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Our January 20, 2008 Newsletter
Edition
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IN THE NEWS:
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.
YOU
HAVE EVERY RIGHT TO A SECOND PASSPORT
By
Bob Bauman - January 8, 2008
.
In
all the news media ballyhoo before the Iowa caucuses and the New
Hampshire primary, a disturbing, indeed radical proposal by Republican
presidential candidate (and Iowa winner), Mike Huckabee, seems to have
slipped by unnoticed. Huckabee claims to be for less government
and more freedom, but his proposal is no less than Big Brother in
action. The former Arkansas governor wants to impose a federal
law that would deny American citizens the right to hold dual
citizenship. Never mind the fact that the U.S. Supreme Court upheld
this right in several cases decades ago. Huckabee actually claims
he wants to make it a crime for a potential estimate of 40 million
Americans, who now have a right to dual citizenship, even to use a
foreign passport for travel or business purposes.
.
In
1967, the U.S. Supreme Court upheld the right of U.S. citizens to hold
a second, foreign passport in the case of Afroyim v. Rusk, 387 U.S. 253
(1967).
Prior to this ruling, the official U.S. stance was that a person
acquiring second nationality automatically lost U.S. citizenship. Since
the 1967 ruling, the government must presume a U.S. citizen does not
wish to surrender citizenship. The U.S. government has the burden
of proof to show intentional abandonment of U.S. citizenship. This
presumption is also set forth in a U.S. Department of State
publication, Advice About Possible Loss of U.S. Citizenship and Dual
Nationality, (1990). As a matter of policy, the U.S. Government
now recognizes dual nationality but does not encourage it because of
what the federal bureaucracy views as problems and conflicts that may
result.
.
http://www.sovereignsociety.com/offshore2423.html
.
EDITORS
NOTES:
There still seems to be a large number of US citizens who are under the
impression that dual citizenship is illegal, but this is not true, at
least at the moment. Which is to say, one can speculate that as
Americans possibly continue to expatriate at the rates they have been
in the past (and take their money with them, which we tend to believe
is the real concern), the politicians of course may certainly look to
change things going forward as they become alarmed over the
exodus. Heck, they might just enact some draconian measures for
merely thinking about it (see below).
.
.
THINKING
FOR YOURSELF IS NOW A CRIME
By
Paul Craig Roberts - January 4, 2008
.
What
was the greatest failure of 2007? President Bush's surge in Iraq? The
decline in the value of the US dollar? Sub-prime mortgages? No. The
greatest failure of 2007 was the newly sworn in Democratic Congress.
.
On
October 23, 2007, the House passed a bill sponsored by California
Democratic congresswoman Jane Harman, chairwoman of a Homeland Security
subcommittee, that overturns the constitutionally guaranteed rights to
free expression, association, and assembly. The bill passed the
House on a vote of 404-6. In the Senate the bill is sponsored by Maine
Republican Susan Collins and apparently faces no meaningful
opposition. Harman's bill is called the Violent Radicalization
and Homegrown Terrorism Prevention Act. When HR 1955 becomes law,
it will create a commission tasked with identifying extremist people,
groups, and ideas. The commission will hold hearings around the
country, taking testimony and compiling a list of dangerous people and
beliefs. The bill will, in short, create massive terrorism in the
United States. But the perpetrators of terrorism will not be Muslim
terrorists; they will be government agents and fellow citizens.
.
We
are beginning to see who will be the inmates of the detention centers
being built in the US by Halliburton under government contract.
Who will be on the extremist beliefs list? The answer is: civil
libertarians, critics of Israel, 9/11 skeptics, critics of the
administration's wars and foreign policies, critics of the
administration's use of kidnapping, rendition, torture and violation of
the Geneva Conventions, and critics of the administration's spying on
Americans. Anyone in the way of a powerful interest group--such as
environmentalists opposing politically connected developers--is also a
candidate for the list.
.
http://www.counterpunch.org/roberts01042008.html
.
.
BILL
A THREAT TO CIVIL LIBERTIES - By Mike Hoeflich -
January 2, 2008
.
As
the media daily reports government abuses of individual civil and
constitutional rights in the name of the war against terrorism, and as
the now Democratic-controlled Congress continues to hold public
hearings on the worst of these abuses, a new threat to the civil
liberties of Americans quietly wends its way through the halls of
Congress. On April 19, 2007, Rep. Jane Harmon, Democrat of
California, introduced H.R. 1955 onto the floor of the House of
Representatives. On
Oct. 24, 2007, this bill, named
the Violent
Radicalization and Homegrown Terrorism Prevention Act of 2007 was passed by a
bipartisan majority by the House. Its Senate counterpart, S.1959,
introduced by Sen. Susan Collins, Republican of Maine, is now in
committee awaiting action. While it is good to see that Congress is
still capable of bipartisan activity, one might have hoped that this
cooperation would not have extended to this bill.
