Public Universities Face “Funding Cliff”
July 10th, 2010Via: Bloomberg:
Many public universities face “dramatic declines” in funding and possible ratings downgrades as states cut and delay annual appropriations, Moody’s Investors Service said.
States are reducing funding to public universities by as much as 6 percent this fiscal year compared with last, Moody’s analysts led by Dennis Gephardt wrote in a report dated today. Institutions rated A2 and A3, five and six steps below the top grade, face the greatest risk of downgrade, New York-based Moody’s said.
“Many U.S. public universities face dramatic declines in state funding on a scale that surpasses past experience,” the analysts wrote. States spent a combined $90 billion on public universities in fiscal 2009, which amounted to about 30 percent of the revenue at the institutions, down from 50 percent two decades ago, according to Moody’s.
Public colleges and universities also face a potential “funding cliff” beginning in fiscal 2012 when stimulus funds are no longer available, the analysts wrote. In 20 states, money from the American Recovery and Reinvestment Act made up more than 4 percent of budgeted support for public universities in fiscal 2010.
Thousands of Old Wells Possibly Leaking in Gulf of Mexico?
July 10th, 2010Via: AP / CBS:
More than 27,000 abandoned oil and gas wells lurk in the hard rock beneath the Gulf of Mexico, an environmental minefield that has been ignored for decades. No one – not industry, not government – is checking to see if they are leaking, an Associated Press investigation shows.
The oldest of these wells were abandoned in the late 1940s, raising the prospect that many deteriorating sealing jobs are already failing.
The AP investigation uncovered particular concern with 3,500 of the neglected wells – those characterized in federal government records as “temporarily abandoned.”
Regulations for temporarily abandoned wells require oil companies to present plans to reuse or permanently plug such wells within a year, but the AP found that the rule is routinely circumvented, and that more than 1,000 wells have lingered in that unfinished condition for more than a decade. About three-quarters of temporarily abandoned wells have been left in that status for more than a year, and many since the 1950s and 1960s – even though sealing procedures for temporary abandonment are not as stringent as those for permanent closures.
As a forceful reminder of the potential harm, the well beneath BP’s Deepwater Horizon rig was being sealed with cement for temporary abandonment when it blew April 20, leading to one of the worst environmental disasters in the nation’s history. BP alone has abandoned about 600 wells in the Gulf, according to government data.
There’s ample reason for worry about all permanently and temporarily abandoned wells – history shows that at least on land, they often leak. Wells are sealed underwater much as they are on land. And wells on land and in water face similar risk of failure. Plus, records reviewed by the AP show that some offshore wells have failed.
Asked in multiple requests over several weeks how often abandoned wells have failed, the U.S. Environmental Protection Agency acknowledged Tuesday – as this story was being released – that it has had to deal with leaks at abandoned wells in shallow state waters of Louisiana and Texas. The U.S. Bureau of Ocean Energy Management, Regulation and Enforcement – which oversees wells in federal waters – also acknowledged Tuesday that it has dealt with “a few” failed abandoned wells farther out in the Gulf. But the information was released only through the public affairs offices and neither agency provided experts for follow-up.
Experts say abandoned wells can repressurize, much like a dormant volcano can awaken. And years of exposure to sea water and underground pressure can cause cementing and piping to corrode and weaken.
“You can have changing geological conditions where a well could be repressurized,” said Andy Radford, a petroleum engineer for the American Petroleum Institute trade group.
Biggest Defaulters on Mortgages Are the Rich
July 10th, 2010Via: New York Times:
The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.
Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.
More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.
By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.
Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.
China Cuts Rare Earth Export Quota 72%
July 10th, 2010In other news: Afghan Mineral Deposits Actually Worth $3 Trillion, Not $1 Trillion.
Via: Bloomberg:
China, the world’s largest rare- earths producer, cut export quotas for the minerals needed to make hybrid cars and televisions by 72 percent for the second half, raising the possibility of a trade dispute with the U.S.
Shipments will be capped at 7,976 metric tons, down from 28,417 tons for the same period a year ago, according to data from the Ministry of Commerce yesterday.
Rising production of hybrid cars and music players such as Toyota Motor Corp.’s Prius and Apple Inc.’s iPod have driven up demand for rare earths even as China cut the quotas to shore up prices and ensure domestic supplies. The U.S. is looking at building a trade case on the restrictions, industry representatives said last month.
“The rare earths industry officials have realized that, after many years of continued growth in exports, the industry didn’t receive due profit returns,” Liu Aisheng, director of the Chinese Society of Rare Earth, said in an interview by phone from Beijing. “They adjusted the policy to ensure that the resources are optimally utilized.”
More Private Planes Are Being Repossessed
July 9th, 2010Via: USA Today:
In the past few weeks, Ken Cage, who specializes in repossessing private planes, says he’s recovered two jets worth a combined $7.1 million.
And while business has ebbed a bit compared with last year, it remains four times what Cage saw before the recession.
“I think we picked up 15 (planes) that were $1 million or more, including one $20 million jet,” says Cage, president of International Recovery & Remarketing Group in Orlando, reflecting on the past 12 months. “We’d never picked up anything close to that before.”
