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New CEO Isn't the Long-Term Answer at BP, Expert Says

In Financial Markets, Health and Environment, International Econnomic Politics, National Economic Politics, Views, commentaries and opinions on 31.07.10 at 22:53

Money Morning have published an interesting interview with Dr. Kent Moors is an adviser to six of the world’s Top 10 oil companies and a consultant to some of the world’s largest oil-producing nations.  Ihe CEO-replacement saga began to unfold earlier this week, it seem clear that Robert Dudley will be the new CEO of BP. Dr. Moors doesn’t just know about Dudley – he actually knows him.

“BP will emerge as a smaller company. It will pick and choose upstream projects, and will emphasize the downstream refinery to retail distribution. Dudley will spend much of his time serving as the source of sound bytes on the liability issues emerging from the spill.”

Kent Moors


“I’ve been a journalist for nearly 30 years, and before I moved into editing, was considered one of the top business reporters in the country. So I know a true industry insider when I see one. In the few months since he’s joined Money Morning’s roster of global experts, I’ve talked with Dr. Moors enough to know that – in the global energy sector – he’s the ultimate insider,” William Patalon III, Executive Editor at  Money Morning writes.


William Patalon (Q): What was your reaction to BP’s decision to oust CEO Tony Hayward and replace him with Robert Dudley, an American and an insider? A solid, strategic move? Window-dressing? A non-factor?

Tony Hayward

Dr. Kent Moors: A move was inevitable. Hayward had become a lightning rod. Short-term, replacement of the CEO allows for a “new renewal” approach. Largely a PR factor in that sense, but BP still makes its moves to embellish its image when in difficulty. Bob Dudley has senior level experience and has been awaiting something serious to do after being ousted as head of TNK-BP, BP’s major Russian joint venture. Dudley managed to alienate the Russian partners to the extent that BP was in danger of losing its position in Russia if Dudley was not removed. BP saw TNK-BP as a way into Russian E&P (exploration and production) work, but did not want the venture to operate outside of Russia (where it would be a competitor to BP itself). The Russian partners, however, did.

Dudley is an interim appointment to appease the U.S. government. From a tactical standpoint, BP needed to make a move by July 27 – the day it made its quarterly financial report.

Q: Do you know Dudley? If so, what’s your assessment of him as an executive? Is Dudley qualified? In your travels, have you crossed paths with him? Any thoughts, impressions, comments?

Dr. Moors: Yes, we met in Russia. He delegates excessively, [and is] not a particularly good administrator or executive on details. He is primarily a strategist. Has little field experience – he looks at matters with the view of a director, not a program manager. He sees the big picture, but is lost in the details. Problems, of course, arise from the details – not the overall strategic policy.

Q: What moves do you expect that he’ll make once on board? Are they the moves that you would have him make were he asking you for advice?

Dr. Moors: BP will emerge as a smaller company. It will pick and choose upstream projects, and will emphasize the downstream refinery to retail distribution [part of the business]. Dudley will spend much of his time serving as the source of sound bytes on the liability issues emerging from the spill. That would have been his job anyway, had he not been elevated to the CEO slot. The company must fundamentally revise its strategic-risk-management plan. This is the third time I am making this suggestion. Since I was advising BP the last two times I made it, I doubt they will listen this time, either.

Dudley does not seek outside advice. Owing to his limited project experience – I am talking here about having to get your hands dirty in the actual operational elements – he tends to defer excessively to inside advice. That’s a bad idea when you stop to consider that it was the “inside advice” that resulted in the current disaster.

Q: Does this “swap at the top” change your outlook on BP’s shares? Why or why not?

Dr. Moors: Not in itself. The situation has to stabilize and a new BP structure has to emerge before the value of the stock itself can be correctly estimated.

Q: Does the move have other, ancillary effects on energy-sector stocks? If so, which sub-sector, or which stocks, and why?