.
H.R.
1955 and S. 1959 are designed to establish a new National Commission on
the Prevention of Violent Radicalization and Ideologically Based
Violence. This commission is given broad powers to investigate
homegrown terrorism, ideologically based violence, and violent
radicalization anywhere in the United States. The definitions provided
for these activities are frighteningly broad and include both violence
against individuals and property as well as coming quite close to
creating what some in the media have referred to as thought crimes.
.
http://www2.ljworld.com/news/2008/jan/02/bill_threat_civil_liberties/
.
.
EDITORS
NOTES:
Why is this new legislation necessary and how
many Americans are even aware of it? Just when you
think they have already gone to the extreme in terms of abolishing
civil liberties, they come up with something else.
.
According
to Mr. Marty Luster, commenting on this same new legislation in a
January 9 article from the Ithaca Journal: The bill also raises
the specter of government-imposed restrictions of access to
Internet-provided information and greater surveillance of Internet
users. Among its legislative findings is this: The Internet has aided
in facilitating violent radicalization, ideologically based violence,
and the homegrown terrorism process in the United States by providing
access to broad and constant streams of terrorist-related propaganda to
United States citizens (end of quote).
.
The
US Congresswoman, Ms. Jane Harman (D-Calif.), who sponsored this, is
quoted as declaring back on Nov. 7, that the new National Commission to
be set up will propose to both Congress and the secretary of homeland
security, initiatives to intercede before radicalized individuals turn
violent. Intercede based upon what? What someone may opine
in a newspaper article, on-line bulletin board or blog? And what
exactly does intercede mean? I thought Joe McCarthy was dead and
buried? It was a nice country, once upon a time. Rather, it
was a free country, once upon a time.
.
Why
is this so alarming and who cares? Well, for starters, the
Internet indeed has become the last bastion of the interdependent
media, plus free and unfettered thought (we can't have that, now can
we?). Some of it good, stimulating, thoughtful and
provocative. Some of it, rude, unpleasant and dare I say,
politically incorrect. However, if you believe in a free society,
then you believe in everyone's right to express an opinion regardless
of however with all your might you may disagree. Also, in a
modern society with hopefully educated citizenry, people can quickly
make up their own minds what they wish to read, and agree with (or are
we all that stupid, that we cannot think for ourselves anymore?).
.
Democracy
does not function in a vacuum, whereby the only ideas or information
presented are solely of government origin. Also, there are hidden
or undeclared outcomes, like termites you never see, that eventually
tumble your house down. Calamity Jane (my new moniker for Rep. Jane
Harman) will have you believe that access to information and ideas
poses a grave and present danger. Funny how that is exactly what
the totalitarian government in China believes also. The Chinese
have become more like the US in terms of free market capitalism, and it
would seem the US government is trying to become more like the Chinese
in terms of government spying and censorship. I am not sure where
this is all going, but I for one, would not interpret this as being a
positive.
.
On
a similar note, a client sent in the following news item to us
regarding even more invasion of privacy as it pertains to electronic
communications (email, telephone). The article dated January
14, 2008
says: National Intelligence Director Mike McConnell is drawing up
plans for cyberspace spying that would make the current debate on
warrant-less wiretaps look like a walk in the park, according to an
interview published in the New Yorker's print edition today. Ed
Giorgio, who is working with McConnell on the plan, said that would
mean giving the government the authority to examine the content of any
e-mail, file transfer or Web search. The infrastructure to tap
into Americans' email and web search history may already be in
place. In November, a former technician at AT&T alleged that
the telecom forwarded virtually all of its Internet traffic into a
secret room to facilitate government spying. Whistleblower Mark
Klein said that a copy of all Internet traffic passing over AT&T
lines was copied into a locked room at the company's San Francisco
office -- to which only employees with National Security Agency
clearance had access -- via a cable splitting device.
.
http://rawstory.com/news/2007/US_drafting_plan_to_allow_government_0114.html
.
.
STANDING
FOR OUR PRINCIPLES EVEN WHERE WE'RE TERRIFIED
By
Leonard Pitts Jr. - January 6, 2008
.
