times of crisis. Gaul, after all, was an occupied state that was militarily and economically exploited to Rome’s advantage for centuries before Rome’s collapse. Saving Gaul was never a high priority once Rome was threatened.
Elsewhere in the world, bureaucrats continue to show up at the office in the morning and check to make sure all boxes are ticked, all forms are correctly ordered, and all initiatives in progress continue their stately way forward unimpeded by global chaos. I find this comforting, although much of their efforts will ultimately prove futile and failed.
Finally, an optimistic note. I was reminded yesterday that the vast bulk of “wealth” created during the Greenspan/Bernanke bubble years accrued to the very top percentiles of population – with many in the OECD middle class and lower class either stagnating or getting poorer as they mired themselves in unsustainable debt. While opportunity and employment grew strongly in emerging countries, there too the elites gained disproportionately as income inequalities surged. The crash of global financial markets therefore will have disproportionate effect on the elites, impoverishing them to a far greater extent, although it will be felt throughout society as employment, pensions, investments and public services contract.
Once we hit bottom of this downturn, some years hence in all probability, we may experience a democratisation of wealth and opportunity like none seen since the end of World War II when education reforms and unionisation laid the groundwork for the rise of the American and OECD middle classes. Those who have lost economic and political power during the boom years, are likely to organise and retake authority within economic and political systems during the bust years. This could provide reorientation of economic progress toward more equitable, sustainable and democratic outcomes in coming generations. I hope so, it’s the only bright spot of the week."
Aloha, Brad
"Plan B" -- Renegotiation for Mainstreet by Luigi Zingales, Ph.D.
From: http://www.rgemonitor.com/financemarkets-monitor/253999/plan_b
"Plan B"
Luigi Zingales Oct 12, 2008
"After pointing a gun to the head of Congress, threatening a financial meltdown in case his plan was not approved, Treasury Secretary Hank Paulson has finally arrived at the only logical conclusion: his plan will not work.
Desperate for a Plan B, Paulson is slowly warming to the suggestion of many economists: inject some equity into the banking system. Unfortunately, it is too little and too late. The confidence crisis currently affecting the financial system is so severe that only a massive infusion of equity capital can reassure the market that the major banks will not fail, recreating the confidence for banks to lend to each other. The piecemeal approach of 100 billion today, 100 billion tomorrow used with AIG will not ork. It will only eat up the money, without achieving the desired effect—without reassuring the market that the worst is over. Simply stated, nothing short of a 5% increase in the equity capital of the banking system will do the trick. We are talking about 600 billion. Unfortunately, even if the government is willing to spend this kind of money, there are three problems.
First, to restore the necessary confidence, a capital infusion needs to reduce a financial institutions’ risk of default to trivial levels. This implies transforming the existing, outstanding debt (roughly two trillion if we just count the long-term bonds) into safe debt. A large fraction of the equity injected will not go to generate new loans, but to provide this insurance to the existing debtholders. How much? We can estimate it by looking at the credit default swaps, which provide us with the cost of insuring the debt against default. At yesterday’s prices, the cost of insuring the two trillion of outstanding long-term bonds outstanding would be more than 300 billion. Consequently, half of the capital the Government will invest in banks will not go to increase new loans, but to bail out Wall Street investors.
Second, a capital infusion does not address the root of the problem, which stems from the housing market. If homeowners continue to default and walk away from their houses, the banking sector will continue to bleed and additional equity infusions will be needed. More importantly, the very bailout plan, and the animosity it generates, will induce more homeowners who are sitting on a house with a negative equity value to walk away. Many of them will think: “Why do I have to play by the rules when Wall Street does not?”
This leads us to the third and most important problem. If we bail out Wall Street, why not bail out Detroit (probably another 150 billion) and Main Street? In fact, Senator McCain has already talked about buying out the defaulted mortgages to keep people in their homes. Even if we limit ourselves only to the subprime mortgages, we are talking about $1.3 trillion. Where do we stop?
We need a different solution: a Plan B. A plan that minimizes the money the Government uses in bailing out Wall Street and Main Street to save our precious dollars for a stimulus package, which will be essential to restarting the economy.
Rescuing Main Street
Suppose that you bought a house in California in 2006. You paid $400,000 with only 5% down. Unfortunately, during the last two years the value of your house dropped by 30%; thus, you now find yourself with a mortgage worth $380,000 and a house worth $280,000. Even if you can afford your monthly payment (and you probably cannot), why should you struggle to pay the mortgage when walking away will save you $100,000, more than most people can save in a lifetime? However, when the homeowner walks away, the mortgage holder does not recover $280,000. The foreclosure process takes some time during which the house is not properly maintained and further deteriorates in value. The recovery rate in standard mortgage foreclosures (which will not take place in the middle of the worst crisis since the Great Depression) is 50 cents per dollar of the mortgage. I am generous in estimating that under the current conditions it might recover 50 cents per dollar of the appraised value of the house; right now, it is only 37 cents per dollar of the mortgage, which given a house appraised at $280,000 equals only $140,000 for the mortgage holder. In other words, foreclosing is costly for both the borrower and the lender. The mortgage holder gains only half of what is lost by the homeowners, due to what we economists call underinvestment: the failure to maintain the house.
In the old days, when the mortgage was granted by your local bank, there was a simple solution to this tremendous inefficiency. The bank forgave part of your mortgage; let’s say 30%. This creates a small positive equity value—an incentive—for you to stay. Since you stay and maintain the house, the bank gets its $266,000 dollars of the new debt back, which trumps the $140,000 that it was getting through foreclosure.
Unfortunately, this win-win solution is not possible today. Your mortgage has been sold and repackaged in an asset-backed security pool and sold in tranches with different priorities. There is disagreement on who has the right to renegotiate and renegotiation might require the agreement of at least 60% of the debt holders, who are spread throughout the globe. This is not going to happen. Furthermore, unlike your local bank, distant debt holders cannot tell whether you are a good borrower who has been unlucky or somebody just trying to take advantage of the lender. In doubt, they do not want to cut the debt for fear that even the homeowners who can easily afford their mortgage will ask for debt forgiveness.
Here is where government intervention can help. Instead of pouring money to either side, the government should provide a standardized way to re-negtiate; one that is both fast and fair.
Here is my proposal.
Congress should pass a law that makes a re-contracting option available to all homeowners living in a zip code where house prices dropped by more than 20% since the time they bought their property. Why? Because there is no reason to give a break to inhabitants of Charlotte, North Carolina, where house prices have risen 4% in the last two years.
How do we implement this? Thanks to two brilliant economists, Chip Case and Robert Shiller, we have reliable measures of house price changes at the zip code level. Thus, by using this real estate index, the re-contracting option will reduce the face value of the mortgage (and the corresponding interest payments) by the same percentage by which house prices have declined since the homeowner bought (or refinanced) his property. Exactly like in my hypothetical example above.
In exchange, however, the mortgage holder will receive some of the equity value of the house at the time it is sold. Until then, the homeowners will behave as if they own 100% of it. It is only at the time of sale that 50% of the difference between the selling price and the new value of the mortgage will be paid back to the mortgage holder. It seems a strange contract, but Stanford University successfully implemented a similar arrangement for its faculty: the university financed part of the house purchase in exchange for a fraction of the appreciation value at the time of exit.
The reason for this sharing of the benefits is twofold. On the one hand, it makes the renegotiation less appealing to the homeowners, making it unattractive to those not in need of it. For example, homeowners with a very large equity in their house (who do not need any restructuring because they are not at risk of default) will find it very costly to use this option because they will have to give up 50% of the value of their equity. Second, it reduces the cost of renegotiation for the lending institutions, which minimizes the problems in the financial system.
Since the option to renegotiate offered by the American Housing Rescue & Foreclosure Prevention Act does not seem to have been stimulus enough, this recontracting will be forced on lenders, but it will be given as an option to homeowners, who will have to announce their intention in a relatively brief period of time.
The great benefit of this program is that provides relief to distressed homeowners at no cost to the Federal government and at the minimum possible cost for the mortgage holders. The other great benefit is that it will stop defaults on mortgages, eliminating the flood of houses on the market and thus reducing the downside pressure on real estate prices. By stabilizing the real estate market, this plan can help prevent further deterioration of financial institutions’ balance sheets. But it will not resolve the problem of severe undercapitalization that these institutions are currently facing. For this we need the second part of the plan.
Rescuing Wall Street
The plan for Wall Street follows the same main idea: facilitating an efficient renegotiation. The key difference between the Main Street and Wall Street plans is in the ease of assessing the current value of the troubled assets. It is relatively easy to estimate the current value of a house by looking at the purchase price and at the intervening drop in value (per the Case and Shiller index). In banks, however, the lack of transparency makes this estimation very difficult. To avoid having to come up with this estimate, which would be a difficult process and one fraught with potential conflict of interests, we are going to use a clever mechanism invented twenty years ago by a lawyer economist, Lucian Bebchuk.
The core idea is to have Congress pass a law that sets up a new form of prepackaged bankruptcy that would allow banks to restructure their debt and restart lending. Prepackaged means that all the terms are pre-specified and banks could come out of it overnight. All that would be required is a signature from a federal judge. In the private sector the terms are generally agreed among the parties involved, the innovation here would be to have all the terms pre-set by the government, thereby speeding up the process. Firms who enter into this special bankruptcy would have their old equity holders wiped out and their existing debt (commercial paper and bonds) transformed into equity. This would immediately make banks solid, by providing a large equity buffer. As it stands now, banks have lost so much in junk mortgages that the value of their equity has tumbled nearly to zero. In other words, they are close to being insolvent. By transforming all banks’ debt into equity this special Chapter 11 would make banks solvent and ready to lend again to their customers.
Certainly, some current shareholders might disagree that their bank is insolvent and would feel expropriated by a proceeding that wipes them out. This is where the Bebchuk mechanism comes in handy. After the filing of the special bankruptcy, we give these shareholders one week to buy out the old debtholders by paying them the face value of the debt. Each shareholder can decide individually. If he thinks that the company is solvent, he pays his share of debt and regains his share of equity. Otherwise, he lets it go.
My plan would exempt individual depositors, which are federally ensured. I would also exempt credit default swaps and repo contracts to avoid potential ripple effect through the system (what happened by not directing Lehman Brothers through a similar procedure). It would suffice to write in this special bankruptcy code that banks who enter it would not be considered in default as far as their contracts are concerned.
How would the government induce insolvent banks (and only those) to voluntarily initiate these special bankruptcy proceedings? One way is to harness the power of short-term debt. By involving the short-term debt in the restructuring, this special bankruptcy will engender fear in short-term creditors. If they think the institution might be insolvent, they will pull their money out as soon as they can for fear of being involved in this restructuring. In so doing, they will generate a liquidity crisis that will force these institutions into this special bankruptcy.
An alternative mechanism is to have the Fed limit access to liquidity. Both banks and investment banks currently can go to the Federal Reserve’s discount window, meaning that they can, by posting collateral, receive cash at a reasonable rate of interest. Under my plan, for the next two years only banks that underwent this special form of bankruptcy would get access to the discount window. In this way, solid financial institutions that do not need liquidity are not forced to undergo through this restructuring, while insolvent ones would rush into it to avoid a government takeover.
Another problem could be that the institutions owning the debt, which will end up owning the equity after the restructuring, might be restricted by regulation or contract to holding equity. To prevent a dumping of shares that would have a negative effect on market prices, it is enough to include a norm that allows these institutions two years to comply with the norm. This was the standard practice in the old days when banks, who could not own equity, were forced to take some in a restructuring.
The beauty of this approach is threefold. First, it recapitalizes the banking sector at no cost to taxpayers. Second, it keeps the government out of the difficult business of establishing the price of distressed assets. If debt is converted into equity, its total value would not change, only the legal nature of the claim would. Third, this plan removes the possibility of the government playing God, deciding which banks are allowed to live and which should die; the market will make those decisions.
Tomorrow is too late
The United States (and possibly the world) is facing the biggest financial crisis since the Great Depression. There is a strong quest for the government to intervene to rescue us, but how? Thus far, the Treasury seems to have been following the advice of Wall Street, which consists in throwing public money at the problems. However, the cost is quickly escalating. If we do not stop, we will leave an unbearable burden of debt to our children.
Time has come for the Treasury secretary to listen to some economists. By understanding the causes of the current crisis, we can help solve it without relying on public money. Thus, I feel it is my duty as an economist to provide an alternative: a market-based solution, which does not waste public money and uses the force of the government only to speed up the restructuring. It may not be perfect, but it is a viable avenue that should be explored before acquiescing to the perceived inevitability of Paulson’s proposals." Originally published at Luigi Zingales' webpage.
Aloha, Brad
"Plan B"
Luigi Zingales Oct 12, 2008
"After pointing a gun to the head of Congress, threatening a financial meltdown in case his plan was not approved, Treasury Secretary Hank Paulson has finally arrived at the only logical conclusion: his plan will not work.
Desperate for a Plan B, Paulson is slowly warming to the suggestion of many economists: inject some equity into the banking system. Unfortunately, it is too little and too late. The confidence crisis currently affecting the financial system is so severe that only a massive infusion of equity capital can reassure the market that the major banks will not fail, recreating the confidence for banks to lend to each other. The piecemeal approach of 100 billion today, 100 billion tomorrow used with AIG will not ork. It will only eat up the money, without achieving the desired effect—without reassuring the market that the worst is over. Simply stated, nothing short of a 5% increase in the equity capital of the banking system will do the trick. We are talking about 600 billion. Unfortunately, even if the government is willing to spend this kind of money, there are three problems.
First, to restore the necessary confidence, a capital infusion needs to reduce a financial institutions’ risk of default to trivial levels. This implies transforming the existing, outstanding debt (roughly two trillion if we just count the long-term bonds) into safe debt. A large fraction of the equity injected will not go to generate new loans, but to provide this insurance to the existing debtholders. How much? We can estimate it by looking at the credit default swaps, which provide us with the cost of insuring the debt against default. At yesterday’s prices, the cost of insuring the two trillion of outstanding long-term bonds outstanding would be more than 300 billion. Consequently, half of the capital the Government will invest in banks will not go to increase new loans, but to bail out Wall Street investors.
Second, a capital infusion does not address the root of the problem, which stems from the housing market. If homeowners continue to default and walk away from their houses, the banking sector will continue to bleed and additional equity infusions will be needed. More importantly, the very bailout plan, and the animosity it generates, will induce more homeowners who are sitting on a house with a negative equity value to walk away. Many of them will think: “Why do I have to play by the rules when Wall Street does not?”
This leads us to the third and most important problem. If we bail out Wall Street, why not bail out Detroit (probably another 150 billion) and Main Street? In fact, Senator McCain has already talked about buying out the defaulted mortgages to keep people in their homes. Even if we limit ourselves only to the subprime mortgages, we are talking about $1.3 trillion. Where do we stop?
We need a different solution: a Plan B. A plan that minimizes the money the Government uses in bailing out Wall Street and Main Street to save our precious dollars for a stimulus package, which will be essential to restarting the economy.
Rescuing Main Street
Suppose that you bought a house in California in 2006. You paid $400,000 with only 5% down. Unfortunately, during the last two years the value of your house dropped by 30%; thus, you now find yourself with a mortgage worth $380,000 and a house worth $280,000. Even if you can afford your monthly payment (and you probably cannot), why should you struggle to pay the mortgage when walking away will save you $100,000, more than most people can save in a lifetime? However, when the homeowner walks away, the mortgage holder does not recover $280,000. The foreclosure process takes some time during which the house is not properly maintained and further deteriorates in value. The recovery rate in standard mortgage foreclosures (which will not take place in the middle of the worst crisis since the Great Depression) is 50 cents per dollar of the mortgage. I am generous in estimating that under the current conditions it might recover 50 cents per dollar of the appraised value of the house; right now, it is only 37 cents per dollar of the mortgage, which given a house appraised at $280,000 equals only $140,000 for the mortgage holder. In other words, foreclosing is costly for both the borrower and the lender. The mortgage holder gains only half of what is lost by the homeowners, due to what we economists call underinvestment: the failure to maintain the house.