Dr. Moors: Only to the extent that senior management has to be more adept at explaining organizational elements and serving as a conduit between company and the outside. The days of the audience of a major energy CEO being limited to his board of directors are drawing to a close.

Q: Given Dudley’s reported better rapport with the U.S. government, what’s the prognosis for offshore drilling in the U.S. Any better? Or is this a non-factor?

Robert Dudley

Dr. Moors: Dudley will be treated easier in upcoming committee hearings because he is the guy who replaced Hayward. His appointment means nothing in terms of changing the offshore drilling dynamic. That is currently playing out on Capitol Hill with the discussion on several pieces of legislation. The single-biggest development from the industry that will help that along was the announcement of a multi-company emergency-reaction plan.

Q: Anything new on the spill itself? The relief wells? I recall that, in one of your last columns for us, you outlined the “nightmare scenarios” for the relief wells.

Dr. Moors: I am still not sold on doing both a static kill from the top and a direct kill from below. The idea is to move as much mud down to offset pressure differences. If there are significant pressure differentials between the annulus (the space between the production casing and the borehole) and inside the production casing (the pipes of the blown well), the combination could create a major collapse and pipe implosion. The static kill is moving in from 5,000 feet down (the blowout preventer above the wellhead on the seabed floor). The direct kill is moving in at a 47-degree angle to intersect with the production casing about 17,500 feet down (13,500 feet below the seabed).

Q: Anything else we should be watching for?

Dr. Moors: Increasing problems experienced with an aging pipeline, terminal and capped field structure. In the last week alone, we’ve seen a barge collision with a capped well in the Gulf, a dramatic pipeline explosion in Dalian (China) and a Michigan pipeline rupture that sent oil spilling into the Kalamazoo River. More incidents such as these are on the way. The required capital expenditure to maintain this infrastructure are increasing fast.

By William Patalon III

Executive Editor

Money Morning

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Readers Response: The BP Conspiracy

In Financial Markets, Health and Environment, International Econnomic Politics, National Economic Politics, Views, commentaries and opinions on 31.07.10 at 22:09

Last month journalist, researcher and the author, Victor Thorn, presented a theory of grand conspiracy behind the BP oil spill.According to Thorn the catastrophic Gulf of Mexico oil rig explosion be part of a larger scheme to “reform” the energy industry, just as the Obama administration has “reformed” health-care, banking and automobile manufacturers. Sounds pretty wild? Well, here’s one readers response:

“I think they have a lot of money riding on this Dark Horse!!!”

Why does Raines Freddie/Fannie own the patent for CO2 carbon computer that some guy who died on 9/11 invented?? The Democratic congress gave it to Raines Nov 2008.. 44 % of the people killed on 9/11 were in competetion with CCX,,Chicago Climate Exchange. Poor souls …Al Gore, Ohbummer and Maurice Strong, plus whatever Congress and House member who own stock in CCX will make TRILLIONS if the can pass Cap & Trade..Funny how that bill they passes yesterday does not include Fanny/Freddie, and Dobbs and Frank that cause the mess will not be investigate,,I think they have a lot of money riding on this Dark Horse!!!

{{Interesting twist to 9/11::The people at Northwestern University who ran the cap-and-trade simluation which demonstrated the profits possible with a 350ppm cap, also partnered with Boeing and Honeywell to guide the planes on 9/11 and sabotage the evacuation of their number one rival CO2e.com from the North Tower.

The ADT dispatcher.told everyone in the Twin Towers to return to their offices on 9/11 where Honeywell / Vulcain ventilation systems were rigged to kill them with a toxic/explosive mix of gases

9/11 real purposes was to scare the climate deniers and remove the competition to the racketeering launch of the Chicago Climate Exchange by Al Gore and Maurcie Strong and Richard Sandor.}}

“Were Marsh & McLennan, Cantor Fitzgerald/CO2e.com/eSpeed and Aon Corp destroyed to eliminate the competition in a future multi-trillion dollar carbon trading market?”