The
authorities would just come into your home, grab your mother, your
brother, your dad, and take them away. No warning, no warrant, no
appeal. Thirty thousand people were disappeared that way, she
told me. This was in an interview three years ago, and Ruth Cox was
describing her childhood in Argentina under military dictatorship. Cox,
a teacher in Charleston, S.C., said families never learned what
happened to their loved ones. Or why. People were taken and that was
it. The government was not accountable.
.
My
first response was a vague pride that those kinds of things can't
happen here. My second response was to realize that my first
response was naive. These last years have provided a jolting education
in the sorts of things that can, indeed, happen here. Mass
surveillance, detention without access to courts, no right to confront,
or even know, the evidence against you, torture. And a government that
is not accountable. And here, a line from a Bruce Springsteen
song seems apropos. The flag flying over the courthouse means
certain things are set in stone. Who we are, and what we'll do and what
we won't. Sadly, the list of what we won't do has narrowed
dramatically since 2001.
.
http://seattletimes.nwsource.com/html/opinion/2004108070_pitts06.html
.
.
CIVIL
LIBERTIES UNDER THREAT IN MAJOR WESTERN COUNTRIES
January
1, 2008
.
As
the new year took hold, an international rights group said individual
privacy was under threat in the United States and across the European
Union, where surveillance and information-gathering measures had been
increasing in an effort to secure and control borders. Privacy
International, which surveyed 47 countries, said Greece, Romania and
Canada had the best privacy records the surveyed countries, while
Malaysia, Russia and China were ranked worst. The London based
organization said both Britain and the United States fell into the
lowest-performing group.
.
http://story.malaysiasun.com/
.
.
GASTARBEITER
AND CRIME - January 9, 2008
.
In
politically correct Germany, even pointing out facts can be
controversial, as Roland Koch discovered. We have too many
foreign juvenile criminals, the governor of the state of Hesse told the
daily Bild recently. He called for tougher punishments, including
deportation. Mr. Koch's straight talk prompted his political
opponents to accuse him of xenophobia -- a charge that stings in a
country still haunted by its Nazi past. Mr. Koch, a Christian Democrat,
is in a tough re-election race when voters in his state go to the polls
on January 27. His Social Democrat opponents claim he is just trying to
attract the bigot vote. Whatever his motives, the statistics back
up Mr. Koch. In Berlin, for example, one recent study shows that 70% of
repeat offenders are foreigners or children of immigrants. As in
much of Europe, Germany is struggling to integrate its immigrants,
especially Muslims, who constitute roughly 25% of the immigrant
population.
.
http://online.wsj.com/article/
.
EDITORS
NOTES:
Make no mistake about it. One of the major problems facing Europe
is the rash of immigrants who are placing pressures on the social
welfare systems, and in some cases, contributing to the crime situation
as well. This is not to say all immigrants are criminals, and the
same can be said of Latin American or other immigrants in the United
States as well. Meaning, many immigrants are hard working and law
abiding people. However, the crime and welfare statistics do not
lie. In Paris, it has been calculated that up to 40 percent of
the Muslim immigrant population living there (both first and second
generation immigrants) are bleeding the welfare system dry.
Again, not a negative commentary about immigration per say or any
particular group, but rather a comment regarding a state welfare
apparatus that allows for the newly arrived to game the system.
Can you blame them? Who would not want to move from a developing
country whereby they might have been surviving on a few dollars a day
in the past, to find that the new country allows for a mere pulse and
signature alone to qualify for a government check representing a
substantial increase in cash flow (from what they had before) or free
housing, free medical care, etc. ? It's a good deal, but the
problem is, can these countries continue to afford it?
.
Someone
is paying for all this, and we can surmise it is the honest, legally
employed middle class doing so. The point is, both in terms of
Europe and North-America, how much longer can this go on? With
dramatically large numbers of so-called baby boomers coming into
retirement and placing financial strains on the government payment
schemes on both
sides of the Atlantic, can these welfare
states continue economically in this fashion? Many of our
European and American clients have cited these concerns as one of the
reasons that they are relocating, and we have to believe this will only
continue (and get worse as a financial pressure point).
.
.
BUSINESS
IN 2008: A YEAR FOR THE BRAVE AND WEALTHY
By
John Gapper - December 26, 2007
.
Eleven
years ago, Alan Greenspan, then chairman of the Federal Reserve, mused:
How do we know when irrational exuberance has unduly escalated asset
values, which then become subject to unexpected and prolonged
contractions as they have in Japan over the past decade? The
answer was we do not; we only discover afterwards. But we do know when
exuberance has turned to fear and that is the mood in which many
businesses enter 2008.