In the old days, when the mortgage was granted by your local bank, there was a simple solution to this tremendous inefficiency. The bank forgave part of your mortgage; let’s say 30%. This creates a small positive equity value—an incentive—for you to stay. Since you stay and maintain the house, the bank gets its $266,000 dollars of the new debt back, which trumps the $140,000 that it was getting through foreclosure.
Unfortunately, this win-win solution is not possible today. Your mortgage has been sold and repackaged in an asset-backed security pool and sold in tranches with different priorities. There is disagreement on who has the right to renegotiate and renegotiation might require the agreement of at least 60% of the debt holders, who are spread throughout the globe. This is not going to happen. Furthermore, unlike your local bank, distant debt holders cannot tell whether you are a good borrower who has been unlucky or somebody just trying to take advantage of the lender. In doubt, they do not want to cut the debt for fear that even the homeowners who can easily afford their mortgage will ask for debt forgiveness.
Here is where government intervention can help. Instead of pouring money to either side, the government should provide a standardized way to re-negtiate; one that is both fast and fair.
Here is my proposal.
Congress should pass a law that makes a re-contracting option available to all homeowners living in a zip code where house prices dropped by more than 20% since the time they bought their property. Why? Because there is no reason to give a break to inhabitants of Charlotte, North Carolina, where house prices have risen 4% in the last two years.
How do we implement this? Thanks to two brilliant economists, Chip Case and Robert Shiller, we have reliable measures of house price changes at the zip code level. Thus, by using this real estate index, the re-contracting option will reduce the face value of the mortgage (and the corresponding interest payments) by the same percentage by which house prices have declined since the homeowner bought (or refinanced) his property. Exactly like in my hypothetical example above.
In exchange, however, the mortgage holder will receive some of the equity value of the house at the time it is sold. Until then, the homeowners will behave as if they own 100% of it. It is only at the time of sale that 50% of the difference between the selling price and the new value of the mortgage will be paid back to the mortgage holder. It seems a strange contract, but Stanford University successfully implemented a similar arrangement for its faculty: the university financed part of the house purchase in exchange for a fraction of the appreciation value at the time of exit.
The reason for this sharing of the benefits is twofold. On the one hand, it makes the renegotiation less appealing to the homeowners, making it unattractive to those not in need of it. For example, homeowners with a very large equity in their house (who do not need any restructuring because they are not at risk of default) will find it very costly to use this option because they will have to give up 50% of the value of their equity. Second, it reduces the cost of renegotiation for the lending institutions, which minimizes the problems in the financial system.
Since the option to renegotiate offered by the American Housing Rescue & Foreclosure Prevention Act does not seem to have been stimulus enough, this recontracting will be forced on lenders, but it will be given as an option to homeowners, who will have to announce their intention in a relatively brief period of time.
The great benefit of this program is that provides relief to distressed homeowners at no cost to the Federal government and at the minimum possible cost for the mortgage holders. The other great benefit is that it will stop defaults on mortgages, eliminating the flood of houses on the market and thus reducing the downside pressure on real estate prices. By stabilizing the real estate market, this plan can help prevent further deterioration of financial institutions’ balance sheets. But it will not resolve the problem of severe undercapitalization that these institutions are currently facing. For this we need the second part of the plan.
Rescuing Wall Street
The plan for Wall Street follows the same main idea: facilitating an efficient renegotiation. The key difference between the Main Street and Wall Street plans is in the ease of assessing the current value of the troubled assets. It is relatively easy to estimate the current value of a house by looking at the purchase price and at the intervening drop in value (per the Case and Shiller index). In banks, however, the lack of transparency makes this estimation very difficult. To avoid having to come up with this estimate, which would be a difficult process and one fraught with potential conflict of interests, we are going to use a clever mechanism invented twenty years ago by a lawyer economist, Lucian Bebchuk.
The core idea is to have Congress pass a law that sets up a new form of prepackaged bankruptcy that would allow banks to restructure their debt and restart lending. Prepackaged means that all the terms are pre-specified and banks could come out of it overnight. All that would be required is a signature from a federal judge. In the private sector the terms are generally agreed among the parties involved, the innovation here would be to have all the terms pre-set by the government, thereby speeding up the process. Firms who enter into this special bankruptcy would have their old equity holders wiped out and their existing debt (commercial paper and bonds) transformed into equity. This would immediately make banks solid, by providing a large equity buffer. As it stands now, banks have lost so much in junk mortgages that the value of their equity has tumbled nearly to zero. In other words, they are close to being insolvent. By transforming all banks’ debt into equity this special Chapter 11 would make banks solvent and ready to lend again to their customers.
Certainly, some current shareholders might disagree that their bank is insolvent and would feel expropriated by a proceeding that wipes them out. This is where the Bebchuk mechanism comes in handy. After the filing of the special bankruptcy, we give these shareholders one week to buy out the old debtholders by paying them the face value of the debt. Each shareholder can decide individually. If he thinks that the company is solvent, he pays his share of debt and regains his share of equity. Otherwise, he lets it go.
My plan would exempt individual depositors, which are federally ensured. I would also exempt credit default swaps and repo contracts to avoid potential ripple effect through the system (what happened by not directing Lehman Brothers through a similar procedure). It would suffice to write in this special bankruptcy code that banks who enter it would not be considered in default as far as their contracts are concerned.
How would the government induce insolvent banks (and only those) to voluntarily initiate these special bankruptcy proceedings? One way is to harness the power of short-term debt. By involving the short-term debt in the restructuring, this special bankruptcy will engender fear in short-term creditors. If they think the institution might be insolvent, they will pull their money out as soon as they can for fear of being involved in this restructuring. In so doing, they will generate a liquidity crisis that will force these institutions into this special bankruptcy.
An alternative mechanism is to have the Fed limit access to liquidity. Both banks and investment banks currently can go to the Federal Reserve’s discount window, meaning that they can, by posting collateral, receive cash at a reasonable rate of interest. Under my plan, for the next two years only banks that underwent this special form of bankruptcy would get access to the discount window. In this way, solid financial institutions that do not need liquidity are not forced to undergo through this restructuring, while insolvent ones would rush into it to avoid a government takeover.
Another problem could be that the institutions owning the debt, which will end up owning the equity after the restructuring, might be restricted by regulation or contract to holding equity. To prevent a dumping of shares that would have a negative effect on market prices, it is enough to include a norm that allows these institutions two years to comply with the norm. This was the standard practice in the old days when banks, who could not own equity, were forced to take some in a restructuring.
The beauty of this approach is threefold. First, it recapitalizes the banking sector at no cost to taxpayers. Second, it keeps the government out of the difficult business of establishing the price of distressed assets. If debt is converted into equity, its total value would not change, only the legal nature of the claim would. Third, this plan removes the possibility of the government playing God, deciding which banks are allowed to live and which should die; the market will make those decisions.
Tomorrow is too late
The United States (and possibly the world) is facing the biggest financial crisis since the Great Depression. There is a strong quest for the government to intervene to rescue us, but how? Thus far, the Treasury seems to have been following the advice of Wall Street, which consists in throwing public money at the problems. However, the cost is quickly escalating. If we do not stop, we will leave an unbearable burden of debt to our children.
Time has come for the Treasury secretary to listen to some economists. By understanding the causes of the current crisis, we can help solve it without relying on public money. Thus, I feel it is my duty as an economist to provide an alternative: a market-based solution, which does not waste public money and uses the force of the government only to speed up the restructuring. It may not be perfect, but it is a viable avenue that should be explored before acquiescing to the perceived inevitability of Paulson’s proposals." Originally published at Luigi Zingales' webpage.
Aloha, Brad
2008 Kaua'i Renewable Energy Conference
There is lots of useful information in these Powerpoints and soon videos from: http://www.kedb.com/energyconference.asp
Presented by Kaua`i Economic Development Board in Partnership with the United States Department of Energy, County of Kaua`i Office of Economic Development, and Kaua`i Island Utility Cooperative
Mahalo to everyone who attended the 2008 Kaua`i Renewable Energy Conference, and mahalo to all the speakers, sponsors, and coordinators of this call to action for our county.
Please check back periodically for more updates and next steps. In the meantime, here are links for handouts, post-event media coverage, speaker PowerPoint Presentations, and other information from the Conference. Videos of all the proceedings will be loaded onto this page shortly -- please check back periodically.
CONFERENCE AGENDA
SPONSORSHIP PACKET
CONFERENCE PROGRAM and ADDENDUM
LIST OF CONFERENCE SPONSORS - Mahalo to all of our generous sponsors!
POST-EVENT COVERAGE
"Energy Solutions Main Focus" (The Garden Island Newspaper, 09/09/08)
"Political Will Problem, Panel Says" (The Garden Island Newspaper, 09/10/08)
"Work Toward Renewable Energy on Kaua`i Detailed" (The Honolulu Advertiser, 09/10/08)
"Energy Conference Generates Excitement" (Kauai People Weekly Newspaper, 09/17/08)
SPEAKER POWERPOINT PRESENTATIONS
Day One: Monday, September 8, 2008
Morning Keynote Speaker
Maurice Kaya, Strategic Energy & Management Consultant and Former Chieft Technology Officer for Hawai`i DBEDT
Panel 1:
Christopher J. Benjamin, Senior Vice President & CFO, Alexander & Baldwin, Inc.
Bill Cowern, President, Hawaiian Mahogany (Partnering with Green Energy Hawai`i LLC)
Captain Aaron L. Cudnohufsky, United States Navy, Commanding Officer at Pacific Missile Range Facility
Randall Hee, President & Chief Executive Officer, Kaua`i Island Utility Cooperative
D. Noelani Kalipi, Director of Government & Community Relations, First Wind
E. Alan Kennett, President & General Manager, Gay & Robinson Inc.
Mike Tresler, Senior Vice President, Grove Farm Company
Dr. Paul S. Zorner, Ph.D., President & Chief Executive Officer, Hawaii BioEnergy LLC
Luncheon Keynote
Bill Parks, Jr., Deputy Assistant Secretary for Electricity & Energy Reliability, U.S. Department of Energy
Panel 2:
D. Noelani Kalipi, Director of Government & Community Relations, First Wind
William Milks, Former Executive Director for Hawai`i Division of Consumer Advocacy (No PPT available)
Dr. Charles L. Morgan, Environmental Planner, Planning Solutions, Inc.
State Representative Mina Morita, Chair of the Hawai`i House Committee on Energy and Environment
Theodore Peck, Manager-Energy Planning & Policy Branch, Hawai`i Dept of Business, Economic Dev't & Tourism
Additional Resources and Links
"Obstacles in Hawai`i Laws to Implementation of Energy Efficiency and Renewable Resources - A Review of Hawai`i's State and County Laws" Prepared for the Hawaii Energy Policy Forum by Carl Freedman of Haiku Design & Analysis, December 28, 2007
Panel 3:
Paul Bierman-Lytle, Principal & Chief Sustainability Officer, Group 70 International(Part 1 (Slides 1-15), Part 2 (Slides 16-31))
Miles Kubo, President, Energy Industries
Ray Mierta, Manager-Energy Services, Kaua`i Island Utility Cooperative
Douglas Sears, General Manager, Grand Hyatt Kaua`i Resort & Spa
Day Two, Tuesday, September 9, 2008
Morning Keynote Jennifer Goto Sabas, Chief of Staff for U.S. Senator Daniel K. Inouye (No PPT available)
Panel 1:
Pete Cooper, Global Development, Better Place
Jon Hurwitch, Executive Vice President—New & Diversified Business, Sentech Inc. (Part 1 (Slides 1-21), Part 2 (Slides 22-42))
Bruce Norman, General Manager—Controls Product Management, GE Energy
Scott Thigpen, Senior Associate, Booz Allen Hamilton
Summary of Findings Session
Conducted by Maurice Kaya and Bill Parks (No PPT available) (Video and summary TBA)
Luncheon Keynote
State Senator Gary L. Hooser, Hawai`i Senate Majority Leaders and Vice Chair of the State Senate Committee on Energy & Environment (no PPT available)
Presented by Kaua`i Economic Development Board in Partnership with the United States Department of Energy, County of Kaua`i Office of Economic Development, and Kaua`i Island Utility Cooperative
Mahalo to everyone who attended the 2008 Kaua`i Renewable Energy Conference, and mahalo to all the speakers, sponsors, and coordinators of this call to action for our county.
Please check back periodically for more updates and next steps. In the meantime, here are links for handouts, post-event media coverage, speaker PowerPoint Presentations, and other information from the Conference. Videos of all the proceedings will be loaded onto this page shortly -- please check back periodically.
CONFERENCE AGENDA
SPONSORSHIP PACKET
CONFERENCE PROGRAM and ADDENDUM
LIST OF CONFERENCE SPONSORS - Mahalo to all of our generous sponsors!
POST-EVENT COVERAGE
"Energy Solutions Main Focus" (The Garden Island Newspaper, 09/09/08)
"Political Will Problem, Panel Says" (The Garden Island Newspaper, 09/10/08)
"Work Toward Renewable Energy on Kaua`i Detailed" (The Honolulu Advertiser, 09/10/08)
"Energy Conference Generates Excitement" (Kauai People Weekly Newspaper, 09/17/08)
SPEAKER POWERPOINT PRESENTATIONS
Day One: Monday, September 8, 2008
Morning Keynote Speaker
Maurice Kaya, Strategic Energy & Management Consultant and Former Chieft Technology Officer for Hawai`i DBEDT
Panel 1:
Christopher J. Benjamin, Senior Vice President & CFO, Alexander & Baldwin, Inc.
Bill Cowern, President, Hawaiian Mahogany (Partnering with Green Energy Hawai`i LLC)
Captain Aaron L. Cudnohufsky, United States Navy, Commanding Officer at Pacific Missile Range Facility
Randall Hee, President & Chief Executive Officer, Kaua`i Island Utility Cooperative
D. Noelani Kalipi, Director of Government & Community Relations, First Wind
E. Alan Kennett, President & General Manager, Gay & Robinson Inc.
Mike Tresler, Senior Vice President, Grove Farm Company
Dr. Paul S. Zorner, Ph.D., President & Chief Executive Officer, Hawaii BioEnergy LLC
Luncheon Keynote
Bill Parks, Jr., Deputy Assistant Secretary for Electricity & Energy Reliability, U.S. Department of Energy
Panel 2:
D. Noelani Kalipi, Director of Government & Community Relations, First Wind
William Milks, Former Executive Director for Hawai`i Division of Consumer Advocacy (No PPT available)
Dr. Charles L. Morgan, Environmental Planner, Planning Solutions, Inc.
State Representative Mina Morita, Chair of the Hawai`i House Committee on Energy and Environment
Theodore Peck, Manager-Energy Planning & Policy Branch, Hawai`i Dept of Business, Economic Dev't & Tourism
Additional Resources and Links
"Obstacles in Hawai`i Laws to Implementation of Energy Efficiency and Renewable Resources - A Review of Hawai`i's State and County Laws" Prepared for the Hawaii Energy Policy Forum by Carl Freedman of Haiku Design & Analysis, December 28, 2007
Panel 3:
Paul Bierman-Lytle, Principal & Chief Sustainability Officer, Group 70 International(Part 1 (Slides 1-15), Part 2 (Slides 16-31))
Miles Kubo, President, Energy Industries
Ray Mierta, Manager-Energy Services, Kaua`i Island Utility Cooperative
Douglas Sears, General Manager, Grand Hyatt Kaua`i Resort & Spa
Day Two, Tuesday, September 9, 2008
Morning Keynote Jennifer Goto Sabas, Chief of Staff for U.S. Senator Daniel K. Inouye (No PPT available)
Panel 1:
Pete Cooper, Global Development, Better Place
Jon Hurwitch, Executive Vice President—New & Diversified Business, Sentech Inc. (Part 1 (Slides 1-21), Part 2 (Slides 22-42))
Bruce Norman, General Manager—Controls Product Management, GE Energy
Scott Thigpen, Senior Associate, Booz Allen Hamilton
Summary of Findings Session
Conducted by Maurice Kaya and Bill Parks (No PPT available) (Video and summary TBA)
Luncheon Keynote
State Senator Gary L. Hooser, Hawai`i Senate Majority Leaders and Vice Chair of the State Senate Committee on Energy & Environment (no PPT available)
Why was there the Recent Run-Up and Down of Oil Prices?
