Whitney: Pain Is Far from Over for U.S. Banks
May 27th, 2008Via: MarketWatch:
“As we see no near- or medium-term comeback in securitization volumes, we believe losses will only accelerate further and far worse than even the most draconian estimates,” according to Whitney. “Due to continued deterioration in consumer liquidity, we are raising our loss expectations significantly for the group and lowering our earnings estimates significantly.”
Some U.S. Farms Outsourced to Mexico
May 27th, 2008Via: AP:
Antonio Martinez used to pay smugglers thousands of dollars each year to sneak him into the United States to manage farm crews. Now, the work comes to him.
Supervising lettuce pickers in central Mexico, Martinez earns just half of the $1,100 a week he made in the U.S. But the job has its advantages, including working without fear of immigration raids.
Martinez, now a legal employee of U.S.-owned VegPacker de Mexico, is exactly the kind of worker more American farm companies are seeking. Many have moved their fields to Mexico, where they can find qualified people, often with U.S. experience, who can’t be deported.
“Because I never moved my family to the U.S., I was always alone there,” said Martinez, 45, who could never get a work permit, even after 16 years in agriculture in California and Arizona. “When I got the opportunity to be close to my family, doing similar work, I didn’t even have to think about it.”
American companies now farm more than 45,000 acres of land in three Mexican states, employing about 11,000 people, a 2007 survey by the U.S. farm group Western Growers shows.
There were no earlier studies to document how much the acreage has grown. But U.S. direct investment in Mexican agriculture, which includes both American companies moving their operations to Mexico and setting up Mexican partnerships, has swelled sevenfold to $60 million since 2000, Mexico’s Economy Department told The Associated Press.
Major corporations such as Archer Daniels Midland Co. and Bunge have invested across Latin America for decades, particularly in countries like Brazil, where agribusiness is booming.
Some small farmers have cultivated parts of Mexico for much longer, seeking to secure year-round supplies of fruits and vegetables, while taking advantage of cheap labor and proximity to the U.S.
But the latest move south has been fueled by something new, farmers say: a way to continue to deliver cheap, fresh farm goods amid the current U.S. political standoff over an estimated 12 million undocumented immigrants, the majority from Mexico.
Recent Immigration and Customs Enforcement raids have targeted major agricultural producers, including Del Monte Fresh Produce in Portland, Oregon, and several large packing plants across the nation _ scaring away immigrants and persuading many agricultural employers to clean up their hiring practices.
“Employers can’t find legal workers to replace this huge number of illegal workers,” said James Holt, an agricultural labor economist and independent consultant based in Washington. “Their only option is to go where the workers are.”
Many of the growers, once based in California’s Salinas Valley, are also heading south to escape high land prices and water shortages. Mexico is closer to eastern U.S. markets than California, they say. Shipping times to Atlanta are a day shorter from Mexico’s central Guanajuato state.
Not everyone in Mexico has welcomed U.S. companies. Mexican farmers complain that they have driven up land rental prices. Many local growers worry they can’t compete against big, foreign firms, said Felipe Sanchez, president of a farmers group in Guanajuato state.
“How can a ranch that farms 70 acres compete with a company that came to farm 10,000 acres?” Sanchez said. “We’ll become laborers on our own ranches.”
Farm workers at U.S. companies in Mexico make two or three times Mexico’s minimum wage of $4.80 a day. But they still earn far less than the average $9.60 an hour that field workers in the United States made in January 2008, according to the U.S. Department of Agriculture.
Juan Antonio Linarez, 19, makes a tenth of his U.S. roofing income at Taylor Farms de Mexico’s vegetable cooling plant in Guanajuato. But he has health insurance and can live nearby with his family _ without the dangerous and expensive trek across the border.
Some experts argue that farmers simply refuse to raise U.S. wages to compete with other industries, something they say would help ease the labor crunch.
As the United States heads into a recession, more native-born workers might consider agricultural work if wages were high enough, said Harley Shaiken, director of the University of California at Berkeley’s Center for Latin American Studies.
“Labor shortage always is a question of at what pay rate,” Shaiken said. “Very often, if the wages are artificially low, it will be very difficult to find a work force.”