.
As
this new year approaches, the US has had a perilous few months in
markets and the rest of the world is realizing how bad the contagion
could be. The UK is feeling the effects of the Northern Rock debacle
and there are fears of both a housing market crash and a falling
currency. The European Central Bank is still pouring liquidity into
financial markets. Only the Middle East and Asia motor smoothly
onwards, if anything faster. All of this brings varying degrees
of uncertainty and worry to business leaders for 2008, depending on
which industries and countries they are in. The common theme is that
the landscape is more treacherous than a year ago. It could also be a
year in which the brave and deep-pocketed thrive at others expense.
.
http://www.ft.com/
.
EDITORS
NOTES:
I take issue with the comment that: the brave and deep-pocketed
thrive at others expense. After all, is it really true that the
man (or woman) that did not live off of credit cards, foolishly use
their home as an ATM, or otherwise got themselves into a negative
financial situation can be said to have done so at the expense of
someone else? We think not, and if anything, such persons
probably denied themselves a newly leased BMW or some other such
indulgence in the process of keeping their own personal finances in the
black. However, this sort of thinking that the solvent is
culpable, is what we are concerned about. Which is to say, an
attack on the non-broke (or brave, to use the above journalists
terminology) to remedy the issues of others who participated in
so-called irrational exuberance. Once again, not a case of mean
spiritedness or cold heartedness, but rather what is fair and
honest. Should the pious person that gave up the new BMW and
instead stayed put with the ten year old Toyota now be forced to suffer
via higher taxation, inflation, or any other so-called remedies?
The result is that some segment of the population is economically
punished for sound behavior. Watch out for this theme of class
warfare going forward as politicians possibly look to placate the
foolish by plundering the so-called brave (and also as they look for
more revenue to pay for the mess they have made).
.
If
history is any guide, we will now see in 2008, a repeat of the old
political slogan: We Are All in This Together (misery loves
company). Indeed we now see political hacks trying to figure out
a way to legislate their way out of recession (as it would seem Ben
Bernanke cannot do it alone - surprised?) by coming up with so-called
financial stimulus money (and the call is for political bipartisanship,
in other words, we are all in this together). Who is going to pay
for this? They have already put the US government US$9 Trillion
Dollars in debt and already continue to spend more money than they take
in (in terms of tax revenues). Now they want to send out
government checks with money they do not have? How much trouble
are they in really, and who is going to pay? Will they try to
borrow even more money from the Chinese or Arabs?
.
Recessions
are all part of the natural business cycle in a free market
capitalistic economy. No one likes it, and it is not
pleasant. But, it is sort of like a good spring cleaning when
things go out of joint, and it signals a necessary change in behavior
by business and consumers. Sort of like when your body all of a
sudden develops a fever, it is a signal that you have an infection (and
you should probably go see a doctor, or start taking care of your
self). However, if you take fever reduction medication without
finding out why you have an infection (so you can cure the problem
instead of just masking the symptoms) then you are asking for more
trouble later on, in terms of your health. So it is with economic
policies as well.
.
.
OUTLOOK
WORST SINCE DOTCOM BUST
By
Chris Giles and Delphine Strauss - January 2, 2008
.
Britain
this year faces the most difficult economic conditions since the
Dot-com bubble burst, according to the Financial Times annual survey of
leading economists. It shows deepening pessimism about the impact of
the global credit squeeze. The survey of 55 top economists shows
confidence has tumbled from a year ago. The experts also fear that
compared with 2001-02, the scope for financial authorities to mitigate
any downturn is far more limited. Nearly nine in 10 think public
finances are not in good order so there is no leeway for discretionary
tax cuts or increases in public expenditure. The third most-mentioned
risk to the economy is inflation, limiting the ability of the Bank of
England to cut interest rates. Nearly two-thirds of the
economists - from the City, academia and including five former members
of the monetary policy committee - thought house prices would fall this
year (2008)
.
http://www.ft.com/
.
EDITORS NOTES:
This is right about the time that the cheeky fellow who wrote the
previous article in the Financial Times of early December (chastising
the Americans for their foolish behavior, financially speaking) needs
to take out his handkerchief (to wipe the egg off his face). Also
from the article: Inflation is seen as a threat, but a majority hope
the Bank of England will turn a blind eye to short-term inflationary
risks and cut interest rates, since they believe that the slowdown will
curb these pressures (end of quote). Say what? A majority of
people want the Bank of England to let inflation run wild because they
think it will solve the problem? Very surprising stuff coming
from a country that was the birth place of some of the worlds leading
economists over the last century.