The prior post here shows the graphs of what happened to oil prices over the past year. The question arises, "Why was there that run-up in price, and how did it happen?" The best article I have read on it is the following article. Basically the article characterizes what happened as a speculative run-up that was attempted by market makers to try to offset their 'mark to market' unrealized paper losses from mortgage derivatives and postpone the results from that...what the markets are now dealing with:
http://artvoice.com/issues/v7n40/crude
Cover Story
"Crude"
by Jed Morey
"Or, How Wall Street investment banks manipulated oil prices to try to save their hides, screwing American consumers and the rest of the world and breaking the economy anyway"
"To John Mack, it must seem like just yesterday that he received a $40 million bonus as chairman and CEO of Morgan Stanley, the largest bonus ever given on Wall Street at the time. That was at the end of 2006, a lifetime ago in the financial world, and things are much different now. Continued fallout from the credit crisis has forced Morgan into a corner and its chairman against a wall. It could be worse. Mack could have run Merrill Lynch, Lehman Brothers, or Bear Stearns.
Luckily, Mack is an oil man, in every sense of the word. Under Mack, Morgan Stanley has amassed a formidable group of companies involved in every aspect of the petroleum business, from refineries to home heating oil.
By exploiting regulatory loopholes and throwing caution and conscience to the wind, Morgan Stanley, along with Goldman Sachs, has artificially thrust oil prices to record levels. Mack has thus far been able to navigate through a storm that has brought three of the biggest American investment banks to their knees. And the whole world picked up the tab.
They don’t call him “Mack the Knife” for nothing.
There will be blood
One of the greatest economic disasters in modern history is unfolding before our eyes, but the runup spans 16 years and three presidents and has left millions of starving and poverty-stricken people in its wake.
Economists and theorists have already named the economic period that is ending as of this writing: It was the era of cheap oil, a time when multinational companies thrived on the global market as never before. Things have changed now: Oil prices are high and the cost of doing business, in every industry, continues to rise. Oil may never be cheap again; answers and inconsistencies abound as to why.
Before 2000, there were a few givens that affected the cost of oil and energy in the world—mainly war, weather, supply, and demand. The latest Russian aggression in Georgia, hurricanes in the Gulf, and the spectacular display at the Beijing Olympics that placed China on the world stage would normally have put prices through the roof. If nothing else, China’s grand coming-out party exhibited the largesse of the Chinese economy and population. This alone should have caused a spike in oil prices. Instead, they fell from the summer’s earlier stunning highs.
This counterintuitive behavior in the market suggests some other significant determinant of oil prices at work, beyond traditional forces of supply and demand.
In stark opposition to the oil crisis of the 1970s, which left Washington in a state of panic and Americans lined up at the gas pumps, the seeds of the current condition may well have been planted not in the Middle East by the OPEC nations but right here at home, by the same lawmakers now scrambling to undo what they set in motion.
One of the central villains in the story has become an all-too-familiar symbol of corporate malfeasance. The ghosts of Enron, the defunct Texas-based energy company, and its now-deceased former president, Kenneth Lay, still haunt the market today. Most are familiar with how Enron preyed on financial loopholes in the marketplace to fabricate a phantom energy market and create false gains on its balance sheet throughout the 1990s. Enron’s grip on the energy market created spastic and turbulent movement in the marketplace, resulting in events like California’s rolling blackouts in 2000. By December 2001, when everything had unraveled, Enron was out of business, its accounting firm, Arthur Andersen, was no more, and Washington lawmakers issued a slew of promises to change the regulatory environment.
Devils in the details
During the final months of Bush 41’s White House in 1992, Wendy Lee Gramm, wife of Phil Gramm, who was then the Republican senator from Texas, was the head of the US Commodities Futures Trading Commission (CFTC). Wendy Gramm is an unabashed free-market advocate once described in 1999 by the Wall Street Journal as the “Margaret Thatcher of financial regulation.” She now sits as a distinguished senior scholar of the conservative think tank Mercatus Center at George Mason University in Virginia. Mercatus is a policy center on Capitol Hill that boasts board members such as Ed Meese—a central figure in the Iran-Contra scandal as attorney general under President Ronald Reagan—and Charles Koch, of Koch Industries, who has been investigated for stealing oil from federal property and tribal Indian lands, indicted for environmental crimes, and fined $30 million by the Environmental Protection Agency for numerous spills throughout the United States.
The CFTC oversees the commodities market and applies the regulations set forth under the 1936 Commodities Exchange Act (CEA), a measure enacted by Congress to prevent another collapse on the scale of the 1929 crash. One of Wendy Gramm’s final acts as chairwoman in January 1993 was to create an exemption that allowed Enron to trade energy futures contracts and essentially hide these trades from the CFTC itself. (An energy futures contract is an agreement to deliver energy commodities such as oil or natural gas at a set price in the future.)
Gramm left the CFTC, and five weeks after creating this exemption, she became a board member of Enron. In return for her work deregulating the market for Enron to exploit, she racked up millions as an Enron board member prior to the company’s collapse.
Wendy and Phil Gramm were just getting warmed up.
At the end of President Bill Clinton’s second term and the waning days of the 106th Congress, it was then-Senator Phil Gramm’s turn to dust off a bill, now commonly referred to as the “Enron loophole,” and attach it to an 11,000-page appropriations bill on December 15, 2000. The bill had previously died on the House floor, but Gramm resurrected it, found a new sponsor, became a co-sponsor, changed the bill number, and turned it into an amendment. That’s a lot of work for one little loophole. As a rider to a much larger bill, the Commodities Futures Modernization Act was no longer subject to the normal vetting process in Congress that a stand-alone bill would receive. Lawmakers, undoubtedly feeling the pressure of the holidays and lacking the time to review thoroughly the voluminous document, quickly approved the bill for the president’s signature.
On December 21, 2000, on a cold and blustery Washington evening, Clinton signed the bill with the Enron loophole rider. Gramm’s amendment deregulated all energy futures trading. For Lay and Enron, the rest is history. But it would take another six years, another President Bush, and a new Congress to open the floodgates of rampant speculation and really give it legs.
Phil Gramm, you might recall, was until recently Senator John McCain’s top economic adviser. You know, the one who called America “a nation of whiners.”
Commodities explained
The easiest way to think about commodities is that they are things—physical things that can be measured in size, quantity, or volume: fruit, oil, grains, metals, currency. All have unique characteristics and trade against one another on commodities exchanges throughout the world. For example, one barrel of oil might equal three bushels of corn, which may equal six bushels of wheat, and so on.
It is a complicated system and not for the faint of heart. Few traders on Wall Street have the acumen and desire to deal in this sector, an exchange that had been efficiently regulated by the CEA since 1936. Commodities traders were highly specialized in their fields and their discipline was so narrow that it was largely misunderstood. Michael Greenberger, an outspoken critic and former employee of the CFTC, described these as “backwater markets,” but ones that recently have become “as important to understand and regulate as the securities and debt markets are.”
An important aspect to the commodities market is that there has always been a ceiling to the transactions, and every investment made in the US, for example, must be overseen by the CFTC. This market cap and theoretical transparency kept the commodities market in relative obscurity against its much bigger counterparts, the stock market and the bond market.
But in January 2006, the CFTC, under President George W. Bush’s administration, upended the regulatory practices held in place since the 1930s and created a virtual frenzy by recognizing a new commodities exchange—ICE Futures—that had been formed in 2001, primarily by investment banks and oil companies.
On May 20 of this year, Michael Masters, the managing member of Masters Capital Management LLC, a hedge fund that invests in private equity, testified before the Senate’s Committee on Homeland Security and Governmental Affairs. His testimony is now widely quoted by the antispeculation critics who decry the lack of oversight created by the Enron loophole.
“Commodities futures markets are much smaller than the capital markets, so multibillion-dollar allocations to commodities markets will have a far greater impact on prices,” Masters stated.
Essentially, introducing investment banks and hedge funds that have deep pockets and no one looking over their shoulders has the singular ability to move the entire market. It’s like allowing professional athletes to compete in the Olympics. Masters called it “demand shock.”
Morgan Stanley and Goldman Sachs: the mechanics behind high oil prices
Two primary tools have restrained zealous speculators in the commodities markets since the CEA’s adoption: transparency and position limits. The transparency came from federally regulated markets like the New York Mercantile Exchange (NYMEX), which tracks and oversees the transactions of commodities. Position limits were enacted under the CEA to keep any one investor, or group of investors, from overwhelming the exchange and flooding it with money. The Enron loophole essentially permitted the trading of energy futures on over-the-counter markets, thereby allowing a new set of investors—hedge funds and investment banks—to trade energy futures. But the US exchanges still saw relatively little activity as compared to their European counterparts, where the oversight was far more lax. Because commodities trade in real time and US-based companies have the most money to invest, the investment banks and hedge funds were still slow to drive great sums of capital into the market. What they needed to really make this thing soar was the ability to invest serious capital within the United States, like their counterparts could on the London Exchange, for example.
In 2000, Goldman Sachs, Morgan Stanley, and British Petroleum became the primary founders of a little-known exchange based in Atlanta, known as the Intercontinental Exchange (ICE). A year later, it purchased the London-based International Petroleum Exchange (IPE), and was renamed ICE Futures. It was an acquisition that was fairly straightforward until 2006, when the CFTC—seemingly out of nowhere—officially recognized the ICE as a foreign-based exchange because it had purchased the IPE.
Even though the ICE is based in Atlanta, backed by US banks, and now traded publicly on the New York Stock Exchange, the CFTC somehow decided to treat it as if it were based in London and thereby no longer subject to federal trading regulations. Now the investment banks could trade every type of commodity, especially crude oil, without any spending limits or federal oversight. Greenberger calls it one of Wall Street’s “most successful ventures,” because the ICE was now “competitive to NYMEX.”
It was here that the wheels began to fall off the commodities market.
Mack’s Morgan
John Mack, the chairman and CEO of Morgan Stanley, has had an illustrious career, holding some of the most lucrative and prestigious positions on Wall Street.
Nicknamed “Mack the Knife” because of his hard-edged, no-nonsense approach and hardcore cost-cutting measures, Mack ran Morgan Stanley through the 1990s before accepting the job as co-CEO of Credit Suisse First Boston, a leading investment bank, in 2001. Mack left CSFB in 2004 to pursue options outside the large investment banking world but was wooed back to run Morgan Stanley in 2005. Upon his return, Mack’s Morgan Stanley went on an aggressive oil-buying spree—but not necessarily the kind you might expect.
On May 24, 2006, Morgan oil analyst Douglas Terreson announced that integrated oil equities were “15 percent undervalued,” and in a research report he wrote that “Independent refining and marketing remains the largest sector bet in the global model energy portfolio.” Soon after, on June 18, 2006, Morgan Stanley acquired TransMontaigne, Inc. and its subsidiaries—a half-billion dollar group of companies operating in the refined petroleum business.
How convenient: After their oil analyst decided that this portion of the industry was looking up, Morgan Stanley got into the oil business and bought a refining company. It must have taken more than 25 days to conceive and work out the TransMontaigne transaction. This had to have been a long-planned, well-thought-out takeover—one that worked for the great benefit of Morgan Stanley’s future oil plans.
This type of freewheeling environment, with little separation between the proprietary desks at the banks and their investment analysts, has been the subject of much scrutiny and concern of late.
“[There must be] a verifiable and hardened wall between analysts and the investment entities,” Greenberger says—it’s the only way to maintain integrity. But the CFTC was essentially dismantling that wall, right under everyone’s noses.
Morgan’s investments in the oil business continued aggressively into the far corners of the industry over the next year. In short order it closed the circle of the supply chain by acquiring Heidmar, a shipping company, and various stakes in foreign-based energy supply companies. It even snagged a contract from the US Department of Energy to store 750,000 barrels of home heating oil at its corporately owned terminal in New Haven, Connecticut. Morgan Stanley, which was at the time the largest trader in oil futures, was now a serious international oil company.
Speculation takes center stage
The Masters testimony brought speculation into the light and sent shockwaves through the halls of Congress. Masters was able to simplify the exchange and put the issues in a context that lawmakers could grasp. One of the telling examples he gave was that “Index speculators [companies such as Morgan Stanley] have now stockpiled, via the futures market, the equivalent of 1.1 billion barrels of petroleum, effectively adding eight times as much oil to their own stockpile as the United States has added to the Strategic Petroleum Reserve over the last five years.”
This belies the claims made by investment banks that demand from China and India was solely responsible for the increase in oil futures prices. However, there are some theorists who still vehemently deny that this is the case.
James Howard Kunstler, author of The Long Emergency and creator of the popular blog Clusterfuck Nation, believes that the effect from the speculative market is “basically witch-hunt stuff.” A peak oil theorist, Kunstler, on the phone from his home in Saratoga Springs, says he believes that the root of the problem lies in our global dependence upon a commodity that is quite simply disappearing.
American scientist M. King Hubbert predicted in the 1950s that American oil production would peak by the early 1970s. His predictive model was the basis for peak oil theory, which, when applied to the global market, indicates that the world may hit peak oil production within the next 20 years or sooner. Kunstler says that “the biggest thing that’s going on right now is the oil export problem or crisis.
“What that means,” he adds, “is the countries that we depend on for imported oil are less and less able to send it out and they’re using more of their own oil even as they’re in depletion. Two of the biggest cases of this are Mexico and Venezuela.”
While America imports the vast majority of its oil from Mexico, Venezuela, and Canada—not the Middle East—and there is evidence to support the peak oil predictions in some of these areas, it seems to speak more to the long-term crisis that mature and developing countries face. But it doesn’t fully explain away why oil prices would increase exponentially during the summer months and then decline shortly thereafter.
“Instead of oil going up,” Greenberger says, “oil is going down. Has India and China dramatically cut back? Nothing has changed and, in fact, the supply-demand factor has probably gotten worse because of Russia’s aggression [and] the severe weather, but oil is sinking, sinking, sinking. How can that possibly be?”
So if oil prices could be so easily manipulated, why didn’t it happen more severely and immediately when restrictions were lifted in 2006? While oil prices did indeed climb between the time the ICE was created in Atlanta and the regulations were lifted in January of 2006, they didn’t skyrocket until late in 2007.
Enter Douglas Terreson.
The Terreson timeline
Terreson, the Morgan Stanley analyst who said that independent refining and marketing companies were undervalued, was the bank’s chief oil analyst. The award-winning, nationally recognized Terreson had fielded questions in relation to oil prices and futures since the mid 1990s. On March 14 of this year, he said that oil would settle in at around $95 per barrel for the remainder of 2008. Moreover, Terreson also concluded that oil would retreat to around $83 per barrel for 2009.
That would be Terreson’s last forecast for Morgan Stanley.
Two short months later, Dow Jones Newswires reported that Terreson had been ousted in a round of layoffs. Two weeks after that, Richard Berner, Morgan Stanley co-head of global economics and chief US economist, issued a statement saying that crude oil could easily reach $150 a barrel. This prediction set off a round of speculative fervor never before seen in the market. Goldman Sachs immediately followed suit by forecasting oil to roar beyond $150, saying it could hit $200 a barrel in the near future. Oil prices were off to the races, with the investment banks in full lobbying mode while pointing the finger at China and India.
On September 19, 2007, Morgan Stanley’s stock price was $67 and oil was at $78. This was the day that Morgan Stanley began to trickle out the bad news. The worse the news coming out of the investment banks, the higher oil prices would climb. By the time Morgan announced that Terreson was gone, Morgan’s stock was at $41 and oil was at $134.
