Crude Oil Near Six-Month High on Iran’s Capture of U.K. Crew
March 30th, 2007These prices are going to start pounding the U.S. economy.
Via: Bloomberg:
Oil traded near a six-month high as 15 British sailors and marines seized in the Persian Gulf remained in Iranian custody for an eighth day, heightening concern the standoff will threaten oil supplies from the Middle East.
U.K Prime Minister Tony Blair said today Iran would face “continuing isolation” until the servicemen are freed. Iran backed away yesterday from an offer to release Faye Turney, the only woman captured, and said the U.K. must admit violating its territorial waters. Oil has risen 7 percent since Iran seized the group on March 23.
“People are still concerned about the continuity of supply” from Iran, the Middle East’s second-biggest exporter, said Rob Laughlin, a senior broker at Man Financial Ltd. in London. “There is a threat, and it’s two million barrels a day” at stake.
…
Almost a quarter of the world’s oil flows through the Strait of Hormuz, a narrow waterway between Iran and Oman at the mouth of the Persian Gulf.
“The market is very, very nervous,” said Michael Fitzpatrick, a vice president for energy risk management at Fimat USA in New York. “We’ve had very rapid tightening according to last week’s inventory data, demand is growing, and every other day there’s some refinery glitch or port closure.”
Money: Going Tactical
March 30th, 2007WARNING: This is not a recommendation to buy sell or hold any financial instrument.
UPDATE 6 April 2007: Bank of America Delays BullionValut Deposits
In the post below, I discussed how I wanted to immediately move some of our money into gold using the BullionVault system. I did, indeed, try to move some money to BullionVault. I used the electronic payment option for customers with U.S. bank accounts and followed BullionValut’s instructions exactly. Since I haven’t used BullionVault before, I decided to try it out by moving a small amount of money at first.
I’m a Bank of America customer and BullionVault uses Bank of America to receive funds from clients with U.S. bank accounts. If you were to use BofA’s system to pay anyone, a slow payment would take four days. I’ve never had it take longer than that. It has been a week since I made the payment to BullionVault, and Bank of America finally said that it was complete on April 3rd.
The money STILL hasn’t shown up in BullionVault.
I emailed BullionVault:
I should be showing a deposit of US$ to BullionVault user account [DELETED]. Do you know what the story is with this?
I sent this payment several days ago, and my bank only indicated that it was delivered to BullionVault’s Bank of America account on 3 April.
Transaction Description: BANK OF AMERICA, N.A. Bill Payment
Date: 04/03/2007
Reference Number: [DELETED]
Amount: $[DELETED]I’m a Bank of America customer so I didn’t expect delays like this.
Thanks,
Kevin Flaherty
BullionVault promptly wrote back:
Dear Mr Flaherty,
Thank you for your email.
I can see your deposit pending on our Bank of America system – it should clear in the afternoon of the next working day (this will now be Tuesday 10th April, as we have Easter bank holiday Friday and Monday).
We have complained to BOA about these delays, but it seems they process these particular payments manually. We are currently looking into ways to improve this system.
Let me know if you have any questions, or if I can help in any way.
Regards
I must say, even I wasn’t paranoid enough on this. I expected the transaction to simply be noted in some Homeland Security database. Obviously, it’s all being archived in some crypt, forever. But held up and an inspected for manual processing? Again, even I wasn’t paranoid enough.
There is obviously a national security component to this type of transaction. While Bank of America processes millions of transactions per day in an automated manner, moving a few hundred dollars into a physical gold trading account requires manual processing… If you are inside the U.S., or have assets there, this type of nonsense represents a clear and present danger to you and your money. Only criminal regimes behave like this.
If this is happening now, what will be your chances of getting money out of that thing in the wake of a crisis? It’s like someone said it a comment on the post, “Zürich seems like a long swim to get your assets.”
Before even mentioning BullionVault, I warned people to TAKE PHYSICAL POSSESSION OF THE STUFF. Pay cash for it at a coin shop. The only reason I didn’t take my own advice is because New Zealand has less than a thriving precious metals market. However, that wasn’t a good enough excuse to break my own rule.
I honestly feel that BullionVault is a first class operation and that they are sincerely doing their best. I cannot, however, recommend this service for U.S. bank account holders, unless you are prepared to physically travel to your Brinks vault of choice to recover your gold in the event that the U.S. government bans gold ownership again, (BullionVault explicitly allows this in case the regime in your banking country turns overtly criminal). The U.S. has gone too far down the path of fascism for a service like this to be viable for Americans. I questioned Paul Tustain, the Director of Bullion Vault, about this and I am satisfied with his response. I am a Bullion Vault customer, and I have been pleased with the service so far.
– – – End Update – – –
The situation in the Persian Gulf could become a crisis for “life as we know it” at any moment. Personally, after the Zbigniew Brzezinski Senate drama, I didn’t think it was going to come to this. But here we are.