.
.
TOP
ECONOMIST SAYS AMERICA COULD PLUNGE INTO RECESSION
By
Suzy Jagger- December 31, 2007
.
Losses
arising from America's housing recession could triple over the next few
years and they represent the greatest threat to growth in the United
States, one of the world's leading economists has told The Times.
Robert Shiller, Professor of Economics at Yale University, predicted
that there was a very real possibility that the US would be plunged
into a Japan-style slump, with house prices declining for years.
.
http://business.timesonline.co.uk/tol/business/economics/article3111659.ece
.
EDITORS
NOTES:
Could plunge, or already is in a recession? In a article
by Greg Robb titled: January
5, 2008Economists Say 2008 Will Be A Year To Forget:
.
Dean
Baker, co-director of the Center for Economic and Policy Research says
that The recession is likely to be a serious one, and he estimated
losses in prime mortgages will be two to three times the $160-$200
billion hit seen in the sub-prime sector. This, he said, will lead to
large losses at banks and difficulty for Fannie Mae and Freddie
Mac. Alistair Milne, a professor at the City University of
London's Cass Business School, says that the economy won't likely get
back on track until 2010 and will require more capital from overseas.
.
http://www.marketwatch.com/news/story/economists-say-2008-year-forget/
.
EDITORS
NOTES:
Well, one very interesting thing is to take note of where all the
bail-out money is coming from (note the quote from the above article
that says: will require more capital from overseas). Why is it
exactly that the money has to come from overseas? Is the US broke?
.
Merrill
Lynch recently reported cash infusions to the tune of about US$7
Billion, Citibank
writes off US$18 Billion worth of bad debt - and the rescue
money all coming from Singapore,
Kuwait and Saudi Arabia (and not US
entities). Nothing wrong with it, just an interesting thing to
see and how this may affect politics, etc. Which is to say,
instead of spying on US citizens, maybe the answer is to pressure the
Saudi's to stop funding religious schools that preach hatred and the
like. But wait, we cannot offend them, as we need their money to
bail out the bankrupt banks and brokerage firms. Never
mind. Hey, maybe the US can get an emergency loan from the IMF
(if they can qualify via stipulated reforms and higher taxes).
.
.
UNEMPLOYMENT
SOUNDS WARNING ABOUT ECONOMY
By
Peter S. Goodman and Michael M. Grynbaum - January 5, 2008
.
The
unemployment rate surged to 5 percent in December as the economy added
a meager 18,000 jobs, the smallest monthly increase in four years, the
Labor Department reported on Friday. Economists viewed the report
as the most powerful indication to date that the United States could
well be falling into a recessionary downturn. Evidence of widening
unemployment heightened anticipation that the Federal Reserve would
further cut interest rates this month, perhaps by an unusually large
half a percentage point, in a bid to prevent the economy from sliding
into the muck. The swift deterioration in the job market
resonated as a warning sign that troubles once confined to real estate
and construction are spilling into the broader economy, threatening the
ability of American consumers to keep spending with customary abandon.
.
http://www.nytimes.com/2008/01/05/business/05econ.html
.
EDITORS
NOTES:
Well, it's not all bad. Recent statistics suggest that the new
jobs are in the service industry, with health care leading (about 30 to
40 percent) followed by waitresses and bartenders (21 to 29
percent). So, if you can juggle a few bottles of Heineken on a
platter or change a bedpan with lightning speed, you might be alright.
.
.
PREPARE
FOR A GLOBAL ECONOMIC DOWNURN BUT NOT A DISASTER
By
Wolfgang Munchau - January 1, 2008
.
North
America remains the global economy's hub. Any assessment of the world
economy in 2008 depends on the likelihood, depth and length of a US
economic downturn and the magnitude of a global spillover. Any forecast
is thus contingent on how we answer the following three questions. Will
the financial crisis continue in 2008? Will inflation expectations rise
further? Last, will there be a disorderly process of global
rebalancing? If we answer all three questions with Yes, we should
prepare for a global depression. If the answer is No, the world economy
will have another good year. There are many intermediate scenarios as
well. I would answer the first question with an unqualified Yes.
The financial crisis will probably linger on for most of the year and
may get worse before it gets better. This is not really a sub-prime or
credit crisis, as it is frequently called. This is a banking crisis.
Economic history has taught us time and again that banking crises do
not simply go away.
.
http://www.ft.com/
.