In retrospect, the turning point appears to be Morgan’s $150 forecast by Berner. It fueled the apprehension of the media and Wall Street alike. Americans were quick to do the math and knew that the spike would mean $5 per gallon at the pump. Maybe more. Suddenly everyone recalled the 1970s, and new terms such as “stay-cation” were on everyone’s lips.
So, where did this $150 number come from? Who better to answer that question than Richard Berner, the man behind the prediction?
Unfortunately, a spokesperson for Morgan Stanley tells the press that Richard Berner “doesn’t do interviews on oil stuff.” In fact, “he doesn’t deal in oil” at all, says his assistant matter-of-factly. That’s because for more than a decade this had been the exclusive domain of Terreson.
A month after the report that Terreson had been laid off, Morgan Stanley issued a statement claiming that Terreson voluntarily had left his position at Morgan for the promise of higher pay from a hedge fund.
Not so, according to a Morgan Stanley employee familiar with the circumstances surrounding Terreson’s departure, who asked not to be identified in this story. Taken aback by the confusion surrounding Terreson’s reason for leaving, he says, “I knew they had a rightsizing, but he said he was retiring. He was getting ready to head off into the sunset.”
Morgan Stanley no longer has a spokesperson for oil. Nor are they willing to comment on the decision to forecast crude oil futures at $150 per barrel by someone who “doesn’t deal in oil.” Terreson, once an integral part of the Houston community and a rising star in the financial sector, seems to have disappeared from the city altogether. His home phone has been disconnected. His former co-workers are unsure of his whereabouts. And almost no one from the firm at which he spent years as a superstar in his field wants to discuss why.
When the press finally reached Terreson at his present residence in Alabama, he simply said, “I’m retired. I’m not with Morgan anymore and can’t talk about any of this.” When asked for a brief comment on current oil prices, Terreson responded, “I don’t feel comfortable talking about it,” and hung up the phone.
The smell coming our way
Still, the question persists: If the market conditions surrounding the price of crude oil futures remained unchanged, why were the analysts at the world’s largest banks determined to drive up the price of oil at a historic pace?
Was it merely dumb luck that this rampant speculation occurred at a time when the major investment banks were reporting record losses and write-downs due to the sub-prime mortgage meltdown? It is Greenberger’s assertion that “a lot of people were very upset that they were in a sense humping their own product—not only their physical holdings but their future holdings.”
What he’s referring to is the fact that Morgan Stanley doesn’t just trade oil futures; it’s also very much in the business of oil. This fact is “unseemly,” according to Greenberger and other observers of the financial markets.
One such observer is Gary Aguirre, a former staff lawyer and investigator for the Securities and Exchange Commission (SEC), who has testified several times in front of Congress and is considered a leading authority on financial markets.
“The way it ran up had all the earmarks of manipulation,” says Aguirre from his office in San Diego. “It looked like somebody was playing a game. I don’t know what the game was or how they did it but that was…the smell drifting my way.”
As far as Morgan Stanley and Mack are concerned, Aguirre knows firsthand just how powerful the Wall Street tycoon is.
In 2005, Aguirre headed an investigation into an insider trading claim involving Mack and a hedge fund named Pequot Capital Management. Mack’s involvement came during the period between his tenure at Credit Suisse First Boston and his return as chairman of Morgan Stanley.
There were allegations of insider trading on the part of Mack by the SEC, but just when the investigation seemed to be gaining momentum, Aguirre was told to back off by his bosses at the SEC. After a glowing review from his superior, Aguirre went on vacation. When he returned, he got a pink slip, not a raise.
Aguirre insists that his own experience is merely part of a larger and much scarier problem running rampant on Wall Street.
“What we have are the markets highly leveraged, highly speculative and without any regulation, effectively, of the abuses,” he explains. “In short, it’s not much different than it was just before the crash in 1929.” This sentiment is echoed throughout Wall Street and the Beltway as the news from Wall Street grows more desperate with each piece of bad press about the economy.
The cozy relationship between oil companies and the US government is nothing new to people like Aguirre who are familiar with the system. Aguirre explains the “you scratch my back” culture in monetary terms by saying, “These people are sponsored by the industry. Paulson’s straight out of Goldman. We have the fox guarding the henhouse.” (He’s referring to US Treasury Secretary Henry Paulson, who was chairman of Goldman Sachs until June 2006.)
This was certainly true for Wendy Gramm, leaving the CFTC for the Enron board, and for her husband, who received nearly $100,000 in financial contributions from Enron while in office.
“These Enron traders were highly sought after,” says Greenberger. “Enron showed in its dying days how you could make a lot of money trading unregulated energy futures products.”
The fallout
By jacking up oil prices, these banks may have temporarily staved off the collapse of our financial system. Skyrocketing oil prices have also highlighted our complete dependence and addiction to oil and brought the debate to the surface in the upcoming presidential election. For better or for worse, people are talking about oil, and not in favorable terms.
When Terreson’s oil price forecast was less than what Richard Berner believed it should be, his career at Morgan Stanley ended abruptly. When Berner predicted $150 oil, the entire world market responded to this claim. Did Terreson tire of shilling for Morgan and decide to retire at the tender age of 46? Or was he unceremoniously axed after refusing to alter his forecast on oil prices? Was he part of the game all along and paid handsomely to ride off into the sunset, as one co-worker said?
Regardless of the reasons behind Terreson’s departure, there is still the question of motive: Why drive oil prices beyond practical limits?
Let’s say for a moment that you run Morgan Stanley. Over the past few years you made a couple of bad deals. Okay, so it was more than a couple, but not as many as your friends at Bear Stearns and Lehman Brothers. Thankfully, you have remarkable control over the price of oil—just by forecasting it. Heck, you don’t even have to “deal in oil” or do interviews “on oil stuff,” you just have to pick a number and watch the market try to hit it. Not to mention you also own companies that operate refineries. You control shipping routes. The government has handed you a contract to store 750,000 barrels of home heating oil for the Northeast United States. You founded and are still an owner in a public exchange that handles energy trades that no one can really see. Win. Win. Win.
It was all legal. The federal government, beginning with Wendy and Phil Gramm, cleared the way for tremendous systematic abuse in the financial markets to fatten the Gramm family bank account with blood money—Wendy Gramm’s multimillion-dollar take as an Enron board member and Phil Gramm raking in more than $335,000 in campaign contributions from the securities and investment industries.
Instead of being punished for these now well-documented actions, Wendy Gramm is still influencing Capitol Hill at the Mercatus Center and Phil Gramm has been advising McCain, the man who might be our next president.
People are beginning to contemplate peak oil and imagine that, while the world may have flattened out for a while, it’s getting a whole lot rounder again. Kunstler proclaims, “Globalism was a product of a certain time and place and special circumstances, namely, a period of very cheap oil and relative peace between the great powers.” It’s what he calls the “end of the happy motoring era.”
The “demand shock” that Masters speaks of also created a hunger shock that reverberated around the globe. It’s awfully easy to manipulate the markets when you control so many pieces of the puzzle. Perhaps the analysts and speculators were acting to save their own banks in the short run, lest they wind up like Bear Stearns or Lehman Brothers. But does saving a bank and focusing our daily discussions on renewable technology really excuse thrusting millions of people into poverty and pushing price increases on the global food markets?
Congress has the ability to seize control of these markets even before the upcoming presidential election. The new president will decide whether and where we drill or not, but that decision has nothing to do with restoring the oversight and stability that existed in the commodities arena from 1936 until 2006. If it weren’t for federal oversight and regulation, Morgan Stanley—which was created in 1935 from the ashes of the 1929 crash—wouldn’t even exist. But history is readily forgotten, or ignored, by greedy corporate raiders who are destined to repeat it."
What I find amazing is that for this type of gamesmanship we no longer have an Aloha Airlines in Hawaii, and now nothing to show for it.
Aloha, Brad
http://artvoice.com/issues/v7n40/crude
Cover Story
"Crude"
by Jed Morey
"Or, How Wall Street investment banks manipulated oil prices to try to save their hides, screwing American consumers and the rest of the world and breaking the economy anyway"
"To John Mack, it must seem like just yesterday that he received a $40 million bonus as chairman and CEO of Morgan Stanley, the largest bonus ever given on Wall Street at the time. That was at the end of 2006, a lifetime ago in the financial world, and things are much different now. Continued fallout from the credit crisis has forced Morgan into a corner and its chairman against a wall. It could be worse. Mack could have run Merrill Lynch, Lehman Brothers, or Bear Stearns.
Luckily, Mack is an oil man, in every sense of the word. Under Mack, Morgan Stanley has amassed a formidable group of companies involved in every aspect of the petroleum business, from refineries to home heating oil.
By exploiting regulatory loopholes and throwing caution and conscience to the wind, Morgan Stanley, along with Goldman Sachs, has artificially thrust oil prices to record levels. Mack has thus far been able to navigate through a storm that has brought three of the biggest American investment banks to their knees. And the whole world picked up the tab.
They don’t call him “Mack the Knife” for nothing.
There will be blood
One of the greatest economic disasters in modern history is unfolding before our eyes, but the runup spans 16 years and three presidents and has left millions of starving and poverty-stricken people in its wake.
Economists and theorists have already named the economic period that is ending as of this writing: It was the era of cheap oil, a time when multinational companies thrived on the global market as never before. Things have changed now: Oil prices are high and the cost of doing business, in every industry, continues to rise. Oil may never be cheap again; answers and inconsistencies abound as to why.
Before 2000, there were a few givens that affected the cost of oil and energy in the world—mainly war, weather, supply, and demand. The latest Russian aggression in Georgia, hurricanes in the Gulf, and the spectacular display at the Beijing Olympics that placed China on the world stage would normally have put prices through the roof. If nothing else, China’s grand coming-out party exhibited the largesse of the Chinese economy and population. This alone should have caused a spike in oil prices. Instead, they fell from the summer’s earlier stunning highs.
This counterintuitive behavior in the market suggests some other significant determinant of oil prices at work, beyond traditional forces of supply and demand.
In stark opposition to the oil crisis of the 1970s, which left Washington in a state of panic and Americans lined up at the gas pumps, the seeds of the current condition may well have been planted not in the Middle East by the OPEC nations but right here at home, by the same lawmakers now scrambling to undo what they set in motion.
One of the central villains in the story has become an all-too-familiar symbol of corporate malfeasance. The ghosts of Enron, the defunct Texas-based energy company, and its now-deceased former president, Kenneth Lay, still haunt the market today. Most are familiar with how Enron preyed on financial loopholes in the marketplace to fabricate a phantom energy market and create false gains on its balance sheet throughout the 1990s. Enron’s grip on the energy market created spastic and turbulent movement in the marketplace, resulting in events like California’s rolling blackouts in 2000. By December 2001, when everything had unraveled, Enron was out of business, its accounting firm, Arthur Andersen, was no more, and Washington lawmakers issued a slew of promises to change the regulatory environment.
Devils in the details
During the final months of Bush 41’s White House in 1992, Wendy Lee Gramm, wife of Phil Gramm, who was then the Republican senator from Texas, was the head of the US Commodities Futures Trading Commission (CFTC). Wendy Gramm is an unabashed free-market advocate once described in 1999 by the Wall Street Journal as the “Margaret Thatcher of financial regulation.” She now sits as a distinguished senior scholar of the conservative think tank Mercatus Center at George Mason University in Virginia. Mercatus is a policy center on Capitol Hill that boasts board members such as Ed Meese—a central figure in the Iran-Contra scandal as attorney general under President Ronald Reagan—and Charles Koch, of Koch Industries, who has been investigated for stealing oil from federal property and tribal Indian lands, indicted for environmental crimes, and fined $30 million by the Environmental Protection Agency for numerous spills throughout the United States.
The CFTC oversees the commodities market and applies the regulations set forth under the 1936 Commodities Exchange Act (CEA), a measure enacted by Congress to prevent another collapse on the scale of the 1929 crash. One of Wendy Gramm’s final acts as chairwoman in January 1993 was to create an exemption that allowed Enron to trade energy futures contracts and essentially hide these trades from the CFTC itself. (An energy futures contract is an agreement to deliver energy commodities such as oil or natural gas at a set price in the future.)
Gramm left the CFTC, and five weeks after creating this exemption, she became a board member of Enron. In return for her work deregulating the market for Enron to exploit, she racked up millions as an Enron board member prior to the company’s collapse.
Wendy and Phil Gramm were just getting warmed up.
At the end of President Bill Clinton’s second term and the waning days of the 106th Congress, it was then-Senator Phil Gramm’s turn to dust off a bill, now commonly referred to as the “Enron loophole,” and attach it to an 11,000-page appropriations bill on December 15, 2000. The bill had previously died on the House floor, but Gramm resurrected it, found a new sponsor, became a co-sponsor, changed the bill number, and turned it into an amendment. That’s a lot of work for one little loophole. As a rider to a much larger bill, the Commodities Futures Modernization Act was no longer subject to the normal vetting process in Congress that a stand-alone bill would receive. Lawmakers, undoubtedly feeling the pressure of the holidays and lacking the time to review thoroughly the voluminous document, quickly approved the bill for the president’s signature.
On December 21, 2000, on a cold and blustery Washington evening, Clinton signed the bill with the Enron loophole rider. Gramm’s amendment deregulated all energy futures trading. For Lay and Enron, the rest is history. But it would take another six years, another President Bush, and a new Congress to open the floodgates of rampant speculation and really give it legs.
Phil Gramm, you might recall, was until recently Senator John McCain’s top economic adviser. You know, the one who called America “a nation of whiners.”
Commodities explained
The easiest way to think about commodities is that they are things—physical things that can be measured in size, quantity, or volume: fruit, oil, grains, metals, currency. All have unique characteristics and trade against one another on commodities exchanges throughout the world. For example, one barrel of oil might equal three bushels of corn, which may equal six bushels of wheat, and so on.
It is a complicated system and not for the faint of heart. Few traders on Wall Street have the acumen and desire to deal in this sector, an exchange that had been efficiently regulated by the CEA since 1936. Commodities traders were highly specialized in their fields and their discipline was so narrow that it was largely misunderstood. Michael Greenberger, an outspoken critic and former employee of the CFTC, described these as “backwater markets,” but ones that recently have become “as important to understand and regulate as the securities and debt markets are.”
An important aspect to the commodities market is that there has always been a ceiling to the transactions, and every investment made in the US, for example, must be overseen by the CFTC. This market cap and theoretical transparency kept the commodities market in relative obscurity against its much bigger counterparts, the stock market and the bond market.
But in January 2006, the CFTC, under President George W. Bush’s administration, upended the regulatory practices held in place since the 1930s and created a virtual frenzy by recognizing a new commodities exchange—ICE Futures—that had been formed in 2001, primarily by investment banks and oil companies.
On May 20 of this year, Michael Masters, the managing member of Masters Capital Management LLC, a hedge fund that invests in private equity, testified before the Senate’s Committee on Homeland Security and Governmental Affairs. His testimony is now widely quoted by the antispeculation critics who decry the lack of oversight created by the Enron loophole.
“Commodities futures markets are much smaller than the capital markets, so multibillion-dollar allocations to commodities markets will have a far greater impact on prices,” Masters stated.
Essentially, introducing investment banks and hedge funds that have deep pockets and no one looking over their shoulders has the singular ability to move the entire market. It’s like allowing professional athletes to compete in the Olympics. Masters called it “demand shock.”
Morgan Stanley and Goldman Sachs: the mechanics behind high oil prices
Two primary tools have restrained zealous speculators in the commodities markets since the CEA’s adoption: transparency and position limits. The transparency came from federally regulated markets like the New York Mercantile Exchange (NYMEX), which tracks and oversees the transactions of commodities. Position limits were enacted under the CEA to keep any one investor, or group of investors, from overwhelming the exchange and flooding it with money. The Enron loophole essentially permitted the trading of energy futures on over-the-counter markets, thereby allowing a new set of investors—hedge funds and investment banks—to trade energy futures. But the US exchanges still saw relatively little activity as compared to their European counterparts, where the oversight was far more lax. Because commodities trade in real time and US-based companies have the most money to invest, the investment banks and hedge funds were still slow to drive great sums of capital into the market. What they needed to really make this thing soar was the ability to invest serious capital within the United States, like their counterparts could on the London Exchange, for example.