But Steve Scaroni said he did offer higher wages and still couldn’t find a steady work force in the U.S. Scaroni owns VegPacker, a California and Guanajuato-based company that grows lettuce, celery, cauliflower and other vegetables. VegPacker has struggled after forking out millions of dollars to launch its Mexico division two years ago.
The problem is that cheaper labor in Mexico often is offset by lower productivity and high training costs, especially when it comes to enforcing U.S. food-safety standards.
“The only thing that’s cheaper down here is diesel fuel and the labor per day,” Scaroni said. “My productivity is down 40 percent” from U.S. levels.
Every Adult in Britain Should be Forced to Carry ‘Carbon Ration Cards’
May 27th, 2008I have an idea about this carbon sinning nonsense. It goes back to Escape from Freedom by Erich Fromm. In short: Because modern society destroys human identity, mindless conformity to all order of fascist, technocratic prison policies gives the masses a sense of belonging to something.
Religions worked for a while. The vengeful sky god was going to get you for sinning. In the olden days, God was constantly obsessed with what you did with your wee-wee. But the state needs something else to keep people on their toes now. We’re in the midst of fearing “the terrorists” now, but if you’ve ever seen a “Christian” who was paralyzed by all the sin in the world, change the word “sin” to “carbon” and you’ve got your wild eyed fart taxers. It’s the same animal. The allegedly rational, atheist, environmentalists are, like Fromm predicts, looking to sell themselves to another fascist overlord. This obsession with carbon is THE new religion and all purpose justification for political control.
You will know the fascists by their alleged solutions. Do their solutions free you or imprison you? Centralize power or distribute power? Build fellowship or resentment?
All fascists, no matter what the stripe, will offer up bad solutions to problems they created in the first place. Regardless of the nature of global warming, a national “ration card” is NOT the solution.
Or, maybe it is, if Fromm is correct.
Via: Daily Mail:
Every adult should be forced to use a ‘carbon ration card’ when they pay for petrol, airline tickets or household energy, MPs say.
The influential Environmental Audit Committee says a personal carbon trading scheme is the best and fairest way of cutting Britain’s CO2 emissions without penalising the poor.
Under the scheme, everyone would be given an annual carbon allowance to use when buying oil, gas, electricity and flights.
Anyone who exceeds their entitlement would have to buy top-up credits from individuals who haven’t used up their allowance. The amount paid would be driven by market forces and the deal done through a specialist company.
MPs, led by Tory Tim Yeo, say the scheme could be more effective at cutting greenhouse gas emissions than green taxes.
But critics say the idea is costly, bureaucratic, intrusive and unworkable.
The Government says it supports the scheme in principle, but warns it is ‘ahead of its time’.
The idea of personal carbon trading is increasingly being promoted by environmentalists. In theory it could be used to cover all purchases – from petrol to food.
For the scheme to work, the Government would need to give out 45million carbon cards – each one linked to a personal carbon account. Every year, the account would be credited with a notional amount of CO2 in kilograms.
Every time someone makes a purchase of petrol, energy or airline tickets, they would use up credits. A return flight from London to Rome would, for instance, use up 900kg of CO2 credits, while 10 litres of petrol would use up 23kg.
Related: “Green Confessions” to Help Eco-Sinners Find Forgiveness
They Rule the World: A Shadowy Organization Is in Power, and It’s Made Up of the Very, Very Rich
May 27th, 2008This is core lunatic fringe stuff, wrapped in tinfoil. It’s also The Washington Post.
What’s your take on the Them’s coming out party?
As someone who has followed this type of information for about twenty years, I don’t know what to make of the mainstreaming of this… area of inquiry. You might think that all of us foilheads would be smug and chortling our I-told-you-soes into our beer.
Not me.
I’m thinking, “Oh for f*&@’$ sake, now what!?”
Via: Washington Post:
SUPERCLASS The Global Power Elite and the World They Are Making
By David Rothkopf
Reviewed by Anne-Marie Slaughter
Go to www.theyrule.net. A white page appears with a deliberately shadowy image of a boardroom table and chairs. Sentences materialize: “They sit on the boards of the largest companies in America.” “Many sit on government committees.” “They make decisions that affect our lives.” Finally, “They rule.” The site allows visitors to trace the connections between individuals who serve on the boards of top corporations, universities, think thanks, foundations and other elite institutions. Created by the presumably pseudonymous Josh On, “They Rule” can be dismissed as classic conspiracy theory. Or it can be viewed, along with David Rothkopf’s Superclass, as a map of how the world really works.