EDITORS
NOTES:
Well the gentleman starts off well enough with the headline ending on a
positive note, but then he goes to say: If we answer all three
questions with Yes, we should prepare for a global depression. In
which case he adds: I would answer the first question with an
unqualified Yes. He also comments that: The housing markets in
the US and several other economies are headed for a severe
downturn. The
second risk is inflation for two reasons.
First, persistent high inflation could destabilize global government
bond markets, a rare pillar of stability in an uncertain financial
environment. Second, high inflation places constraints on monetary
policy. This in turn could make the downturn harder and longer, and the
banking crisis more severe. The problem for central banks is not the
rise in headline inflation rates, but the rise in inflationary
expectations (end of quote).
.
Where
do expectations comes from, if not from experience? In
addition, is it true that central banks should not be concerned
with the actual inflation they created? Whatever these people are
smoking, I think I want some (must be good stuff). Regardless, we
do agree with one thing, and that is, this housing mess is going to
take years to work itself out. However, as long as these dingbats
keep printing the money, or allowing cheap money to circulate by
keeping the interest rates artificially low (which has the same effect)
then who in their right mind would NOT have expectations
for higher inflation? Where is Paul Volker when you need him?
.
.
$100
OIL WILL HURT AT MORE THAN THE PUMP
By
Brett Clanton - January 6, 2008 - Houston Chronicle
.
From
light bulbs to golf balls, items tied to petroleum may cost you
extra. U.S. consumers are likely to feel the sting of $100 oil
soon, and in perhaps more ways than they realize. More directly
ominous for consumers, AAA reported Friday that the average price for a
gallon of regular gasoline nationwide was $3.07, up from $2.32 a year
ago. In Houston, the average price at the end of the week was $2.92, up
from $2.18 last January. Higher gasoline prices likely will pinch
consumers most as bigger crude costs are passed through to drivers,
analysts said. Fuel costs also could push up airfares. But if oil
prices stay up, Americans also may see higher prices for a host of
other petroleum-derived products, from light bulbs and paint to golf
balls and deodorant.
.
http://www.chron.com/disp/story.mpl/front/5431391.html
.
EDITORS
NOTES:
We surmise that the American Oil companies are trying to keep a lid on
retail gasoline price increases temporarily, that is, in consideration
of the current US Presidential election. With that said, they may
have no choice but to bump up prices sometime in the second quarter,
but regardless, with oil at US$90 or above, the retail price at the
pump probably should be somewhere about US$7 per gallon. A January
6 article
from the Courier
Post (New
Jersey) reported that: Between June and December, increased costs
for fuel and food, due, in part to higher shipping expenses, drained
a combined $45 billion in discretionary income from American households. Inflation is
confiscation by stealth, it always has been, and always will be.
.
.
DOUBLE
OR NOTHING: TRADERS BET ON OIL REACHING $US200 A BARREL BY YEAR'S END. By Grant Smith
- January 8, 2008
.
The
fastest-growing bet in the oil market these days is that the price of
crude will double to $US200 a barrel by the end of the year.
Options to buy oil for $US200 on the New York Mercantile Exchange rose
10-fold in the past two months to 5533 contracts, a record increase on
any similar period. The contracts, the cheapest way to speculate in
energy markets, have appreciated 36 per cent since early December, with
crude oil futures reaching a record $US100.09 on January 3.
.
While
analysts at Merrill Lynch and UBS say the slowing US economy will lead
to the biggest drop in prices since 2001, the options show some traders
expect oil to rise for a seventh consecutive year. Demand will increase
2.5 per cent this year, the International Energy Agency (IEA) says. US
oil inventories fell to a three-year low on December 28. Production
from Mexico is declining and Saudi Arabia is behind schedule in opening
its newest field.
.
One
hundred dollars a barrel is actually 14.9 cents a cup, so we're still
talking about oil being remarkably cheap, said Matthew Simmons, the
chairman of Simmons & Co International, an investment bank that
focuses on energy. Inventories are tight as a drum and I don't see how
we get out of this box, he said in an interview on Bloomberg television
last week. Demand clearly isn't starting to slow down.
World consumption will rise to 87.8 million barrels a day this year,
2.1 million more than last year, or about the amount that Nigeria
supplies, says the IEA, which advises oil-consuming nations. Demand
from China alone will rise 5.7 per cent to 8 million barrels a day as
imports expand to support an economy that is likely to grow 11 per cent.
.
http://business.smh.com.au/
.
.