In 2000, Goldman Sachs, Morgan Stanley, and British Petroleum became the primary founders of a little-known exchange based in Atlanta, known as the Intercontinental Exchange (ICE). A year later, it purchased the London-based International Petroleum Exchange (IPE), and was renamed ICE Futures. It was an acquisition that was fairly straightforward until 2006, when the CFTC—seemingly out of nowhere—officially recognized the ICE as a foreign-based exchange because it had purchased the IPE.
Even though the ICE is based in Atlanta, backed by US banks, and now traded publicly on the New York Stock Exchange, the CFTC somehow decided to treat it as if it were based in London and thereby no longer subject to federal trading regulations. Now the investment banks could trade every type of commodity, especially crude oil, without any spending limits or federal oversight. Greenberger calls it one of Wall Street’s “most successful ventures,” because the ICE was now “competitive to NYMEX.”
It was here that the wheels began to fall off the commodities market.
Mack’s Morgan
John Mack, the chairman and CEO of Morgan Stanley, has had an illustrious career, holding some of the most lucrative and prestigious positions on Wall Street.
Nicknamed “Mack the Knife” because of his hard-edged, no-nonsense approach and hardcore cost-cutting measures, Mack ran Morgan Stanley through the 1990s before accepting the job as co-CEO of Credit Suisse First Boston, a leading investment bank, in 2001. Mack left CSFB in 2004 to pursue options outside the large investment banking world but was wooed back to run Morgan Stanley in 2005. Upon his return, Mack’s Morgan Stanley went on an aggressive oil-buying spree—but not necessarily the kind you might expect.
On May 24, 2006, Morgan oil analyst Douglas Terreson announced that integrated oil equities were “15 percent undervalued,” and in a research report he wrote that “Independent refining and marketing remains the largest sector bet in the global model energy portfolio.” Soon after, on June 18, 2006, Morgan Stanley acquired TransMontaigne, Inc. and its subsidiaries—a half-billion dollar group of companies operating in the refined petroleum business.
How convenient: After their oil analyst decided that this portion of the industry was looking up, Morgan Stanley got into the oil business and bought a refining company. It must have taken more than 25 days to conceive and work out the TransMontaigne transaction. This had to have been a long-planned, well-thought-out takeover—one that worked for the great benefit of Morgan Stanley’s future oil plans.
This type of freewheeling environment, with little separation between the proprietary desks at the banks and their investment analysts, has been the subject of much scrutiny and concern of late.
“[There must be] a verifiable and hardened wall between analysts and the investment entities,” Greenberger says—it’s the only way to maintain integrity. But the CFTC was essentially dismantling that wall, right under everyone’s noses.
Morgan’s investments in the oil business continued aggressively into the far corners of the industry over the next year. In short order it closed the circle of the supply chain by acquiring Heidmar, a shipping company, and various stakes in foreign-based energy supply companies. It even snagged a contract from the US Department of Energy to store 750,000 barrels of home heating oil at its corporately owned terminal in New Haven, Connecticut. Morgan Stanley, which was at the time the largest trader in oil futures, was now a serious international oil company.
Speculation takes center stage
The Masters testimony brought speculation into the light and sent shockwaves through the halls of Congress. Masters was able to simplify the exchange and put the issues in a context that lawmakers could grasp. One of the telling examples he gave was that “Index speculators [companies such as Morgan Stanley] have now stockpiled, via the futures market, the equivalent of 1.1 billion barrels of petroleum, effectively adding eight times as much oil to their own stockpile as the United States has added to the Strategic Petroleum Reserve over the last five years.”
This belies the claims made by investment banks that demand from China and India was solely responsible for the increase in oil futures prices. However, there are some theorists who still vehemently deny that this is the case.
James Howard Kunstler, author of The Long Emergency and creator of the popular blog Clusterfuck Nation, believes that the effect from the speculative market is “basically witch-hunt stuff.” A peak oil theorist, Kunstler, on the phone from his home in Saratoga Springs, says he believes that the root of the problem lies in our global dependence upon a commodity that is quite simply disappearing.
American scientist M. King Hubbert predicted in the 1950s that American oil production would peak by the early 1970s. His predictive model was the basis for peak oil theory, which, when applied to the global market, indicates that the world may hit peak oil production within the next 20 years or sooner. Kunstler says that “the biggest thing that’s going on right now is the oil export problem or crisis.
“What that means,” he adds, “is the countries that we depend on for imported oil are less and less able to send it out and they’re using more of their own oil even as they’re in depletion. Two of the biggest cases of this are Mexico and Venezuela.”
While America imports the vast majority of its oil from Mexico, Venezuela, and Canada—not the Middle East—and there is evidence to support the peak oil predictions in some of these areas, it seems to speak more to the long-term crisis that mature and developing countries face. But it doesn’t fully explain away why oil prices would increase exponentially during the summer months and then decline shortly thereafter.
“Instead of oil going up,” Greenberger says, “oil is going down. Has India and China dramatically cut back? Nothing has changed and, in fact, the supply-demand factor has probably gotten worse because of Russia’s aggression [and] the severe weather, but oil is sinking, sinking, sinking. How can that possibly be?”
So if oil prices could be so easily manipulated, why didn’t it happen more severely and immediately when restrictions were lifted in 2006? While oil prices did indeed climb between the time the ICE was created in Atlanta and the regulations were lifted in January of 2006, they didn’t skyrocket until late in 2007.
Enter Douglas Terreson.
The Terreson timeline
Terreson, the Morgan Stanley analyst who said that independent refining and marketing companies were undervalued, was the bank’s chief oil analyst. The award-winning, nationally recognized Terreson had fielded questions in relation to oil prices and futures since the mid 1990s. On March 14 of this year, he said that oil would settle in at around $95 per barrel for the remainder of 2008. Moreover, Terreson also concluded that oil would retreat to around $83 per barrel for 2009.
That would be Terreson’s last forecast for Morgan Stanley.
Two short months later, Dow Jones Newswires reported that Terreson had been ousted in a round of layoffs. Two weeks after that, Richard Berner, Morgan Stanley co-head of global economics and chief US economist, issued a statement saying that crude oil could easily reach $150 a barrel. This prediction set off a round of speculative fervor never before seen in the market. Goldman Sachs immediately followed suit by forecasting oil to roar beyond $150, saying it could hit $200 a barrel in the near future. Oil prices were off to the races, with the investment banks in full lobbying mode while pointing the finger at China and India.
On September 19, 2007, Morgan Stanley’s stock price was $67 and oil was at $78. This was the day that Morgan Stanley began to trickle out the bad news. The worse the news coming out of the investment banks, the higher oil prices would climb. By the time Morgan announced that Terreson was gone, Morgan’s stock was at $41 and oil was at $134.
In retrospect, the turning point appears to be Morgan’s $150 forecast by Berner. It fueled the apprehension of the media and Wall Street alike. Americans were quick to do the math and knew that the spike would mean $5 per gallon at the pump. Maybe more. Suddenly everyone recalled the 1970s, and new terms such as “stay-cation” were on everyone’s lips.
So, where did this $150 number come from? Who better to answer that question than Richard Berner, the man behind the prediction?
Unfortunately, a spokesperson for Morgan Stanley tells the press that Richard Berner “doesn’t do interviews on oil stuff.” In fact, “he doesn’t deal in oil” at all, says his assistant matter-of-factly. That’s because for more than a decade this had been the exclusive domain of Terreson.
A month after the report that Terreson had been laid off, Morgan Stanley issued a statement claiming that Terreson voluntarily had left his position at Morgan for the promise of higher pay from a hedge fund.
Not so, according to a Morgan Stanley employee familiar with the circumstances surrounding Terreson’s departure, who asked not to be identified in this story. Taken aback by the confusion surrounding Terreson’s reason for leaving, he says, “I knew they had a rightsizing, but he said he was retiring. He was getting ready to head off into the sunset.”
Morgan Stanley no longer has a spokesperson for oil. Nor are they willing to comment on the decision to forecast crude oil futures at $150 per barrel by someone who “doesn’t deal in oil.” Terreson, once an integral part of the Houston community and a rising star in the financial sector, seems to have disappeared from the city altogether. His home phone has been disconnected. His former co-workers are unsure of his whereabouts. And almost no one from the firm at which he spent years as a superstar in his field wants to discuss why.
When the press finally reached Terreson at his present residence in Alabama, he simply said, “I’m retired. I’m not with Morgan anymore and can’t talk about any of this.” When asked for a brief comment on current oil prices, Terreson responded, “I don’t feel comfortable talking about it,” and hung up the phone.
The smell coming our way
Still, the question persists: If the market conditions surrounding the price of crude oil futures remained unchanged, why were the analysts at the world’s largest banks determined to drive up the price of oil at a historic pace?
Was it merely dumb luck that this rampant speculation occurred at a time when the major investment banks were reporting record losses and write-downs due to the sub-prime mortgage meltdown? It is Greenberger’s assertion that “a lot of people were very upset that they were in a sense humping their own product—not only their physical holdings but their future holdings.”
What he’s referring to is the fact that Morgan Stanley doesn’t just trade oil futures; it’s also very much in the business of oil. This fact is “unseemly,” according to Greenberger and other observers of the financial markets.
One such observer is Gary Aguirre, a former staff lawyer and investigator for the Securities and Exchange Commission (SEC), who has testified several times in front of Congress and is considered a leading authority on financial markets.
“The way it ran up had all the earmarks of manipulation,” says Aguirre from his office in San Diego. “It looked like somebody was playing a game. I don’t know what the game was or how they did it but that was…the smell drifting my way.”
As far as Morgan Stanley and Mack are concerned, Aguirre knows firsthand just how powerful the Wall Street tycoon is.
In 2005, Aguirre headed an investigation into an insider trading claim involving Mack and a hedge fund named Pequot Capital Management. Mack’s involvement came during the period between his tenure at Credit Suisse First Boston and his return as chairman of Morgan Stanley.
There were allegations of insider trading on the part of Mack by the SEC, but just when the investigation seemed to be gaining momentum, Aguirre was told to back off by his bosses at the SEC. After a glowing review from his superior, Aguirre went on vacation. When he returned, he got a pink slip, not a raise.
Aguirre insists that his own experience is merely part of a larger and much scarier problem running rampant on Wall Street.
“What we have are the markets highly leveraged, highly speculative and without any regulation, effectively, of the abuses,” he explains. “In short, it’s not much different than it was just before the crash in 1929.” This sentiment is echoed throughout Wall Street and the Beltway as the news from Wall Street grows more desperate with each piece of bad press about the economy.
The cozy relationship between oil companies and the US government is nothing new to people like Aguirre who are familiar with the system. Aguirre explains the “you scratch my back” culture in monetary terms by saying, “These people are sponsored by the industry. Paulson’s straight out of Goldman. We have the fox guarding the henhouse.” (He’s referring to US Treasury Secretary Henry Paulson, who was chairman of Goldman Sachs until June 2006.)
This was certainly true for Wendy Gramm, leaving the CFTC for the Enron board, and for her husband, who received nearly $100,000 in financial contributions from Enron while in office.
“These Enron traders were highly sought after,” says Greenberger. “Enron showed in its dying days how you could make a lot of money trading unregulated energy futures products.”
The fallout
By jacking up oil prices, these banks may have temporarily staved off the collapse of our financial system. Skyrocketing oil prices have also highlighted our complete dependence and addiction to oil and brought the debate to the surface in the upcoming presidential election. For better or for worse, people are talking about oil, and not in favorable terms.
When Terreson’s oil price forecast was less than what Richard Berner believed it should be, his career at Morgan Stanley ended abruptly. When Berner predicted $150 oil, the entire world market responded to this claim. Did Terreson tire of shilling for Morgan and decide to retire at the tender age of 46? Or was he unceremoniously axed after refusing to alter his forecast on oil prices? Was he part of the game all along and paid handsomely to ride off into the sunset, as one co-worker said?
Regardless of the reasons behind Terreson’s departure, there is still the question of motive: Why drive oil prices beyond practical limits?
Let’s say for a moment that you run Morgan Stanley. Over the past few years you made a couple of bad deals. Okay, so it was more than a couple, but not as many as your friends at Bear Stearns and Lehman Brothers. Thankfully, you have remarkable control over the price of oil—just by forecasting it. Heck, you don’t even have to “deal in oil” or do interviews “on oil stuff,” you just have to pick a number and watch the market try to hit it. Not to mention you also own companies that operate refineries. You control shipping routes. The government has handed you a contract to store 750,000 barrels of home heating oil for the Northeast United States. You founded and are still an owner in a public exchange that handles energy trades that no one can really see. Win. Win. Win.
It was all legal. The federal government, beginning with Wendy and Phil Gramm, cleared the way for tremendous systematic abuse in the financial markets to fatten the Gramm family bank account with blood money—Wendy Gramm’s multimillion-dollar take as an Enron board member and Phil Gramm raking in more than $335,000 in campaign contributions from the securities and investment industries.
Instead of being punished for these now well-documented actions, Wendy Gramm is still influencing Capitol Hill at the Mercatus Center and Phil Gramm has been advising McCain, the man who might be our next president.
People are beginning to contemplate peak oil and imagine that, while the world may have flattened out for a while, it’s getting a whole lot rounder again. Kunstler proclaims, “Globalism was a product of a certain time and place and special circumstances, namely, a period of very cheap oil and relative peace between the great powers.” It’s what he calls the “end of the happy motoring era.”
The “demand shock” that Masters speaks of also created a hunger shock that reverberated around the globe. It’s awfully easy to manipulate the markets when you control so many pieces of the puzzle. Perhaps the analysts and speculators were acting to save their own banks in the short run, lest they wind up like Bear Stearns or Lehman Brothers. But does saving a bank and focusing our daily discussions on renewable technology really excuse thrusting millions of people into poverty and pushing price increases on the global food markets?
Congress has the ability to seize control of these markets even before the upcoming presidential election. The new president will decide whether and where we drill or not, but that decision has nothing to do with restoring the oversight and stability that existed in the commodities arena from 1936 until 2006. If it weren’t for federal oversight and regulation, Morgan Stanley—which was created in 1935 from the ashes of the 1929 crash—wouldn’t even exist. But history is readily forgotten, or ignored, by greedy corporate raiders who are destined to repeat it."
What I find amazing is that for this type of gamesmanship we no longer have an Aloha Airlines in Hawaii, and now nothing to show for it.
Aloha, Brad
Friday, October 17, 2008
KIUC Should Act on Limited Risk Hedging NOW
Editor's Note -- An ABC Video has since come out on Oct. 20, 2008 on these same matters: http://cosmos.bcst.yahoo.com/up/player/popup/index.php?cl=10291122
"By these events [the price of oil falling 50% in 3 months], with total luck Hawaii now has additional time to react to energy events. The outer islands still have to push hard to reduce their dependence upon oil-based energy, as oil prices will go back up again; we now have some breathing room to work with. On Kauai, KIUC needs to act now on the opportunity to begin a hedging strategy that their board and executive officers recently mentioned to the public that they would like to start should prices in the market allow for such a staggered hedging strategy to begin. Well, in the past few weeks, that opportunity at hedging has unexpectedly begun to present itself. It's time to act before that opportunity evaporates away."
Timely reports and video today on oil and energy markets and expectations:
Report on price and OPEC: http://www.cnbc.com/id/27228164
Video on price expectations: http://www.cnbc.com/id/27236547
Here is a good article from yesterday on pitfalls to avoid with fuel hedging, even among companies thought to have expertise on the matter: http://www.chron.com/disp/story.mpl/business/steffy/6063444.html
Aloha, Brad
Energy Efficiency Leadership by Hyatt in Hawaii
A little more than a month ago by chance I met Gary Bulson, Senior Engineer for the Hyatt Regency Maui Resort and Spa, mentioned in the article below. Have also been impressed with the leadership that the Hyatt Regency Kauai has been taking on related matters, particularly with solar and guest available recycling.