“Cantor Fitzgerald/CO2e.com/eSpeed held the patent on the unique software which would be used in the future carbon emissions trading which will result in trillions of dollars of trades. The Carbon Disclosure Project (CDP) located at 10 Downing Street is currently estimated at $64 trillion.”

“In 2000, the Joyce Foundation provided a grant to Richard Sandor and Northwestern University’s Kellogg School of Management to develop a competing carbon trading software. At the time, Barack Obama was on the board of directorsgreenhouse gases and the only operational cap and trade system in North America.” for the foundation. A second grant was made in 2001 and eventually led to the birth of the Chicago Climate Exchange (CCX) the only emissions reduction and trading system for all six

“The Obama administration is currently strongly pushing carbon emission policy. While leaning heavily on congress, they have also instructed the Environmental Protection Agency to declare CO2 a dangerous threat to human health which will lead to regulation of carbon emissions.””
Powerful forces behind the scenes appear to be orchestrating events to set up and profit from a carbon emissions trading system worth trillions of dollars.

The impact area of American Airlines Flight 11 in the North Tower was the offices of Marsh & McLennan. ( See below)

The offices above Marsh & McLennan were primarily Cantor Fitzgerald/CO2e.com/eSpeed. Cantor Fitzgerald was cut off from the rest of the building by the impact and suffered the greatest single loss by any company on 9/11. 658 of its employees died in the north WTC tower. [Business Week, 9/11/2006]

But Thomas Barnett’s two “mentors” at the firm that he interacts with—Bud Flanagan and Philip Ginsberg—are both out of the building at the time, for “accidental reasons,” and survive the attacks. [Institute of International Studies]

Marsh & McLennan loses 295 employees & 60 contractors.

In the South Tower, United Airlines Flight 175 impacts a zone mostly occupied by Fuji Bank. The Aon Corporation offices are above the impact area and they are also cut off. 175 employees of Aon Corp. die in the attacks.

There were 2605 deaths in 2 towers that day. Marsh & McLennan, Cantor Fitzgerald/CO2e.com/eSpeed and Aon Corp lost a total of 1153 people. That is just over 44% of the total deaths—a staggering proportion.

The employees of these 3 companies constituted a small fraction of the total number of individuals in the two towers but accounted for 44% of the deaths.”” (#1)

“From the Washington Examiner:

When he wasn’t busy helping create a $127 billion mess for taxpayers to clean up, former Fannie Mae Chief Executive Officer Franklin Raines, two of his top underlings and select individuals in the “green” movement were inventing a patented system to trade residential carbon credits.

Patent No. 6904336 was approved by the U.S. Patent and Trade Office on Nov. 7, 2006 — the day after Democrats took control of Congress. Former Sen. John Sununu, R-N.H., criticized the award at the time, pointing out that it had “nothing to do with Fannie Mae’s charter, nothing to do with making mortgages more affordable.”

It wasn’t about mortgages. It was about greenbacks. The patent, which Fannie Mae confirmed it still owns with Cantor Fitzgerald subsidiary CO2e.com, gives the mortgage giant a lock on the fledgling carbon trading market, thus also giving it a major financial stake in the success of cap-and-trade legislation.

Besides Raines, the other “inventors” are:

* Former Fannie Vice President and Deputy General Counsel G. Scott Lesmes, who provided legal advice on Fannie Mae’s debt and equity offerings;

* Former Fannie Vice President Robert Sahadi, who now runs GreenSpace Investment Financial Services out of his 5,002-square-foot Clarksburg home;

* 2008 Barack Obama fundraiser Kenneth Berlin, an environmental law partner at Skadden Arps;

* Michelle Desiderio, director of the National Green Building Certification program, which trains “green” monitors;

* Former Cantor Fitzgerald employee Elizabeth Arner Cavey, wife of Democratic donor Brian Cavey of the Stanton Park Group, which received $200,000 last year to lobby on climate change legislation; and

* Jane Bartels, widow of former CO2e.com CEO Carlton Bartels. Three weeks before Carlton Bartels was killed in the Sept. 11 attacks, he filed for another patent on the software used in 2003 to set up the Chicago Climate Exchange.