In Superclass, Rothkopf, a former managing director of Kissinger Associates and an international trade official in the Clinton Administration, has identified roughly 6,000 individuals who have “the ability to regularly influence the lives of millions of people in multiple countries worldwide.” They are the “superclass” of the 21st century, spreading across borders in an ever thickening web, with a growing allegiance, Rothkopf argues, to each other rather than to any particular nation.
Rothkopf’s archetypal member of the superclass is Blackstone Group executive Stephen Schwarzman, who is not only fabulously wealthy, but also chairman of the Kennedy Center, a board member of the New York Public Library, the New York City Ballet, the Film Society of Lincoln Center and the New York City Partnership. These boards, along with the over 100 businesses Blackstone has invested in, the other business councils and advisory boards he sits on, and his Yale and Harvard education, mean that Schwarzman is only one or two affiliations away from any center of power in the world. Rothkopf actually traces the “daisy chain” of Schwarzman’s connections through his board memberships — linking him to Ratan Tata, one of India’s richest men, former Mexican president Ernesto Zedillo and many others. It is these links that create access that translates to influence and determines how the levers of power are pulled.
Fame alone doesn’t get you into the global power elite: Tom Cruise and Katie Holmes are out while Angelina Jolie and Bono are in. High office is generally enough for politicians and even their spouses, but membership in the superclass can be fleeting — Mikhail Gorbachev and Cherie Blair are now out, while Henry Kissinger and Bill Clinton are still in. Rothkopf harps on the Pareto principle of distribution, or the “80/20 rule,” whereby 20 percent of the causes of anything are responsible for 80 percent of the consequences. That means 20 percent of the money-makers make 80 percent of the money and 20 percent of the politicians make 80 percent of the important decisions. That 20 percent belongs to the superclass.
On closer inspection, however, Rothkopf has no actual methodology for determining who is in and who is out. Each chapter identifies individuals who are said to count in a field, conclusions backed up by trendspotting and anecdotes about Rothkopf’s encounters at Davos and New York dinner parties that make the reader feel vaguely voyeuristic. When Rothkopf ventures away from his core expertise in politics and finance, and into such subjects as asymmetrical warfare, mega-churches and freemasonry, the pastiche-like quality of his research becomes evident.
Still, Superclass is often thought-provoking. For one thing, it is as much about who is not part of the superclass as who is. As I read Rothkopf’s chronicles of elite gatherings — Davos, Bilderberg, the Bohemian Grove (all male), Fathers and Sons (all male) — I was repeatedly struck by the near absence of women. Fortune magazine’s annual Most Powerful Women Summit, the only elite gathering I know of that is restricted to women, didn’t even rate a mention. And indeed, when Rothkopf summarizes “how to become a member of the superclass,” his first rule is “be born a man.” Only 6 percent of the superclass is female.
Superclass is written in part as a consciousness-raising exercise for members of the superclass themselves. Rothkopf worries that “the world they are making” is deeply unequal and ultimately unstable. He hopes that the current global elite will use their power to do more than egg each other on to high-profile philanthropy. Elites in radically unequal countries such as Chile, for instance, might decide to open their cozy circles of power to allow the emergence of a genuine middle class. New York bankers might realize that they can no longer peddle loans to developing countries in good times but then pressure the U.S. Treasury and the International Monetary Fund to bail out those same governments when they suddenly default on their debts (ensuring, of course, that the bankers get paid). The agribusinesses that reap billions from domestic subsidies in developed countries might consider the longer-term value of trade rather than aid for countries at the bottom of the global food chain.
Perhaps. But it’s likely to take more than exhortation. In the words of former Navy Secretary John Lehman, “Power corrupts. Absolute power is kind of neat.” Why would the superclass want to give it up?
U.S. Residents in Military Brigs? Government Says It’s War
May 27th, 2008Via: AP:
If his cell were at Guantanamo Bay, the prisoner would be just one of hundreds of suspected terrorists detained offshore, where the U.S. says the Constitution does not apply.