I compare this to another hotel here on Kauai that regularly left almost all of it's glass doors open on almost all floors, losing an untold amount of air-conditioning to the open environment. One, it was an incredible expense for the hotel not allocated to individual guests, and two, it was a huge waste of energy. All it would have taken to address is a quality control standard that all employees close any glass doors they saw left open by guests. But that was not done. Maybe it will be done in the future. Anyway, the Hyatt is providing great leadership on these matters throughout the state as with the following example:
http://www.hotelmotel.com/hotelmotel/ArticleStandard/Article/detail/559260
"Hawaiian resort installs Inncom's ecoMODE system"
Oct 16, 2008 H&MM Week In Review
Niantic, Conn.--September 17, 2008--"The Hyatt Regency Maui Resort and Spa has become the first Hyatt property to upgrade its energy-management system with the environmentally-friendly ecoMODE option from Inncom.
Niantic-based Inncom is the global leader in developing, manufacturing and marketing integrated room automation systems for the international hospitality industry. Situated on 40 acres along a three-mile stretch of the Ka’anapali Beach coastline, the Hyatt Regency Maui Resort and Spa features guest suites accentuated with plantation-style wood furniture and Hawaiian elegance, and 100,000 square feet of indoor and outdoor event space.
Inncom's environmentally friendly ecoMODE is a special setting available as an option on all styles of e4 Smart Digital Thermostats, as well as Inncom switches and touch-screen devices. The ecoMODE control system is designed to make “Going Green” a simple process for both hotelier and guests. With a touch of the control’s Green Button, guests activate the thermostat’s enhanced energy-saving mode and thus can choose a host of environmentally correct programs predetermined by the hotel, such as reduced linen changes or bath-amenity replacements.
In the simplest ecoMODE system, pressing the Green Button triggers an enhanced energy-savings setback and illuminates a green LED to indicate the guest’s sustainability-program participation to hotel staff. In a centrally controlled system, this notification is also sent to the central server, instantly alerting appropriate staff members to the guest’s participation, as well as collecting data regarding program involvement.
Gary Bulson, Senior Engineer for the Hyatt Regency Maui Resort and Spa, said his property is the first in the Hyatt chain to adopt the ecoMODE control system, which is especially appropriate given the lush physical environment in which his property is located.ecoMODE is finding favor among guests as well as the hotel’s management, he noted.
“The feature I like best about the system is how it allows our guests to actively participate in choosing to allow a deeper set-back of room temperatures,” Bulson said. Not only is this a key to sustainability in developing a property’s commitment to going green, but it also is a key contributor to saving energy and, in turn, cutting costs property wide—a crucial consideration in an era when energy prices are going through the roof.
“We are very proud of our ecoMODE system,” said Inncom CEO Duane Buckingham. “ecoMODE further enhances Inncom's core energy management system, which has reigned as the leading solution in the worldwide hotel industry’s effort to install systems that are both environmentally friendly and ‘friendly’ to operators looking to dramatically reduce energy costs. ecoMODE is designed for any lodging property that seeks to demonstrate a firm commitment to environmental sustainability practices. We share that commitment with Hyatt Hotels & Resorts and are proud to be partnering with them on the Hyatt Regency Maui Resort and Spa installation.”
Evidence of the ecoMODE system’s impact on the lodging industry’s “Going Green” campaign is the fact that the Inncom product was singled out as the Kenneth F. Hine “Best of Show” award winner at the 92nd Annual International Hotel/Motel & Restaurant Show.
For more information on ecoMODE and other Inncom products, please visit the company Web site at www.inncom.com."
Aloha, Brad
I compare this to another hotel here on Kauai that regularly left almost all of it's glass doors open on almost all floors, losing an untold amount of air-conditioning to the open environment. One, it was an incredible expense for the hotel not allocated to individual guests, and two, it was a huge waste of energy. All it would have taken to address is a quality control standard that all employees close any glass doors they saw left open by guests. But that was not done. Maybe it will be done in the future. Anyway, the Hyatt is providing great leadership on these matters throughout the state as with the following example:
http://www.hotelmotel.com/hotelmotel/ArticleStandard/Article/detail/559260
"Hawaiian resort installs Inncom's ecoMODE system"
Oct 16, 2008 H&MM Week In Review
Niantic, Conn.--September 17, 2008--"The Hyatt Regency Maui Resort and Spa has become the first Hyatt property to upgrade its energy-management system with the environmentally-friendly ecoMODE option from Inncom.
Niantic-based Inncom is the global leader in developing, manufacturing and marketing integrated room automation systems for the international hospitality industry. Situated on 40 acres along a three-mile stretch of the Ka’anapali Beach coastline, the Hyatt Regency Maui Resort and Spa features guest suites accentuated with plantation-style wood furniture and Hawaiian elegance, and 100,000 square feet of indoor and outdoor event space.
Inncom's environmentally friendly ecoMODE is a special setting available as an option on all styles of e4 Smart Digital Thermostats, as well as Inncom switches and touch-screen devices. The ecoMODE control system is designed to make “Going Green” a simple process for both hotelier and guests. With a touch of the control’s Green Button, guests activate the thermostat’s enhanced energy-saving mode and thus can choose a host of environmentally correct programs predetermined by the hotel, such as reduced linen changes or bath-amenity replacements.
In the simplest ecoMODE system, pressing the Green Button triggers an enhanced energy-savings setback and illuminates a green LED to indicate the guest’s sustainability-program participation to hotel staff. In a centrally controlled system, this notification is also sent to the central server, instantly alerting appropriate staff members to the guest’s participation, as well as collecting data regarding program involvement.
Gary Bulson, Senior Engineer for the Hyatt Regency Maui Resort and Spa, said his property is the first in the Hyatt chain to adopt the ecoMODE control system, which is especially appropriate given the lush physical environment in which his property is located.ecoMODE is finding favor among guests as well as the hotel’s management, he noted.
“The feature I like best about the system is how it allows our guests to actively participate in choosing to allow a deeper set-back of room temperatures,” Bulson said. Not only is this a key to sustainability in developing a property’s commitment to going green, but it also is a key contributor to saving energy and, in turn, cutting costs property wide—a crucial consideration in an era when energy prices are going through the roof.
“We are very proud of our ecoMODE system,” said Inncom CEO Duane Buckingham. “ecoMODE further enhances Inncom's core energy management system, which has reigned as the leading solution in the worldwide hotel industry’s effort to install systems that are both environmentally friendly and ‘friendly’ to operators looking to dramatically reduce energy costs. ecoMODE is designed for any lodging property that seeks to demonstrate a firm commitment to environmental sustainability practices. We share that commitment with Hyatt Hotels & Resorts and are proud to be partnering with them on the Hyatt Regency Maui Resort and Spa installation.”
Evidence of the ecoMODE system’s impact on the lodging industry’s “Going Green” campaign is the fact that the Inncom product was singled out as the Kenneth F. Hine “Best of Show” award winner at the 92nd Annual International Hotel/Motel & Restaurant Show.
For more information on ecoMODE and other Inncom products, please visit the company Web site at www.inncom.com."
Aloha, Brad
Oil Price Changing Short-term Outlook for Hawaii
Editor's Note -- An ABC Video has since come out on Oct. 20, 2008 on these same matters: http://cosmos.bcst.yahoo.com/up/player/popup/index.php?cl=10291122
Don't blink while watching these financial markets, you might have missed the significance of what has happened to oil prices.
Of course here in Hawaii we see it at the gas pump, first time in more than a decade that gas prices don't seem to be "sticky" at high prices when the price per barrel of oil came down.
Oil was at it's all time high price per barrel this past July 11, 2008, at $147/barrel, when gas prices in much of Hawaii were about $5/gallon. The state was in real trouble at that point. Now with presumed deflationary events in the wider economy and credit markets, most consumable commodities have come down 30 to 50% in the past 3 months. Oil is at $71/barrel as of today, Oct. 17, 2008, and gasoline in Hawaii is below $4.00/gallon even on the outer islands.
Also of interest and importance, jet fuel is down 48% from its high in July 2008, now equal to the price that it was at in early Sept. 2007, when things started to go south. Marine diesel fuel (MDO) is down 30% from its high in July 2008. Other noteable commodities, such as steel and aluminium, are also off their highs.
Regarding the perceived general downturn in the economy on the mainland, it is worthwhile to note from: http://www.npr.org/templates/story/story.php?storyId=94921465
"There are about 51 million first mortgages in the United States right now — but only about 1.4 million of them are either referred for foreclosure or in foreclosure, said Mortgage Bankers Association chief economist Jay Brinkmann. In other words, fewer than 3 percent of American homes with mortgages are in foreclosure. The problem is this: Those bad loans are having an outsized impact on the financial world. They are mixed with good loans in securities that are crippling investment banks."
We propose that +90% of the homeowners on the mainland are still doing well and can travel this Winter and that the less than 5% under distress were not likely significant travelers to Hawaii anyway.
The vast majority of repeat travelers to Hawaii can still afford to come here and now with jet fuel costs HALF of what they were a year ago, airlines can afford to lower their airfares to Hawaii substantially and have already begun to do so. In fact, in the past week, we are already seeing an uptick in visitors to Hawaii independent of normal seasonality.
We believe what drove down visitor arrivals to Hawaii over the past half year or more was mostly high gasoline and jet fuel costs resulting in higher diminishing marginal return airfares, and we should now move past that at current fuel costs, at least for the time being. We believe this could last at least for this Winter season regardless of macroeconomic events on the mainland, short of a complete market collapse.
It is unfortunate Aloha Air and ATA could not last until now. Amazing that Go! Airline lasted to this point. Look for Go! or another airline to expand their interisland services and for Hawaiian to slowly lower their interisland airfares. Look for flights to and from the mainland to come down by at least 25% from the past Summer's high prices. Now is the time for the Hawaii Visitors Bureau and each island's Visitors Bureau to push some hard marketing pointing out the deals that travelers to Hawaii can get now and increasingly so in the months ahead.
By these events, with total luck Hawaii now has additional time to react to energy events. The outer islands still have to push hard to reduce their dependence upon oil-based energy, as oil prices will go back up again; we now have some breathing room to work with. On Kauai, KIUC needs to act now on the opportunity to begin a hedging strategy that their board and executive officers recently mentioned to the public that they would like to start should prices in the market allow for such a staggered hedging strategy to begin. Well, in the past few weeks, that opportunity at hedging has unexpectedly begun to present itself. It's time to act before that opportunity evaporates away. Furthermore, at these fuel prices, the Visitor Industry has at least a better Winter season to look forward to. Spread the word, happy days are hear again, sort of.
Timely reports and video today on oil and energy markets and expectations:
Report on price and OPEC: http://www.cnbc.com/id/27228164
Video on price expectations: http://www.cnbc.com/id/27236547
For more links to historical and current fuel prices click here.
Aloha, Brad
Don't blink while watching these financial markets, you might have missed the significance of what has happened to oil prices.
Of course here in Hawaii we see it at the gas pump, first time in more than a decade that gas prices don't seem to be "sticky" at high prices when the price per barrel of oil came down.
Oil was at it's all time high price per barrel this past July 11, 2008, at $147/barrel, when gas prices in much of Hawaii were about $5/gallon. The state was in real trouble at that point. Now with presumed deflationary events in the wider economy and credit markets, most consumable commodities have come down 30 to 50% in the past 3 months. Oil is at $71/barrel as of today, Oct. 17, 2008, and gasoline in Hawaii is below $4.00/gallon even on the outer islands.
Also of interest and importance, jet fuel is down 48% from its high in July 2008, now equal to the price that it was at in early Sept. 2007, when things started to go south. Marine diesel fuel (MDO) is down 30% from its high in July 2008. Other noteable commodities, such as steel and aluminium, are also off their highs.
Regarding the perceived general downturn in the economy on the mainland, it is worthwhile to note from: http://www.npr.org/templates/story/story.php?storyId=94921465
"There are about 51 million first mortgages in the United States right now — but only about 1.4 million of them are either referred for foreclosure or in foreclosure, said Mortgage Bankers Association chief economist Jay Brinkmann. In other words, fewer than 3 percent of American homes with mortgages are in foreclosure. The problem is this: Those bad loans are having an outsized impact on the financial world. They are mixed with good loans in securities that are crippling investment banks."
We propose that +90% of the homeowners on the mainland are still doing well and can travel this Winter and that the less than 5% under distress were not likely significant travelers to Hawaii anyway.
The vast majority of repeat travelers to Hawaii can still afford to come here and now with jet fuel costs HALF of what they were a year ago, airlines can afford to lower their airfares to Hawaii substantially and have already begun to do so. In fact, in the past week, we are already seeing an uptick in visitors to Hawaii independent of normal seasonality.
We believe what drove down visitor arrivals to Hawaii over the past half year or more was mostly high gasoline and jet fuel costs resulting in higher diminishing marginal return airfares, and we should now move past that at current fuel costs, at least for the time being. We believe this could last at least for this Winter season regardless of macroeconomic events on the mainland, short of a complete market collapse.
It is unfortunate Aloha Air and ATA could not last until now. Amazing that Go! Airline lasted to this point. Look for Go! or another airline to expand their interisland services and for Hawaiian to slowly lower their interisland airfares. Look for flights to and from the mainland to come down by at least 25% from the past Summer's high prices. Now is the time for the Hawaii Visitors Bureau and each island's Visitors Bureau to push some hard marketing pointing out the deals that travelers to Hawaii can get now and increasingly so in the months ahead.
By these events, with total luck Hawaii now has additional time to react to energy events. The outer islands still have to push hard to reduce their dependence upon oil-based energy, as oil prices will go back up again; we now have some breathing room to work with. On Kauai, KIUC needs to act now on the opportunity to begin a hedging strategy that their board and executive officers recently mentioned to the public that they would like to start should prices in the market allow for such a staggered hedging strategy to begin. Well, in the past few weeks, that opportunity at hedging has unexpectedly begun to present itself. It's time to act before that opportunity evaporates away. Furthermore, at these fuel prices, the Visitor Industry has at least a better Winter season to look forward to. Spread the word, happy days are hear again, sort of.
Timely reports and video today on oil and energy markets and expectations:
Report on price and OPEC: http://www.cnbc.com/id/27228164
Video on price expectations: http://www.cnbc.com/id/27236547
For more links to historical and current fuel prices click here.
Aloha, Brad
Neat Recently Posted Videos on Youtube
Here are the latest videos from Youtube subscriptions. If none other, I recommend viewing the last video listed here at the bottom:
New Videos from CSPANJUNKIEdotORG
Bush statement on the Economy Oct 14, 2008
Joe Biden Responds to Bush's Weekly Radio Address
After G-7 Meeting Bush Statement on Global Economy
Bush on Government Response to Financial Markets
New Videos from newculture
Peak Oil & Michigan: Richard Heinberg
Peak Oil & Michigan: Matt Simmons
New Videos from nibelungensohn
Roubini - "serveral hundred banks in the U.S. have to be shut down" (3 of 3)
Roubini - "serveral hundred banks in the U.S. have to be shut down" (2 of 3)
Roubini - "serveral hundred banks in the U.S. have to be shut down" (1 of 3)
Financial crisis, bailout, and the lack of responsibility
Financial crisis and Canada (2 of 2)
Financial crisis and Canada (1 of 2)
New Videos from RemiG2006
Roubini on Charlie Rose
Roubini: Worst Recession in 40 Years - P2
Roubini: Worst Recession in 40 Years - P1
Marc Faber on CNBC, Oct 14 - P3
Marc Faber on CNBC, Oct 14 - P2
Marc Faber on CNBC, Oct 14 - P1
Marc Faber interview on Oct 14 - P2
Marc Faber interview on Oct 14 - P1
Charlie Rose with Paul Volcker on ongoing events
Krugman: Not Rescuing Lehman Was `Big Mistake'
Rogers: 'let them go bankrupt' - P2
Jim Rogers: 'let them go bankrupt' - P1
Roubini: 'Severe Global Depression'
Rogers: CASH is the King.