The patent, which covers both the “cap” and “trade” parts of Obama’s top domestic energy initiation, gives Fannie Mae proprietary control over an automated trading system that pools and sells credits for hard-to-quantify residential carbon reduction efforts (such as solar panels and high-efficiency appliances) to companies and utilities that don’t meet emission reduction targets. Depending on where the Environmental Protection Agency sets arbitrary CO2 standards, that could be every company in America.

The patent summary describes how carbon “and other pollutants yet to be determined” would be “combined into a single emissions pool” and traded — just as Fannie’s toxic portfolio of subprime mortgages were.

“Fannie Mae earns no money on this patent,” communications director Amy Bonitatibus told the Washington Examiner. “We can’t conjecture as to the cap-and-trade legislation”” (#2)

“Know the crooks and their roles:
George Soros, Joyce Foundation and connection to CCX.

What is CCX, the Chicago Climate Exchange, projected to gross 10 Trillion a year is Cap-N-Tax passes. Obama played a pivotal role in the formation of the CCX. (Click here for expose)

Barrack Hussein Obama, Board Member of the Joyce Foundation, funded the formation of the CCX. (
Valerie Jarrett is still on the board, Obama’s top adviser.) Obama sat on board and funneled money to Ayer’s brother (wild huh, just a guy in his neighborhood) and to form the CCX.

AL Gore–Goldman Sachs– GIM: Hold on to your britches, London-based Generation Investment Management sees the Trillion and they purchased a huge stake in Chicago Climate Exchange (fifth largest shareholder.) The founder of GIM is none other than former Vice President Al Gore along with Goldman people. For example other founders are David Blood (former Goldman executive), Mark Ferguson (Goldman) and Peter Harris (Goldman) to name a few. “

Franklin Raines, mega crooked banker and bust Fannie Mae head, uses Fannie Mae (taxpayers money) to buy the technology to measure and manage carbon. The patent was award the day after Obama and Dems won the election.

Goldman Sachs owns ten percent of the CCX and its 10 Trillion a year potential. (CCX is 10% owned by Goldman Sachs (GS) and 10% owned by Generation Investment Management (GIM).) Gore, Goldman, and Cap and Trade – Tangled Web of Corruption” (#4)

“If we follow the time line on where Obama was during the funding of the Chicago Climate Exchange, he was still a professor at the University of Chicago Law School teaching constitutional law, with his law license becoming inactive a year later in 2002.

It may be interesting to note that the Chicago Climate Exchange in spite of its hype, is a veritable rat’s nest of cronyism. The largest shareholder in the Exchange is Goldman Sachs. Chicago Mayor Richard M. Daley is its honorary chairman, The Joyce Foundation, which funded the Exchange also funded money for John Ayers’ Chicago School Initiatives. John is the brother of William Ayers.

What a flap when it was discovered that the senator from Chicago had nursed on Saul Alinsky’s milk, had his political career launched at a coffee party held by domestic terrorist Bill Ayers, and sat for 20 years, uncomplaining in front of the “God-dam-America pulpit of resentment-challenged Jeremiah Wright.

Folk were naturally outraged that the empty suit who would go on to become TOTUS was spawned from such anti-American activism.

But the media should have been hollering, “Stop Thief!” instead.

The same Chicago Climate Exchange promoting public rip-off was funded by Obama before he was POTUS.

Even as man-made global warming is being exposed as a money-generating hoax, Obama is working feverishly to push the controversial cap-and-trade carbon reduction scheme through Congress.