It shouldn’t come as a surprise that the nation’s steepest economic downturn since the Great Depression has also struck the rich. One indicator has been the number of private planes repossessed from owners who can no longer pay the notes or who are buried under liens stemming from unpaid maintenance and fuel bills.
“The small, single-engine Cessnas and Pipers are being repossessed all the way on up to 747s,” says Terence Haglund, founder of the Aviation Law Center in Williamsburg, Va., who represents many lenders. “It’s definitely recession-related, and it’s been increasing for the last couple of years.”
He doesn’t see the repossessions dipping significantly any time soon. “I think it’ll continue,” he says. “It has not slowed down yet.”
The beleaguered owners include businesses that have acquired corporate jets, affluent professionals who may choose to cruise the skies in small Pipers, and the fabulously wealthy who once had their pick among all of the above.
“A lot of what we’re seeing is … their aircraft are no longer worth what they were when they paid for them (and), they can no longer afford to operate and maintain them,” Haglund says. Some owners, he says, also get into trouble when they lease their planes to charter companies that then fail to pay what they owe for fuel, airport access and other services. That leads to liens on the aircraft.
“Banks can repossess the airplanes because some third party didn’t pay the bills,” he says. “The owner is stuck with either paying the bills someone else incurred or letting the bank take it back. It’s a bad situation.”
‘Liar Loans’ Make a Comeback
July 9th, 2010As I was reading this, I kept thinking, “Who’s going to buy these loans?” The answer, at least according to this, is nobody. The companies are going to hold these loans on their books:
The banks extending these loans are small community and regional outfits attracted to their relatively high interest rates (anything from 25 basis to 200 basis points over a conventional loan’s interest rate). The lenders intend to keep the loans in their portfolios rather than securitize them.
Good luck with that as interest rates rise.
My guess is that this will cause the FDIC to blow up faster than it would have otherwise.
Now, for a bit of comic relief, check out the Wall Street Funding of America homepage. Here’s what it looked like as this post went up:
Wall Street Funding of America
I know. You’re laughing and thinking to yourself, “No, it can’t be.”
But that’s really it.
Via: ABC News:
Forbes has learned that banks are quietly reestablishing the no-doc and low-doc mortgage market. In fact, low-doc loans accounted for 8% of newly originated loan pools as of this February, FirstAmerican Corelogic reports.
Wall Street Funding of America, a mortgage lender based in Santa Ana, Calif., was recently circulating offers to make low-doc loans to borrowers with credit scores as low as 660 on the Fair Isaac Corp. (FICO) scale, as long as the borrower was self-employed, seeking no more than 60% of the value of a home and had six months of mortgage payments in reserve. The lender was offering interest rates 1.5 to 2 percentage points over the going rate on conventional mortgages. A borrower with a credit score over 720 might get a slightly better rate, perhaps just 1.25 percentage points over.
On June 23 Wall Street Funding’s fliers caught the attention of Zillow.com blogger Justin McHood. Forbes’ calls to Wall Street Funding were not returned. (We’ll update you if they are.)
In New York City mortgage broker GuardHill Financial tells Forbes that it is making no-doc loans on behalf of four of the 50 lending mortgage lenders it represents (whose names GuardHill declines to disclose). Perhaps $100 million of the $2 billion in loans GuardHill handles this year will be low-doc, says Dave Dessner, its sales director. The banks extending these loans are small community and regional outfits attracted to their relatively high interest rates (anything from 25 basis to 200 basis points over a conventional loan’s interest rate). The lenders intend to keep the loans in their portfolios rather than securitize them.
The New “Convenient” Way to Buy Wine in Pennsylvania: Swipe Driver’s License, Look Into Camera, Blow Into Breath Sensor
July 9th, 2010Via: AP:
Swipe your driver’s license, look into the camera, blow into the breath sensor and — voila! — you have permission to buy a bottle of wine from a vending machine.
Pennsylvania, which has some of the most Byzantine liquor laws in the nation, recently introduced the country’s first wine “kiosks.” If the machines are successful in their test run inside two grocery stores, the state Liquor Control Board could place the high-tech alcohol automats in about 100 others.
But does anyone want to buy wine this way?
It seems the answer is yes. Customers using the machine at a Giant supermarket outside Harrisburg were thrilled that it could be a permanent fixture.
“This is just convenient one-stop shopping,” said Darby Golec, 28, of Enola. “It’ll be nice to have it all in one area.”
300 Actions a Minute? Truly Mastering StarCraft
July 8th, 2010Madness.
Via: Ars:
Many gamers think that with a little more time to practice, with a touch more dedication, they could be competitive at their favorite games. The truth? Those who make money gaming competitively do very little else with their days, nights, and weekends. This video, from the documentary The Hax Life, shows just how intimidating the competition can become.
In StarCraft, your efficiency is described in “APM,” or actions per minute. According to this video, you need to be over 300 APM to be competitive. That means in 60 seconds, you need to accomplish over 300 things. To get there you need to learn a level of situation awareness and split-second decision making most gamers will never be able to top.