New Videos from talkingsticktv
Talk - Unembedded: Four Independent Journalists on the War in Iraq
Talk - The Long Emergency - James Howard Kunstler
New Videos from Veracifier
Video Letter To The Editor
"Obama Is An Arab"-Says McCain Volunteer In Letters
Aloha, Brad
New Videos from CSPANJUNKIEdotORG
Bush statement on the Economy Oct 14, 2008
Joe Biden Responds to Bush's Weekly Radio Address
After G-7 Meeting Bush Statement on Global Economy
Bush on Government Response to Financial Markets
New Videos from newculture
Peak Oil & Michigan: Richard Heinberg
Peak Oil & Michigan: Matt Simmons
New Videos from nibelungensohn
Roubini - "serveral hundred banks in the U.S. have to be shut down" (3 of 3)
Roubini - "serveral hundred banks in the U.S. have to be shut down" (2 of 3)
Roubini - "serveral hundred banks in the U.S. have to be shut down" (1 of 3)
Financial crisis, bailout, and the lack of responsibility
Financial crisis and Canada (2 of 2)
Financial crisis and Canada (1 of 2)
New Videos from RemiG2006
Roubini on Charlie Rose
Roubini: Worst Recession in 40 Years - P2
Roubini: Worst Recession in 40 Years - P1
Marc Faber on CNBC, Oct 14 - P3
Marc Faber on CNBC, Oct 14 - P2
Marc Faber on CNBC, Oct 14 - P1
Marc Faber interview on Oct 14 - P2
Marc Faber interview on Oct 14 - P1
Charlie Rose with Paul Volcker on ongoing events
Krugman: Not Rescuing Lehman Was `Big Mistake'
Rogers: 'let them go bankrupt' - P2
Jim Rogers: 'let them go bankrupt' - P1
Roubini: 'Severe Global Depression'
Rogers: CASH is the King.
New Videos from talkingsticktv
Talk - Unembedded: Four Independent Journalists on the War in Iraq
Talk - The Long Emergency - James Howard Kunstler
New Videos from Veracifier
Video Letter To The Editor
"Obama Is An Arab"-Says McCain Volunteer In Letters
Aloha, Brad
Thursday, October 16, 2008
Wednesday, October 15, 2008
2008 Kauai General Election Endorsements
The 2008 General Election is November 4, 2008:
For Kauai Mayor: JoAnn Yukimura ****
For Kauai County Council:
1. Bruce Pleas *****
2. Kipukai Kuali`i ***
3. George Thronas ***
4. Derek Kawakami ***
5. Tim Bynum ****
6. Jay Furfaro **
7. No need vote for all 7. Jus' vote for the ones you really want in office.
***** Five stars are for exceptional good government candidates. Kauai needs these problem solvers in office.
Here is an excellent 2 page graphic on the candidates' positions: http://www.malamakauai.org/EcoRT/EcoRT-CandidatesChart.pdf
Vote 'Yes' for the Long Charter Amendment on the Kauai Ballot
The Citizens for Responsible Government obtained the 3,000 signatures needed to place a charter amendment on the ballot for the General Election. According to the groups' website, the amendment would:
"Help protect what remains of Kauai's beaches, coastline, open space and character. Over the past 8 years, the County Planning Commission has approved tourist development at a rate that is four times the high-end growth rate envisioned in the County's General Plan... Kauai simply cannot afford to let this continue!"
The passage of this charter amendment should result in governmental compliance with Kauai's General Plan.
"Responsible growth is needed now more than ever, not rampant over-development like what is happening in Po`ipu."
The group refers to this as "the long charter amendment" because the full text will be printed on the ballot rather then a short summary, which is how it will stand out from the rest. To get the simple explanation of the amendment and any other answers to your questions please visit their website at crgkauai.org.
Aloha, Brad
For Kauai Mayor: JoAnn Yukimura ****
For Kauai County Council:
1. Bruce Pleas *****
2. Kipukai Kuali`i ***
3. George Thronas ***
4. Derek Kawakami ***
5. Tim Bynum ****
6. Jay Furfaro **
7. No need vote for all 7. Jus' vote for the ones you really want in office.
***** Five stars are for exceptional good government candidates. Kauai needs these problem solvers in office.
Here is an excellent 2 page graphic on the candidates' positions: http://www.malamakauai.org/EcoRT/EcoRT-CandidatesChart.pdf
Vote 'Yes' for the Long Charter Amendment on the Kauai Ballot
The Citizens for Responsible Government obtained the 3,000 signatures needed to place a charter amendment on the ballot for the General Election. According to the groups' website, the amendment would:
"Help protect what remains of Kauai's beaches, coastline, open space and character. Over the past 8 years, the County Planning Commission has approved tourist development at a rate that is four times the high-end growth rate envisioned in the County's General Plan... Kauai simply cannot afford to let this continue!"
The passage of this charter amendment should result in governmental compliance with Kauai's General Plan.
"Responsible growth is needed now more than ever, not rampant over-development like what is happening in Po`ipu."
The group refers to this as "the long charter amendment" because the full text will be printed on the ballot rather then a short summary, which is how it will stand out from the rest. To get the simple explanation of the amendment and any other answers to your questions please visit their website at crgkauai.org.
Aloha, Brad
Obama wins 3rd Debate...McCain 3 Strikes & Out
It's done. He's cooked. It's over.
Before this debate there was still 7% of the electorate undecided. Look for Obama to get at least half of that and win by a nationwide percent of at least 54% to 46% for McCain. Watch for events to develop now in the economy, government and elsewhere in expectation of the transition of government. Expect long Obama coat-tails down the ballot.
From: http://www.cnn.com/2008/POLITICS/10/15/debate.poll/index.html
Watch entire debate: Part 1 » Part 2 » Part 3 » Transcript of debate
HEMPSTEAD, New York (CNN) -- "A majority of debate watchers think Sen. Barack Obama won the third and final presidential debate, according to a national poll conducted right afterward.
Sens. Barack Obama and John McCain debate face to face Wednesday night.
Fifty-eight percent of debate watchers questioned in a CNN/Opinion Research Corp. poll said Democratic candidate Obama did the best job in the debate, with 31 percent saying Republican Sen. John McCain performed best.
The poll also suggests that debate watchers' favorable opinion of Obama rose slightly during the debate, from 63 percent at the start to 66 percent at the end. The poll indicates that McCain's favorables dropped slightly, from 51 percent to 49 percent.
The economy was the dominant issue of the debate, and 59 percent of debate watchers polled said Obama would do a better job handling the economy, 24 points ahead of McCain.
During the debate, McCain attacked Obama's stance on taxes, accusing Obama of seeking tax increases that would "spread the wealth around." But by 15 points, 56 percent to 41 percent, debate watchers polled said Obama would do a better job on taxes. By a 2-1 margin, 62 percent to 31 percent, debate watchers said Obama would do a better job on health care.
Sixty-six percent of debate watchers said Obama more clearly expressed his views, with 25 percent saying McCain was more clear about his views.
By 23 points, those polled said Obama was the stronger leader during the debate. By 48 points, they said Obama was more likeable.
McCain won in two categories. Eighty percent of debate watchers polled said McCain spent more time attacking his opponent, with seven percent saying Obama was more on the attack. Fifty-four percent said McCain seemed more like a typical politician during the debate, with 35 percent saying Obama acted more like a typical politician.
"Independents tend to prefer debates that are dominated by substance and light on discussion of personal characteristics," said Keating Holland, CNN polling director. "The perception that McCain attacked Obama gave red meat to GOP partisans, but it probably didn't help McCain with independents."
"There was a notable gender gap as well," Holland said. "Women thought Obama won the debate by a 62 percent to 28 percent margin. Among men, Obama's lead was narrower, 54 percent to 35 percent in Obama's favor."
During the debate, McCain demanded to know the full extent of Obama's relationship with William Ayers, a 1960s radical. But the poll suggests that line of attack may not resonate with Americans. Fifty-one percent of debate watchers said Obama's connection to Ayers didn't matter at all to them, with 23 percent saying it mattered a great deal.
The audience for the debate poll appeared to be a bit more Democratic -- and a bit more Republican -- than the U.S. population as a whole. Forty percent of debate watchers in the survey were Democrats and 30 percent Republicans.
CNN's estimate of the number of Democrats in the voting age population as a whole indicates the sample is about 3 to 4 points more Democratic than the population as a whole, but also about 2 to 3 points more Republican than the population as a whole.
Eighty-eight percent of Democrats questioned in the poll said Obama did the best job, with 68 percent of Republicans saying McCain performed best. Among independents, 57 percent said Obama did the best job, with 31 percent backing McCain as the winner of the debate.
The candidates first debated in Oxford, Mississippi, on September 26. Fifty-one percent of debate watchers polled by CNN and the Opinion Research Corp. said Obama won that debate, with 38 percent saying McCain performed best. The second presidential debate was held in Nashville, Tennessee, on October 7 and 54 percent of debate watchers polled said Obama won, compared with 30 percent who said McCain did the best job.
The running mates, Democratic Sen. Joe Biden of Delaware and Republican Gov. Sarah Palin of Alaska faced off in Saint Louis, Missouri, in the single vice presidential debate October 2. Fifty-one percent of debate watchers polled said Biden won, and 36 percent said Palin won.
The post-debate polls do not reflect the views of all Americans. They only represent the views of people who watched the debates.
The CNN/Opinion Research Corp. poll was conducted by telephone Wednesday night, with 620 adult Americans who watched the debate questioned. The survey's sampling error is plus or minus 4 percentage points."
Best poll of polls on the net: http://www.realclearpolitics.com/epolls/2008/president/us/general_election_mccain_vs_obama-225.html
Electoral by state: http://www.realclearpolitics.com/epolls/election_2008/electoral_count.html
Aloha, Brad
Before this debate there was still 7% of the electorate undecided. Look for Obama to get at least half of that and win by a nationwide percent of at least 54% to 46% for McCain. Watch for events to develop now in the economy, government and elsewhere in expectation of the transition of government. Expect long Obama coat-tails down the ballot.
From: http://www.cnn.com/2008/POLITICS/10/15/debate.poll/index.html
Watch entire debate: Part 1 » Part 2 » Part 3 » Transcript of debate
HEMPSTEAD, New York (CNN) -- "A majority of debate watchers think Sen. Barack Obama won the third and final presidential debate, according to a national poll conducted right afterward.
Sens. Barack Obama and John McCain debate face to face Wednesday night.
Fifty-eight percent of debate watchers questioned in a CNN/Opinion Research Corp. poll said Democratic candidate Obama did the best job in the debate, with 31 percent saying Republican Sen. John McCain performed best.
The poll also suggests that debate watchers' favorable opinion of Obama rose slightly during the debate, from 63 percent at the start to 66 percent at the end. The poll indicates that McCain's favorables dropped slightly, from 51 percent to 49 percent.
The economy was the dominant issue of the debate, and 59 percent of debate watchers polled said Obama would do a better job handling the economy, 24 points ahead of McCain.
During the debate, McCain attacked Obama's stance on taxes, accusing Obama of seeking tax increases that would "spread the wealth around." But by 15 points, 56 percent to 41 percent, debate watchers polled said Obama would do a better job on taxes. By a 2-1 margin, 62 percent to 31 percent, debate watchers said Obama would do a better job on health care.
Sixty-six percent of debate watchers said Obama more clearly expressed his views, with 25 percent saying McCain was more clear about his views.
By 23 points, those polled said Obama was the stronger leader during the debate. By 48 points, they said Obama was more likeable.
McCain won in two categories. Eighty percent of debate watchers polled said McCain spent more time attacking his opponent, with seven percent saying Obama was more on the attack. Fifty-four percent said McCain seemed more like a typical politician during the debate, with 35 percent saying Obama acted more like a typical politician.
"Independents tend to prefer debates that are dominated by substance and light on discussion of personal characteristics," said Keating Holland, CNN polling director. "The perception that McCain attacked Obama gave red meat to GOP partisans, but it probably didn't help McCain with independents."
"There was a notable gender gap as well," Holland said. "Women thought Obama won the debate by a 62 percent to 28 percent margin. Among men, Obama's lead was narrower, 54 percent to 35 percent in Obama's favor."
During the debate, McCain demanded to know the full extent of Obama's relationship with William Ayers, a 1960s radical. But the poll suggests that line of attack may not resonate with Americans. Fifty-one percent of debate watchers said Obama's connection to Ayers didn't matter at all to them, with 23 percent saying it mattered a great deal.
The audience for the debate poll appeared to be a bit more Democratic -- and a bit more Republican -- than the U.S. population as a whole. Forty percent of debate watchers in the survey were Democrats and 30 percent Republicans.
CNN's estimate of the number of Democrats in the voting age population as a whole indicates the sample is about 3 to 4 points more Democratic than the population as a whole, but also about 2 to 3 points more Republican than the population as a whole.
Eighty-eight percent of Democrats questioned in the poll said Obama did the best job, with 68 percent of Republicans saying McCain performed best. Among independents, 57 percent said Obama did the best job, with 31 percent backing McCain as the winner of the debate.
The candidates first debated in Oxford, Mississippi, on September 26. Fifty-one percent of debate watchers polled by CNN and the Opinion Research Corp. said Obama won that debate, with 38 percent saying McCain performed best. The second presidential debate was held in Nashville, Tennessee, on October 7 and 54 percent of debate watchers polled said Obama won, compared with 30 percent who said McCain did the best job.
The running mates, Democratic Sen. Joe Biden of Delaware and Republican Gov. Sarah Palin of Alaska faced off in Saint Louis, Missouri, in the single vice presidential debate October 2. Fifty-one percent of debate watchers polled said Biden won, and 36 percent said Palin won.
The post-debate polls do not reflect the views of all Americans. They only represent the views of people who watched the debates.
The CNN/Opinion Research Corp. poll was conducted by telephone Wednesday night, with 620 adult Americans who watched the debate questioned. The survey's sampling error is plus or minus 4 percentage points."
Best poll of polls on the net: http://www.realclearpolitics.com/epolls/2008/president/us/general_election_mccain_vs_obama-225.html
Electoral by state: http://www.realclearpolitics.com/epolls/election_2008/electoral_count.html
Aloha, Brad
Credit Default Swaps Explained
"How the Credit Default Swaps Market Works"
By Reuters | 15 Oct 2008
"Regulators have stepped up calls since the collapse of Lehman Brothers last month for more supervision of the $55 trillion credit derivatives market to improve its safety and transparency.
Below are facts about the market to date.
How They Work: Credit default swaps (CDS) are over-the-counter contracts between two counterparties that bet on whether a company will default on its bonds within a fixed period of time.
In its simplest form, one side of a CDS contract pays an annual fee to buy protection against default. The other side, the seller of protection, promises to cover losses in the value of the debt if a default takes place within the period of the contract.
When the market began trading, if a default or other agreed "credit event" such as change of control occurred, the buyer of protection would hand the bond over to the seller in return for its face value. Cash settlement is now a more common market option (see below).
Investors use CDS to hedge against cash investments or to speculate on the direction of the credit markets.
Market Size
end-2001: $918 billion
end-2002: $2.2 trillion
end-2003: $3.8 trillion
end-2004: $8.4 trillion
end-2005: $17.1 trillion
end-2006: $34.4 trillion
end-2007: $62.3 trillion
mid-2008: $54.6 trillion
Amount of outstanding contracts, according to the International Swaps and Derivatives Association (ISDA).
Market History
In the early 1990s dealers began to develop an organized market from ad hoc attempts by banks to hedge credit risks on their books.
In 1997, 1999 and 2003, ISDA issued agreements and definitions that helped standardize CDS contracts.
In 2004, indexes created by different investment banks merged to create the CDX series of indexes in North America and the iTraxx indexes in Europe, with Markit as the sole data administrator.