But Ali Saleh Kahlah al-Marri is a U.S. resident being held in a South Carolina military brig; he is the only enemy combatant held on U.S. soil. That makes his case very different.
Al-Marri’s capture six years ago might be the Bush administration’s biggest domestic counterterrorism success story. Authorities say he was an al-Qaida sleeper agent living in middle America, researching poisonous gasses and plotting a cyberattack.
To justify holding him, the government claimed a broad interpretation of the president’s wartime powers, one that goes beyond warrantless wiretapping or monitoring banking transactions. Government lawyers told federal judges that the president can send the military into any U.S. neighborhood, capture a citizen and hold him in prison without charge, indefinitely.
There is little middle ground between the two sides in al-Marri’s case, which is before a federal appeals court in Virginia. The government says the president needs this power to keep the nation safe. Al-Marri’s lawyers say that as long as the president can detain anyone he wants, nobody is safe.
Chilean Judge Orders Arrest of Pinochet-Era Soldiers and Secret Police
May 27th, 2008See:
The Pinochet File: A Declassified Dossier on Atrocity and Accountability by Peter Kornbluh
Via: Guardian:
A Chilean judge has ordered the detention of almost 100 former soldiers and secret police officers from General Augusto Pinochet’s regime as part of investigations into human rights abuses, according to reports.
Among the 98 held are former employees of Pinochet’s notorious Dina intelligence service, which ran a series of secret prisons where leftwingers and other opponents were tortured and killed, Reuters said, citing unnamed judicial sources.
Judge Victor Montiglio ordered the arrests for alleged abuses during Pinochet’s 1973-1990 dictatorship. Montiglio is examining the kidnapping and murder of 42 people during Operation Colombo, a campaign against opponents of the regime in its early days.
“This is excellent news, because Operation Colombo was also a case in which General Pinochet’s immunity from prosecution was stripped, and given the number of victims, is an emblematic case,” Sergio Laurenti, the head of Amnesty International in Chile, told Reuters.
It was now important that Chile’s security forces cooperate with the investigation as there had been a “lack of cooperation” from the police and military before, he added.
Around 3,000 people died or vanished during Pinochet’s rule while almost 30,000 were tortured and about 200,000 fled.
Steepest Decrease in Driving Ever Recorded in U.S.
May 27th, 2008Via: CNN:
At a time when gas prices are at an all-time high, Americans have curtailed their driving at a historic rate.
The Department of Transportation said figures from March show the steepest decrease in driving ever recorded.
Compared with March a year earlier, Americans drove an estimated 4.3 percent less — that’s 11 billion fewer miles, the DOT’s Federal Highway Administration said Monday, calling it “the sharpest yearly drop for any month in FHWA history.” Records have been kept since 1942.
According to AAA, for the first time since 2002, Americans said they were planning to drive less over the Memorial Day weekend than they did the year before.
Google, Chevron, Goldman Sachs Build Mirrors in Desert to Beat Coal With Solar
May 27th, 2008For years, I wanted to believe that Peak Oil could bring this horror show down. My problem, of course, was that I couldn’t ignore simple, observable realities and the fact that evil people have many plans up their sleeves… Unfortunately, this horror show grinds on, whether we want it to, or not.
—Shell’s $30 per Barrel Oil Shale Process
Maybe the shrill energy scarcity bloggers know more than Google, Chevron and Goldman Sachs, but I strongly doubt it.
Via: Bloomberg:
Along a dusty two-lane highway in California’s Mojave Desert, 550,000 mirrors point skyward to make steam for electricity. Google Inc., Chevron Corp. and Goldman Sachs Group Inc. are betting this energy will become cheaper than coal.
The 1,000-acre plant uses concentrated sunlight to generate power for as many as 112,500 homes in Southern California. Rising natural gas prices and emissions limits may make solar thermal the fastest-growing energy source in the next decade, say backers including Vinod Khosla, the founder of computer maker Sun Microsystems Inc.
Costs for the technology will fall below coal as soon as 2020, the U.S. government estimates. JPMorgan Chase & Co. and Wells Fargo & Co. invested last year in the biggest solar plant built in a generation; Chevron and Google are funding research; and Goldman Sachs is seeking land to lease as demand outpaces wind turbines and geothermal.