Obama was never the character he created for himself in the fairy-tale version in “Dreams of My Father”. He’s the agent of Change and Hope for cohorts making money down at the Chicago Climate Exchange.” (#5)

“In closing, an article that appeared in FrontPage about a year ago, noted that “CCX’s members include Ford, DuPont, Dow Corning and the states of Illinois and New Mexico. CCX also owns 50 percent of the European Climate Exchange (ECX), which features such members as Shell, British Petroleum, Barclays—and Goldman Sachs.” British Petroleum—better known as BP.
http://canadafreepress.com/index.php/article/22810

Enough! We The People demand that a RICO investigation and criminal charges be initiated to uncover the criminal actions of this administration and all of its radical cohorts in crime, like GE, BP, Goldman Sachs, the labor unions, Fannie and Freddie, ACORN, Organizing for America, George Soros, Maurice Strong, Warren Buffett, Al Gore, The Progressive Caucus, anyone who has close ties to this administration.”

This is a cabal of crooks. All legislation should be halted until this is done. We, The People will not stop. We will know justice. We demand that you do your duty and uphold the oath you took to defend the Constitution. Our Country is depending on you like at no other time in history. (#6)

Once again, of course, Barack Obama is front and center, along with the Chicago Climate Exchange, the Joyce Foundation, George Soros, Maurice Strong, Edmund de Rothschild, the Federal Reserve, Goldman Sachs, George W. Bush’s Treasury Secretary Henry Paulson, even Fannie Mae, and many others. It entails global Marxofascism / global kleptocracy, with Americans being the chief victims, while a few overlords rule at, and their financiers skim off, the top. If any “mainstream” reporters cared to cover this thoroughly (and could) they could be much bigger characters in U.S. and world history than Woodward and Bernstein. And as for Americans willingly instigating this, it is treason.
http://investigatingobama.blogspot.com/2010/04/greatest-scandal-in-modern-history.html

see the brilliance of the plan..Bush’ watch,,bush’s fault..no connections to the chicago boys,,then Ohbummer says the the oil leak is like 9/11..they always return to the scene of the crime..why do they all protect him to a fault,,like picking an actor for their next soap opera drama,,Harry reid’s statement,,put a suit on that boy and he’ll work. fine,,paraphrase,,henry kissinger,,said O was poised in the art of deception,,he can play the part of the prez..everyone knows about soros,,he’s big enough to take the heat,,it’s not what see,,it’s there hole card,,,and the hole card was Cap & trade,,and viola,,Flight 93 landed at it’s target,,Nov 2008..

(#1) http://www.abeldanger.net/2010/04/specific-companies-in-world-trade.html

(#2) http://climateerinvest.blogspot.com/2010/04/fannie-mae-owns-patent-on-residential.html

(#4) http://www.examiner.com/x-14143-Orange-County-Conservative-Examiner~y2010m4d27-Scandal-Obama-Gore-Goldman-Joyce-Foundation-CCX-partners-to-fleece-USA

(#5)http://warofillusions.wordpress.com/2009/03/30/obama-maurice-strong-al-gore-key-players-cashing-in-on-chicago-climate-exchange/

(#6) http://investigatingobama.blogspot.com/2010/06/rico-investigation-needed-now-about.html

Related by the Econotwist:

Gulf Oil Spill: A Carefully Planned Inside Job?

So, You Thought BP Was An OIL Company?

Norway’s Oil Fund Among BP’s Largest Shareholders As Bankruptcy Rumors Hit Market

Oil Spill Makes Waves

BP Is Drowning In Its Own Oil Spill

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Mike Krieger Discusses Politics, Economics, And Gold On Keiser Report

In Financial Markets, International Econnomic Politics, National Economic Politics, Views, commentaries and opinions on 31.07.10 at 21:45

Mike Krieger was on the Max Keiser show recently, discussing everything from trivial items such as Goldman Sachs movie casting, to far more serious issues such as Obama’s failed presidency, corporatism, information oligopolies, the overturn of various core fundamental democratic principles, consumer culture, the Federal Reserve, and gold as the one true money standard:

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Helicopter Ben; Cleared For Take Off

In Financial Markets, International Econnomic Politics, National Economic Politics, Views, commentaries and opinions on 31.07.10 at 02:29

Chairman of Federal Reserve Ben Bernanke, appointed “Man of the Year”  by Time Magazine in 2009 and as “Helicopter Pilot of the Year” by the Econotwist’s Blog in 2008, is ready for take off again.  Ladies and Gentlemen; the QE 2 is now boarding. Take your seats, and get ready for another trillion dollar money dropping round of bailouts and economic stimulus.