In spring 2005, the first auction was organized after a default to come up with a price for cash settlement of contracts, instead of requiring that the protection buyer deliver a physical bond.
In September 2005, the New York Federal Reserve Bank called 14 major dealers to a meeting on market operations after backlogs between trade and settlement became as long as 90 days.
This led to the creation of a central depository and an agreed protocol under which investors and dealers must request the approval of a counterparty to transfer the risk to a third party, known as novation. This enabled dealers to better determine risk exposures by netting out offsetting trades.
At end-July 2008 in a letter to the New York Fed, CDS dealers and industry organisations agreed on a set of goals to make market operations more efficient, including creation of a central clearing house.
In September 2008, Lehman Brothers was the first major dealer to file for bankruptcy, triggering billions of dollars of losses by its counterparties and by sellers of protection on its
debt.
Cash Settlement
Auctions for cash settlement of contracts have become standard practice, used to resolve around 13 credit events so far, according to the ISDA Web site. This has allowed the outstanding amounts of CDS contracts to expand to multiples of the number of outstanding cash bonds for the names that are most active.
The latest auctions in October covered the debts of Lehman Brothers and Fannie Mae and Freddie Mac.
Cash Settlement Auctions -- Forthcoming Dates
Oct. 23: Washington Mutual
Nov. 4: Landsbanki
Nov. 5: Glitnir
Nov. 6: Kaupthing
Targets Agreed with the New York Fed for End-2008
Creation of a central clearing house, which will start by clearing U.S. indexes and extend to other CDS contracts in 2009. The Clearing Corporation, owned by a group of major dealers, is vying with The Chicago Mercantile Exchange, NYSE Euronext's Liffe unit, the IntercontinentalExchange and others that plan to offer this service.#
All novations processed electronically on the same day.
Trades unconfirmed over 30 days not to exceed one business day of trading volume.
A plan that sets timeframes for achieving confirmation of electronically eligible trades on the trade date.
Backlogs
Business days worth of oustanding confirmations aged over 30 days -- a measure of efficiency of trade processing
June 2008: less than 1
March 2008: 1.3
December 2007: 2.5
September 2007: 3.5
June 2007: 2
December 2006: 3.5
February 2006: 7.5
Rough estimates based on line graph published by Markit.
Benchmarks
The most liquid instruments in the market are CDS on benchmark indexes that reference the five-year debt of portfolios of companies.
Markit iTraxx Europe -- based on 125 European investment-grade companies
Markit iTraxx Crossover -- based on 50 European companies mostly junk-rated with stable outlook
Markit CDX IG -- based on 125 investment-grade North
American companies
Markit CDX HY -- based on 100 North American companies that do not rank as investment grade
Underlying Companies
About 3,400 corporate names, although that includes some duplication of senior and subordinated debt of the same companies, according to Markit.
Netting
Average number of pre-netted and post-netted settlements per dealer per month
June 2008: pre 300,000, post 25,000
December 2007: pre 240,000, post 25,000
June 2007: pre 175,000, post 30,000
December 2006: pre 140,000, post 15,000
December 2005: pre 80,000, post 35,000
Rough estimates based on line graph published by Markit."
Dealers Include:
"Bank of America [BAC 25.19 -1.34 (-5.05%) ], Barclays Capital, BNP Paribas, Citigroup [C 16.8 -1.82 (-9.77%) ], Credit Suisse, Deutsche Bank, Dresdner Kleinwort, Goldman Sachs [GS 115.86 -7.04 (-5.73%) ], HSBC Group, JP Morgan [JPM 39.92 -0.79 (-1.94%) ], Morgan Stanley [MS 18.76 -2.91 (-13.43%) ], Royal Bank of Scotland, Societe Generale, UBS. (Signatories of July letter to New York Fed.)"
By Reuters | 15 Oct 2008
"Regulators have stepped up calls since the collapse of Lehman Brothers last month for more supervision of the $55 trillion credit derivatives market to improve its safety and transparency.
Below are facts about the market to date.
How They Work: Credit default swaps (CDS) are over-the-counter contracts between two counterparties that bet on whether a company will default on its bonds within a fixed period of time.
In its simplest form, one side of a CDS contract pays an annual fee to buy protection against default. The other side, the seller of protection, promises to cover losses in the value of the debt if a default takes place within the period of the contract.
When the market began trading, if a default or other agreed "credit event" such as change of control occurred, the buyer of protection would hand the bond over to the seller in return for its face value. Cash settlement is now a more common market option (see below).
Investors use CDS to hedge against cash investments or to speculate on the direction of the credit markets.
Market Size
end-2001: $918 billion
end-2002: $2.2 trillion
end-2003: $3.8 trillion
end-2004: $8.4 trillion
end-2005: $17.1 trillion
end-2006: $34.4 trillion
end-2007: $62.3 trillion
mid-2008: $54.6 trillion
Amount of outstanding contracts, according to the International Swaps and Derivatives Association (ISDA).
Market History
In the early 1990s dealers began to develop an organized market from ad hoc attempts by banks to hedge credit risks on their books.
In 1997, 1999 and 2003, ISDA issued agreements and definitions that helped standardize CDS contracts.
In 2004, indexes created by different investment banks merged to create the CDX series of indexes in North America and the iTraxx indexes in Europe, with Markit as the sole data administrator.
In spring 2005, the first auction was organized after a default to come up with a price for cash settlement of contracts, instead of requiring that the protection buyer deliver a physical bond.
In September 2005, the New York Federal Reserve Bank called 14 major dealers to a meeting on market operations after backlogs between trade and settlement became as long as 90 days.
This led to the creation of a central depository and an agreed protocol under which investors and dealers must request the approval of a counterparty to transfer the risk to a third party, known as novation. This enabled dealers to better determine risk exposures by netting out offsetting trades.
At end-July 2008 in a letter to the New York Fed, CDS dealers and industry organisations agreed on a set of goals to make market operations more efficient, including creation of a central clearing house.
In September 2008, Lehman Brothers was the first major dealer to file for bankruptcy, triggering billions of dollars of losses by its counterparties and by sellers of protection on its
debt.
Cash Settlement
Auctions for cash settlement of contracts have become standard practice, used to resolve around 13 credit events so far, according to the ISDA Web site. This has allowed the outstanding amounts of CDS contracts to expand to multiples of the number of outstanding cash bonds for the names that are most active.
The latest auctions in October covered the debts of Lehman Brothers and Fannie Mae and Freddie Mac.
Cash Settlement Auctions -- Forthcoming Dates
Oct. 23: Washington Mutual
Nov. 4: Landsbanki
Nov. 5: Glitnir
Nov. 6: Kaupthing
Targets Agreed with the New York Fed for End-2008
Creation of a central clearing house, which will start by clearing U.S. indexes and extend to other CDS contracts in 2009. The Clearing Corporation, owned by a group of major dealers, is vying with The Chicago Mercantile Exchange, NYSE Euronext's Liffe unit, the IntercontinentalExchange and others that plan to offer this service.#
All novations processed electronically on the same day.
Trades unconfirmed over 30 days not to exceed one business day of trading volume.
A plan that sets timeframes for achieving confirmation of electronically eligible trades on the trade date.
Backlogs
Business days worth of oustanding confirmations aged over 30 days -- a measure of efficiency of trade processing
June 2008: less than 1
March 2008: 1.3
December 2007: 2.5
September 2007: 3.5
June 2007: 2
December 2006: 3.5
February 2006: 7.5
Rough estimates based on line graph published by Markit.
Benchmarks
The most liquid instruments in the market are CDS on benchmark indexes that reference the five-year debt of portfolios of companies.
Markit iTraxx Europe -- based on 125 European investment-grade companies
Markit iTraxx Crossover -- based on 50 European companies mostly junk-rated with stable outlook
Markit CDX IG -- based on 125 investment-grade North
American companies
Markit CDX HY -- based on 100 North American companies that do not rank as investment grade
Underlying Companies
About 3,400 corporate names, although that includes some duplication of senior and subordinated debt of the same companies, according to Markit.
Netting
Average number of pre-netted and post-netted settlements per dealer per month
June 2008: pre 300,000, post 25,000
December 2007: pre 240,000, post 25,000
June 2007: pre 175,000, post 30,000
December 2006: pre 140,000, post 15,000
December 2005: pre 80,000, post 35,000
Rough estimates based on line graph published by Markit."
Dealers Include:
"Bank of America [BAC 25.19 -1.34 (-5.05%) ], Barclays Capital, BNP Paribas, Citigroup [C 16.8 -1.82 (-9.77%) ], Credit Suisse, Deutsche Bank, Dresdner Kleinwort, Goldman Sachs [GS 115.86 -7.04 (-5.73%) ], HSBC Group, JP Morgan [JPM 39.92 -0.79 (-1.94%) ], Morgan Stanley [MS 18.76 -2.91 (-13.43%) ], Royal Bank of Scotland, Societe Generale, UBS. (Signatories of July letter to New York Fed.)"
Iceland's Crisis Developments and Background
I report/repost on Iceland developments because they are like the "canary in the coal mine." Their situation seems to be further along in the crisis than most other places, but also because they are an island national with a relatively low population of only about 300,000. Geopolitically they are also right on the borderline between Western 'free markets' and Eastern 'state control.' It is instructive to see what is happening there:
http://www.rgemonitor.com/683/Nordics?cluster_id=3230
"Iceland In Crisis: Stocks Drop 77% Despite Emergency Measures Passed To Try Avert National Bankruptcy"
Oct. 14: Iceland's benchmark stock index dropped 77%, its biggest decline on record, as trading resumed after a three-day suspension and the nationalization of the country's 3 largest banks, whose assets are 12 times Iceland's economy (Bloomberg)
Iceland's government has announced emergency measures to prevent the country from descending into national bankruptcy Emergency measures include:
Iceland may ask for a loan from the IMF in addition to opening formal talks on Oct 14 to borrow as much as EUR4 billion ($5.5 bn) from Russia; such a loan would bolster the Central Bank's fx reserves and stabilize the krona exchange rate (See related spotlight issue: To Whom Will Iceland Turn For Capital? And At What Cost?)
Iceland's Financial Supervisory Authority took control of Kaupthing (Iceland's biggest bank) on Oct 9, Landsbanki (the country's 2nd largest bank) was taken into receivership on Oct 7 (See related spotlight issue: Iceland: Nationalization Of Banking Sector In Progress)
On Oct 7, Iceland tried to institute a currency peg - at ISK131/EUR - but the peg was scrapped after just a day when it became clear the Cenbank would be unable to defend it, given Iceland's small fx reserves (EUR 3bn)
New legislation will allow the govt to take over housing loans held by banks and put them in a government housing fund, an effort to help thousands of islanders who face the loss of their homes amid an ever-widening credit crunch (FT)
Pension funds were urged to repatriate overseas assets, while banks have been asked to help solve their liquidity problems by selling foreign assets and government has sought loans from Nordic central banks
Govt fully guaranteed domestic bank deposits Events Leading Up To Emergency Measures
Oct 6: All the leading credit ratings agencies moved to downgrade Iceland’s four major banks and its sovereign credit rating (for two of the credit rating agencies, this was the second downgrade in days) amid concern the govt would be stretched too thin if called upon to stand behind its banks
Sept 30: Fitch and S&P downgraded Iceland's sovereign debt rating a notch, while Moody's put its rating on review for a potential downgrade, reflecting investor concerns in the wake of the government's rescue of Glitnir bank on Sept 30 (See related spotlight issue: Iceland's Government: Nationalization Of Banking Sector In Progress)
Iceland’s banks have been under pressure for most of 2008, struggling with rampant inflation, rapidly depreciating currency and general fallout from an overheated economy (See: Iceland's Banking System In Turmoil: How It Got Here)
The problem is lack of a lender of last resort since Iceland's CenBank can only print ISK, whereas Icelandic banks' liquidity needs are in foreign currency. A solution may require the support of the IMF and Nordic governments.
Adding to hard landing fears, many Icelandic borrowers opted for 'basket' loans tied to the yen and Swiss franc, while household krona loans are tied to inflation, which is currently running at 14%. (WSJ)
In mid-May, Iceland arranged a EUR1.5 billion swap line with Nordic central banks that gives the Icelandic govt access to finance in the event it needs to support its banks.
Portes: Fiscal soundness is a key buffer and calculations suggest that in the worst case scenario of a govt bailout of the banks, its gross debt as % of GDP would rise to around the level of Belgium.
Oct 14, 2008 Associated Readings (14 Articles)
News Bloomberg Jakob Lindstroem Oct 14, 2008
Icelandic Stocks Drop 77% as Trading Resumes After 3-Day Halt<
http://www.rgemonitor.com/683/Nordics?cluster_id=3230
"Iceland In Crisis: Stocks Drop 77% Despite Emergency Measures Passed To Try Avert National Bankruptcy"
Oct. 14: Iceland's benchmark stock index dropped 77%, its biggest decline on record, as trading resumed after a three-day suspension and the nationalization of the country's 3 largest banks, whose assets are 12 times Iceland's economy (Bloomberg)
Iceland's government has announced emergency measures to prevent the country from descending into national bankruptcy Emergency measures include:
Iceland may ask for a loan from the IMF in addition to opening formal talks on Oct 14 to borrow as much as EUR4 billion ($5.5 bn) from Russia; such a loan would bolster the Central Bank's fx reserves and stabilize the krona exchange rate (See related spotlight issue: To Whom Will Iceland Turn For Capital? And At What Cost?)
Iceland's Financial Supervisory Authority took control of Kaupthing (Iceland's biggest bank) on Oct 9, Landsbanki (the country's 2nd largest bank) was taken into receivership on Oct 7 (See related spotlight issue: Iceland: Nationalization Of Banking Sector In Progress)
On Oct 7, Iceland tried to institute a currency peg - at ISK131/EUR - but the peg was scrapped after just a day when it became clear the Cenbank would be unable to defend it, given Iceland's small fx reserves (EUR 3bn)
New legislation will allow the govt to take over housing loans held by banks and put them in a government housing fund, an effort to help thousands of islanders who face the loss of their homes amid an ever-widening credit crunch (FT)
Pension funds were urged to repatriate overseas assets, while banks have been asked to help solve their liquidity problems by selling foreign assets and government has sought loans from Nordic central banks
Govt fully guaranteed domestic bank deposits Events Leading Up To Emergency Measures
Oct 6: All the leading credit ratings agencies moved to downgrade Iceland’s four major banks and its sovereign credit rating (for two of the credit rating agencies, this was the second downgrade in days) amid concern the govt would be stretched too thin if called upon to stand behind its banks
Sept 30: Fitch and S&P downgraded Iceland's sovereign debt rating a notch, while Moody's put its rating on review for a potential downgrade, reflecting investor concerns in the wake of the government's rescue of Glitnir bank on Sept 30 (See related spotlight issue: Iceland's Government: Nationalization Of Banking Sector In Progress)
Iceland’s banks have been under pressure for most of 2008, struggling with rampant inflation, rapidly depreciating currency and general fallout from an overheated economy (See: Iceland's Banking System In Turmoil: How It Got Here)
The problem is lack of a lender of last resort since Iceland's CenBank can only print ISK, whereas Icelandic banks' liquidity needs are in foreign currency. A solution may require the support of the IMF and Nordic governments.
Adding to hard landing fears, many Icelandic borrowers opted for 'basket' loans tied to the yen and Swiss franc, while household krona loans are tied to inflation, which is currently running at 14%. (WSJ)
In mid-May, Iceland arranged a EUR1.5 billion swap line with Nordic central banks that gives the Icelandic govt access to finance in the event it needs to support its banks.
Portes: Fiscal soundness is a key buffer and calculations suggest that in the worst case scenario of a govt bailout of the banks, its gross debt as % of GDP would rise to around the level of Belgium.
Oct 14, 2008 Associated Readings (14 Articles)
News Bloomberg Jakob Lindstroem Oct 14, 2008
Icelandic Stocks Drop 77% as Trading Resumes After 3-Day Halt<