CITY
RETIREMENT VILLAGE DOUBLES SENIORS FEES
By
Alexandra Zabjek, The Edmonton Journal - January 5, 2008
.
Life
at a pioneering resort-style retirement community has turned into a
financial disaster for dozens of seniors at a local condominium
complex. Residents of the upscale Touchmark at Wedgewood, at
184th Street and Lessard Road in southwest Edmonton, were notified last
week that their living expenses would jump as much as 100 per cent or
more in the coming months. The cost increases have shocked and
outraged many at the facility.
.
The
mental and emotional stress cannot be discounted, said Inese Clark,
whose 92-year-old mother has lived at Touchmark since December
2006. People do budget planning and estate planning, they
extrapolate the amount of money they have and say, Can I manage this
even with reasonable increases? she said. Then a year later, to
receive a 100-per-cent increase? That puts enormous hardship on
people. More than 100 people -- many using canes, walkers,
scooters and oxygen tanks -- attended a meeting Friday morning at
Touchmark. However, it was the sons, daughters, nieces and nephews of
residents who dominated the meeting with questions about the cost
increases. One woman said her mother's expenses will rise 180 per
cent. Another said her parents face a 225-per-cent increase. Another
resident's living costs will go to $2,000 a month from about $1,000.
.
http://www.canada.com/edmontonjournal/
.
EDITORS
NOTES:
One of the top growth industries (if you want to call it that) in
Mexico is nursing homes for elderly gringos. As cost of living,
maintenance fees and the like escalate in the US and Canada, there is
an outsourcing of sorts going on, regarding the aged heading south of
the border and often enough, it is the children sending parents there
as a cost effective alternative. However, there is a better way,
although it involves expatriation just the same, but the result is that
the family stays together and the children get to grow up with their
grand-parents. In short, the idea involves the purchase of a
3,000 square foot home on a property in Ecuador, the Dominican
Republic, or some similar locale, whereby you can have an entire
household staff (cook, maid, chauffer, nanny) for what it costs to
cover the monthly costs in these North-American based nursing
homes. The kids live well for less, and the elderly parents are
not alone in some institution located miles away. In summary,
expatriating to another country is not about making a political
statement, nor an act of treason. It is about economic survival,
plain and
simple.
.
.
COST
OF LIVING TO STRAIN AREA RESIDENTS
By
Bonnie Pfister, Pittsburgh Tribune Review - January 1, 2008
.
Everything's
going up and up and up, except my salary, says Deborah Jomisko, who is
trying to counter the rising cost of heating her Knoxville home.
Soaring natural gas prices in the past two years have doubled the cost
of heating her Knoxville home to $159 last month. Her 1970 Chevy Monte
Carlo needs $2,000 worth of repairs, so she's relying on Port Authority
buses, whose fares are about to go up. Jomisko said she lost her
job as an optical technician when her boss closed his practice in
March. Opportunities for a woman in her 50s have been scarce.
Everything's going up and up and up, except my salary, said Jomisko,
who worked through the holidays as a cashier at PPG Place ice rink.
(Gasoline) is going up, and food is going up. Meat, milk, eggs; I'm
buying the same things every week, but they're costing me more.
.
http://www.pittsburghlive.com/x/pittsburghtrib/news/cityregion/s_545349.html
.
.
COST
OF LIVING IN SIOUX FALLS GOES UP - January 1, 2008
.
With
the new year, the cost of living in Sioux Falls is going up.
Operating the city's utilities have become more expensive with the
city's constant growth and higher fuel prices. Sioux Falls Public
Works Director Mark Cotter says utility expenses for consumers will
increase to just over a hundred dollars extra over the next year.
Waste-water rates are going up by nearly 20%. In addition, the
landfill-tipping fee is going up for the city by 22%. And if your
electric bill is from the city, a 16% increase means you'll pay an
extra $3.31 every month to keep your lights on.
.
http://www.keloland.com/News/
.
EDITORS
NOTES:
Ms. Anne Kates Smith has written a recent article for (personal finance
magazine) whereby she reports that: Food and beverage prices are
rising at a 4.4% annual rate. But Kiplingerdairy
prices are up 13% (and 26% for a
gallon of whole milk alone), thanks to price supports and brisk exports
of powdered milk. Meanwhile, meat prices are up 6%, and bakery
products are up 4.6% because corn is being converted into ethanol
instead of animal feed, muffins and sweetener. We haven't seen an
increase of this magnitude in grocery prices since 1990, says Bureau of
Labor Statistics economist Patrick Jackman.
.