The situation hasn’t blown up yet, but Becky and I are now planning as if it will.
It seems sick to be thinking about money at a time like this, but money provides options during a crisis.
If the U.S. engages Iran in a military conflict, all of us, everywhere, are probably in VERY deep shit.
Becky and I don’t have much money saved, but we’re looking at this situation and all we see are bubbles. Real estate bubbles. Currency bubbles. Equity bubbles. The situation with Iran might be the thing that throws gasoline on the already smoldering real estate situation.
I know of no reliable way to save “money” in a time of crisis. Even cash savings are bets on fiat national currencies. Most of what little we have is in New Zealand dollars. The rest is in U.S. dollars. If this strategy had a name, it would be, “Dumb and Dumber.”
Besides just going to town and spending our meager savings on tools, sacks of grain, etc. what other options are out there for people once their strategic requirements are met? <--- This isn't a rhetorical question that I plan on answering. I'm asking you because I don't have any good answers. Nobody wants to admit this less than me, but I may need to revisit gold here, as a hedge against the "bet" Becky and I have made by holding New Zealand dollars. This would represent the biggest plate of crow I've ever had to eat on Cryptogon. My official position on gold, stated several times, is that it can't be trusted because it's traded in leveraged fiat currencies. Gold's price is not actually determined by supply and demand. I've written about this over and over again, but if you want more detail, see this comment.
How about FOREX? A small amount of capital could be used to hedge via currency trading. Hint: Very wealthy people pay professionals to do this for them. But what if there are network problems? Liquidity problems? Exchange problems?
This feels like a situation where there’s no good choice on how to proceed. As an analyst, I hate it when that happens. But if this thing goes down with Iran, I think it’s going to affect all of us.
Is gambling the only option? If not, what are the non-gambling options for wealth preservation? If gambling is the only option, which gambles have the best odds?
Becky and I are looking at shifting about 10% of our cash into gold immediately via BullionVault, with vaulting in Zürich. This seems like the least bad option.
If you have a plan, consider sharing some information in a comment. Maybe we can all come up with some ideas.
U.S. Government Has Spent More Than Half the Public’s Treasure on Past, Current and Future Military Operations
March 30th, 2007Free trade. The invisible hand of the market. Capitalism.
Would you like an order of Freedom Fries with that?
Via: Common Dreams:
In the words of the great economist and engineer Seymour Melman, we live in a “permanent war economy.†Since the end of World War II, the federal government has spent more than half its tax dollars on past, current and future military operations. It is the largest single sustaining activity of the government. Melman pointed out 25 years ago that, at the time, the Pentagon was paying for 37,000 industrial firms, which oversaw over 100,000 subcontractors. Then and now, Pentagon contracts come with 1) guaranteed profits (because the products are typically sold before they are produced); 2) institutionalized cost-escalation (cost overruns are business-as-usual); and 3) products that are neither goods nor services the citizenry produces and consumes. Balance sheet calculations are not relevant to weapons manufacturers and military corporations. The Pentagon is not playing by the economic rules of producing goods, selling them for a profit, then using the profit for further investment and production. The managers at the Pentagon know their financial capital – American’s taxes – is a cash cow waiting to be milked.
Or should we say bilked? American’s hand over their hard-earned dollars to the deciders in Washington who protect the permanent war economy. The military industrial complex has tentacle that spread throughout the Congressional districts in the country. Military installations, private contractors and weapons manufacturers employ people to build cluster bombs, unnecessary war planes, naval destroyers, the next generation of nuclear weapons, “kill vehicles†for space missiles, and more efficient spy satellites. Congress continues to appropriate funds to create weapons systems that range from being obsolete, to those having no hope of ever functioning, to those promising to kill more efficiently, to those promising to allow the U.S. to be the “Masters of Space†through military domination by space-based weapons.
This work often provides union jobs and health benefits (both of which are “endangered species†in America) and the false hope of job security. Local communities defend the jobs (if not the corporations) when there is a threat of loss, knowing that America has few other industrial jobs, and the service sector doesn’t provide the same standard of living.
Meanwhile, military contractors’ CEO compensation is unregulated and obscene.[1] The door revolves between the halls of Congress and the military industrial complex’s “private sector†boardrooms. [Question: If a CEO’s compensation comes primarily from the taxpayers of America, can it still be stated that he works for the “private†sector?] It’s a sweet deal as long as Americans stay afraid of an enemy, there is minimal oversight of cost overruns or failed weapons systems, and questions of ethics, morality, and effective foreign policy are ignored.
Research Credit: Life After the Oil Crash
TJX DATA THEFT: LARGEST EVER
March 30th, 2007pOwNed on an unimaginable scale.
Via: Network World:
Detailing the sheer magnitude of a crime first reported earlier this year, TJX yesterday disclosed in financial reports that at least 45.6 million credit and debit card numbers were stolen in 2005 and another 130,000 last year by hackers who have yet to be caught.