“Solar thermal can provide a substantial amount of our power, more than 50 percent,” says Khosla, who along with the Menlo Park, California, venture capital firm Kleiner Perkins Caufield & Byers led a $40 million investment in solar power producer Ausra Inc. “This is an industrial-strength solution.”
Related: Kleiner Perkins: Al Gore and Colin Powell, Together at Last to Save the Planet
Whither the Price of Oil?
May 26th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
This is the best read on oil that I’ve found in a while. It also, weirdly and frighteningly, correlates to my interpretation of the chicken entrails in Oil Correction Likely.
Via: TradingGurus:
Jakab Spencer noted in his always interesting Dow Jones column that there is a disconnect between the New York Stock Exchange and the New York Mercantile Exchange, just one mile apart. The NYSE is pricing in $75 oil in oil stocks, while the futures market is surging over $135, and there are calls for near-term $150-a-barrel oil. The stock market is telling us that oil, at least in futures terms, is in a bubble.
…
Where Are All the Tankers?
For a few weeks now, observers have noticed that Iran is leasing tankers and storing oil in them. At about $140,000 a week or so, that is expensive storage. At first, conspiracy theorists were wondering if they were preparing for some kind of war or attack. But more conventionally, it may be they are having problems selling their oil. Their oil is not very high-quality, and there are only a few places that can take it and refine it. India, China, and the US are among the countries with refineries that can take Iranian oil. (And yes, George Friedman of Stratfor tells me some of it does end up in the US from time to time.)
India’s refiners are telling Iran they no longer want their oil, preferring the higher-quality oil that is readily available in the area. So Iran has to decide whether to send it to China or “repackage” it so that it can end up in the US, while they try to get refiners in India to change their minds. Thus, they are leasing tankers to store the oil they are pumping.
I called George about six this evening and asked him about the Iranian situation, as that is a lot of oil that could come on the market at some point, as well as a possible reason that oil supplies are down. George has analysts on top of this situation.
He told me, “John, it’s more interesting than that. It is not just Iran. Today we started checking on how many tankers Iran had, and soon discovered that there is a serious tanker shortage. Lease prices have soared in the past few weeks. It is clear there are a lot of speculators betting that oil is going to rise to $150 or so and are willing to pay very high prices for keeping the oil on the seas waiting for higher prices. It is a speculative boom.”
He then told me about flying into New York in the early ’80s. Outside the harbor were 30 or so tankers just sitting, waiting for prices to continue to increase as they had been doing for some time. When they did not, they all tried to get into the harbor at the same time, and of course they couldn’t. It was the top of the market. Prices dropped, and the owners of the oil had to go to the futures market to hedge what they could. I had heard that story, but George saw it with his own eyes.
Almost everyone (except the stock market) is convinced oil is going higher in the near term. As I noted above, this week’s rally was partially due to short covering by large institutions and companies which had sold production far into the future at much lower prices. They finally threw in the towel and took off their hedges.
Related: Soros: Oil Is a Bubble
Debian OpenSSL Security Flaw
May 26th, 2008Hint to 99.98% of you reading this: Skip to the next story.
Reader GP submitted Alarming Open-Source Security Holes, by Simson Garfinkel, which is a human readable version of this Debian Security Advisory:
Luciano Bello discovered that the random number generator in Debian’s openssl package is predictable. This is caused by an incorrect Debian-specific change to the openssl package (CVE-2008-0166). As a result, cryptographic key material may be guessable.
This is a Debian-specific vulnerability which does not affect other operating systems which are not based on Debian. However, other systems can be indirectly affected if weak keys are imported into them.
It is strongly recommended that all cryptographic key material which has been generated by OpenSSL versions starting with 0.9.8c-1 on Debian systems is recreated from scratch. Furthermore, all DSA keys ever used on affected Debian systems for signing or authentication purposes should be considered compromised; the Digital Signature Algorithm relies on a secret random value used during signature generation.
The first vulnerable version, 0.9.8c-1, was uploaded to the unstable distribution on 2006-09-17, and has since that date propagated to the testing and current stable (etch) distributions. The old stable distribution (sarge) is not affected.
Affected keys include SSH keys, OpenVPN keys, DNSSEC keys, and key material for use in X.509 certificates and session keys used in SSL/TLS connections. Keys generated with GnuPG or GNUTLS are not affected, though.