Where
is this all going? A severe skewing of incomes, with basically
two tiers economically speaking. Meaning, some in the middle
class are moving up, but a whole lot more are moving down. Couple
that with increased tax collection (especially for social welfare
programs, such as social security) and you can easily understand why
those with a few dollars and common sense are heading for the exit
sign. That in turn motivates politicians to try and stop people
from leaving with their money (instead of trying to fix the reasons why
people are leaving in the first place) and thus the vicious cycle
ensues. Sort of like watching a movie whereby you already know
the ending (because you read the book before they made it into a
film).
.
.
BUILDING
BOOM FUELED BY DRUG MONEY
By
Andrew Beatty - December 31, 2007
.
The
shiny skyscrapers that soar above Panama City's coast and loom over the
small Central American capital give it a skyline more suited to an
Asian powerhouse like Hong Kong or Singapore. While a sub-prime
mortgage crisis batters the United States, construction has been
booming in Panama. According to the most ambitious construction plans,
Panama was to have been home to nine of Latin America's 10 tallest
buildings by the end of the decade. But the lights are off in
many of the luxury apartments, new buildings sit empty, and suspicion
is growing that Panama's property boom may turn out to be a bubble
built by speculators on South American drug money. Real estate
agents say the large number of temporary residents in the country is
the reason for the city's dim skyline at night. U.S. anti-drug
officials say a more likely reason is that Colombian drug cartels use
the real estate sector to launder money.
.
Around
11,000 apartments are forecast to come on the market in Panama City
before the end of the decade, according to estate agent Sam Taliaferro.
More luxury apartments could be built in Panama over the next few years
than the number built in Miami between 1995 and 2005. While
Panama is a major shipping route and the canal is undergoing a $5
billion expansion, the country's economy remains small and few
Panamanians say developers can justify the need for so many
skyscrapers. The increasing numbers of Americans who retire in
Panama head for the country's cooler mountain region, for
instance. Even without the suspected drug money, real estate
agents say speculators are creating a dangerous bubble that is pushing
up rents throughout the country, where 40 per cent of the population
lives on less than $2 a day, and could litter Panama City with
half-finished, abandoned buildings.
.
http://www.theglobeandmail.com/
.
EDITORS
NOTES: We
call your attention to this news item for a few reasons, and NOT
necessarily to agree with the Canadian journalist who wants to offer an
explanation that Panama's growth in the real estate sector is from
illicit funds (although if you want to be honest about it, Miami was
certainly re-built on drug money in the 1980's and real estate always
has been the number one venue for laundry operations, regardless of the
location, and not the banking industry exclusively or necessarily).
.
Which
is to say, first off we wish to highlight our previous comments about
speculation driving up the prices in some foreign real estate markets
(as mentioned in our last newsletter) and to also call attention to
whom the buyers are (foreigners). Local real estate agents in
Panama stress that many of the residents are temporary or seasonal
occupants (we can says speculators), where as US officials are of
course quick to offer that vendors of unregistered recreational
pharmaceuticals are to blame. Of course, that must be it.
What else could it be? I mean, who in their right mind would want
to invest or live in Panama other than those involved with the drug
trade, right? Maybe, just maybe, it is not recreational
pharmaceutical funds but rather all those Americans we told you about
previously, who were playing Three Card Monty with home equity loans on
their US real estate, who were speculating in real estate
elsewhere. It seems to be a bit too timely or convenient that all
of a sudden all this neatly corresponds with the sub-prime issues in
the US. After all, I was always lead to believe that businesses
involving drugs, prostitution and gambling were recession proof and
uncorrelated to other things going on in the economy, but I could be
wrong. Never the less, we do find the explanation to be a bit
incredulous. However, assuming for just one moment that this
comment about drug money is correct, once again we can revert back to
our previous comments of the housing or building boom in these markets
being funded with CASH. While there may very well be an excess of
new buildings (and apartments by reasoning) we can at the same time
predict NO credit crisis, mortgage crisis or rash of home foreclosures
either. Cash is cash, regardless of where it comes from. It
is borrowed money that always leads to problems.
.
In
any event, just to review the US real estate scenario for 2008, it is
reported that in Santa Cruz County (California) foreclosures are up 250
percent and foreclosure sales, up 404 percent. In
Monterey County, foreclosures are
up 450 percent and foreclosure
sales a whopping 916 percent. In San Benito
County, foreclosures are up 300 percent. I wish these numbers
were a mistake, but stuff like this you just couldn't make up no matter
how vivid your imagination. Maybe that's all the fault of the
drug peddlers too.
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