According to Gartner security expert Avivah Litan, the volume of stolen data gives TJX the dubious distinction of being the biggest known victim of hacker-based card fraud in history.
“This is the biggest card heist we’ve heard of so far,†said Litan, an expert in e-commerce-related security.
TJX, which has 125,000 employees and operates hundreds of T.J. Maxx and other stores in the United States and the United Kingdom, did not immediately return a call for comment about the investigation. Earlier this year TJX publicly stated it had contacted law enforcement in December 2006 when it “learned of suspicious software†within its computer systems.
MC Rove
March 30th, 2007I was only able to watch 47 seconds of this. How much can you stand?
Research Credit: JF
Mortgage Crisis Hits Million-Dollar Homes
March 30th, 2007Pop.
Via: Reuters:
Sheriff Leo McGuire presides over foreclosure auctions in Bergen County, New Jersey, where the bidding for a home reached $1.2 million last June — a record for one of the wealthiest counties in the nation.
Homes sold on the auction block for as much as $852,000 this month — more than quadruple the median home price in the United States. County officials believe they are close to setting another record soon.
In Troy, Michigan, Dorothy Guzek, a credit counselor since 1988, has also seen the changing face of foreclosure.
Her clients, while predominantly poor and minorities, increasingly are neither. Nowadays, homeowners holding professional careers with six-figure salaries regularly drop by her office. More and more they come from upscale Michigan communities such as Independence and Clarkston — once the summer retreat for Henry Ford, founder of Ford Motor Co.
“Because of the financing that was possible, so many people bought the bigger house, the million-dollar house with the bowling alley or the tennis court outside,” says Guzek, who works for GreenPath Debt Solutions, a nonprofit service based in Farmington Hills, Michigan. “People across all income brackets are having financial hardship.”
For those on the frontlines of the growing U.S. mortgage crisis, these are the early signs that the explosion of subprime loans made to mostly poorer borrowers is reaching higher ground. The damage is hitting homes financed through jumbo loans for more than $400,000 and so-called Alt-A loans that are a notch above subprime and a step below prime.
Income Gap Widening, Wealth Concentration at Pre Great Depression Levels
March 30th, 2007Via: New York Times:
Income inequality grew significantly in 2005, with the top 1 percent of Americans — those with incomes that year of more than $348,000 — receiving their largest share of national income since 1928, analysis of newly released tax data shows.
The top 10 percent, roughly those earning more than $100,000, also reached a level of income share not seen since before the Depression.
While total reported income in the United States increased almost 9 percent in 2005, the most recent year for which such data is available, average incomes for those in the bottom 90 percent dipped slightly compared with the year before, dropping $172, or 0.6 percent.
The gains went largely to the top 1 percent, whose incomes rose to an average of more than $1.1 million each, an increase of more than $139,000, or about 14 percent.
The new data also shows that the top 300,000 Americans collectively enjoyed almost as much income as the bottom 150 million Americans. Per person, the top group received 440 times as much as the average person in the bottom half earned, nearly doubling the gap from 1980.
Cryptogon Reader Contributes $35 / Pookie Is Pissed
March 30th, 2007Pookie has made what she called a, “Denial of Service Donation,” and writes that she, “…is pissed as hell and believes that this is the proper response by Cryptogoners to Denial of Service attacks.”
HA!
Thanks, Pookie, for your incredible generosity and support.
I’ve spent several hours working on hardening the defenses, trying to make sure that this type of attack doesn’t happen again.
I’ll post an update on the original story about this, and if you want to leave comments, go for it there.
A Deconsumption Post!
March 29th, 2007Steve wrote, “Whatever decisions I might make for the future, they should only be ones I’d want to make anyway, regardless of what may actually come to pass in the world.”
How do you improve on that?
47 Large Core Columns, More Than a Dozen of Which Retained Dimensions of 54 x 22 Inches Through the 66th Floor
March 29th, 2007For the most part, I stopped thinking about the demolition of the WTC towers about three years ago. I filed that one away right next to my JFK folder. While it’s not intellectually rigorous to be content with, “The usual suspects did it. I don’t know exactly how. But They did it,” I sleep well at night now.
I’d be interested to know, however, what proponents of the official story have to say about the massive steel cores, now that the suppressed WTC blueprints have been leaked to researchers and published online.
Watch some videos of those buildings coming down again and keep this in mind about each one: 47 large core columns, more than a dozen of which retained dimensions of 54 x 22 inches through the 66th floor, and tapered in stages on higher floors.
Via: wtc7.net:
A coalition of independent 9/11 investigators and journalists today announced the online publication of a set of original blueprints of the North Tower of the World Trade Center. The set is composed of over 200 never-before-published drawings, including plans, elevations, and details, given to physicist Dr. Steven E. Jones by an individual interested in a more complete analysis.