The gap between how the professionals or wannabe professionals play games, especially in Korea, and how the rest of us enjoy them is much, much wider than many assume.
National Security Bullshit Generator
July 8th, 2010I was looking through the Special Access Program (SAP) Policy document hosted over at Cryptome and thought I’d post a section from it because this is just about the most absurd collection of words I’ve ever come across in the English language.
It reminded me of the maniac bureaucracies John Saul describes in Voltaire’s Bastards: The Dictatorship of Reason in the West:
Known for his novels of international intrigue, Saul in his first work of nonfiction delivers a passionate jeremiad on the follies of our age. Reason, he argues, has run amok; instead of the enlightened utopia envisaged by Voltaire, the modern West is a soulless machine run by technocratic elites that promise efficiency but create disasters. The author targets the insane waste of our “permanent war economy,” the perils of nuclear power, the co-optation of democracy by vested interests, the news media’s focus on false events and manufactured celebrities, the “personality politics” of presidential campaigns. He critiques the Harvard Business School’s management teachings, profiles such figures as Thomas Jefferson, Robert McNamara and Charles de Gaulle, flunks our colleges for failure to reward creativity and imagination. He blames novelists from James Joyce onward for “rendering literature inaccessible” and divorcing fiction from social concerns. He roams freely through history, politics, theology, art and film, challenging his audience on every page. This wonderfully provocative inquiry, a work of bold sweep and originality, may nonetheless leave some readers wondering whether misplaced faith in reason underlies all the ills discussed.
Prepare to gaze down the barrel of publicly funded stark raving technocratic fascism.
Via: DOD / Cryptome:
16. HEADS OF THE DoD COMPONENTS AND OSD PRINCIPAL STAFF ASSISTANTS (PSAs) WITH CA AND OA OVER SAPs. The Heads of the DoD Components and the OSD PSAs with CA and OA over SAPs shall:
a. Establish a SAPCO and designate a SAPCO Director to be responsible for providing general oversight of all SAPs for which the DoD Component Head or OSD PSA has responsibility. When directed, the Director of the Component or PSA SAPCO shall be responsible for developing and implementing policies and procedures for the execution, management, oversight, administration, security, IA, and records management for SAPs. This responsibility applies to all SAP policy executed on behalf of the respective Component Head or PSA and includes, but is not limited to:
(1) Submitting SAP actions requiring DepSecDef approval, as specified in Enclosure 2, to the Director, DoD SAPCO.
(2) Nominating programs to be apportioned into IJSTO; ensuring that SAPs transitioned to IJSTO are assigned a separate and unique nickname and tri-graph different from the originating program.
(3) Evaluating and, when appropriate, approving SAP subcompartments and projects in accordance with, and subject to, the respective SecDef or DepSecDef-approved SAP compartment.
b. Designate a DAA for SAP IS. If the DAA is an official other than the DoD Component or OSD PSA SAPCO, that DAA shall coordinate the accreditation decision with the Component SAPCO.
c. Conduct an annual review and validation for each assigned program for continued SAP protection to include confirming any program changes of the types listed in section 4 of Enclosure 2.
d. Provide support to the Director, DoD SAPCO, for SAP congressional briefings. Coordinate and prepare responses to congressional SAP inquiries.
e. Use organic or servicing CI organizations to provide comprehensive CI support to DoD SAPs in accordance with Reference (i).
f. Determine whether to employ a polygraph and credibility assessment program for personnel accessed to the SAPs under their cognizance.
g. Develop a dedicated cadre of security and audit professionals to administer and execute SAP security and internal audit requirements for assigned programs.
h. Support and execute individual component and team inspections in accordance with guidance published by the Director, DoD SAPCO.
i. Delineate roles and responsibilities in an MOA or other interagency agreement when multiple CAs (DoD and/or non-DoD) are involved in a SAP activity.
German Government Takes Legal Action Against Facebook; Saving Private Data of Non-Members for Marketing Purposes
July 8th, 2010Via: BBC:
German officials have launched legal proceedings against Facebook for accessing and saving the personal data of people who do not use the site.
Facebook could face fines of tens of thousands of euros under privacy laws.
The social networking firm confirmed it had received a letter about the action.
“We consider the saving of data from third parties, in this context, to be against data privacy laws,” said Johannes Caspar, head of Hamburg’s Data Protection Authority.
Mr Caspar said he had received a number of complaints from people who had not signed up to Facebook, but whose details had been added to the site by friends. He accused Facebook of saving private data of non-members without their permission, to be used for marketing purposes.
Switzerland is also reported to be concerned about the use of third-party data.
Facebook has until 11 August to formally reply to the legal complaint against it.
The California-based company told the BBC in an email that it was “currently reviewing (the complaint) and will readily respond to it within the given time frame”.
“Millions of Germans come to Facebook each day to find their friends, share information with them and connect to the world around them,” wrote spokesman Stefano Hessel.
Facebook has nearly 500 million users worldwide but according to figures by ComScore is only the fourth biggest social network in Germany.