“In what may be preparatory  step for a major shift in the U.S. monetary policy, St. Louis Federal Reserve Bank President James Bullard warned the US is closer to succumbing to a Japanese-style deflation than any recent time.”

Barron’s

Chairman Ben Bernanke - Helicopter Pilot of the Year 2008

The prestigious business magazine Barron’s have made a full analysis of an recent article written by St. Louis Federal Reserve Bank President James Bullard, in St. Louis Fed’s Review. Barron’s do not believe it’s a coincidence that the article is coming out right now –  a week-and-a-half before the next meeting of the policy-setting Federal Open Market Committee, of which Bullard is a voting member.

According to Barron’s, the St. Louis FED President James Bullard warns that the US is closer to succumbing to a Japanese-style deflation than any recent time, which he urged be countered with “quantitative easing.”

Quantitative easing, or QE, is economists’ jargon to describe the experimental monetary policy to massively inject money in the financial system, so that it – in theory – starts to flow natural by it self.

In practice, we have so far seen the  FED’s massive purchases of $1.7 trillion in Treasury, agency and mortgage-backed securities, a program that started in March 2009 and ended a year later.

The purchases were part of the doubling of the size of the central bank’s balance sheet as the key component of the FED’s efforts to prevent the meltdown of the financial system in late 2008 and early 2009.

And now the economy is recovering.

Excuse Me!

Most politicians and economists are saying the economy is recovering – although not as fast as they first thought…

The US have spent about 3,7 trillion dollars on bailouts and heaps of different economic stimulus programs, including giving the banks money for free (zero interest rate), and at the same time raised the national debt by an almost equal amount.

Something’s gotta be working, right?

Is it really necessary to do the whole dance over again?

Well, according the the influential FED-fellow in St. Louis, it is.

Suddenly, Deflation Is The Problem

James Bullard

Bullard’s article for the St. Louis Fed’s Review follows FED chairman’s Ben Bernanke’s description to Congress of the economic outlook being fraught with “unusual uncertainty.”

And it comes about a week-and-a-half before the next meeting of the policy-setting Federal Open Market Committee, of which Bullard is a voting member, Barron’s points out.

Bullard argues that Japan’s experience suggests persistent rock-bottom policy rates can result in falling inflation and inflation expectations. Every economic setback delays the eventual normalization of interest rates, leading everyone to expect more of the same.

The alternative, argues Bullard, is for US officials to react to negative shocks with quantitative easing by purchasing Treasury securities rather than zero interest rates.

“Whether Bullard’s theory is correct is arguable. What is empirically undeniable is that his worry has switched to deflation from inflation in a matter of months,” Randall W. Forsyth writes.

Does He Know Something?

The odd thing is; James Bullard has been one of Ben Bernankes strongest opponents when it comes to the QE policy.

Bullard has been critical of the FOMC‘s language that it expected to maintain exceptionally low levels of short-term interest rates for “an extended period.”

He have discussed the FOMC’s “extended period” of low rates and suggested that the FED should plan for an exit strategy from the quantitative easing.

“After the meeting, I asked Bullard privately if the expansion of liquidity through quantitative easing posed a threat to future inflation—even though much of it has wound up as $1 trillion of excess reserves just sloshing around the banking system. His answer was yes, it did have the potential to cause inflation,” Forsyth writes.

So, the big question is; what have transformed this one-time inflation hawk into a dove seeking a new round of QE?

What does Bullard know that we don’t?

Mr. Bernanke – You’re Cleared For Take Off

Helicopter Ben

What’s also important about Bullard’s article is that it is the intellectual successor to Bernanke’s famous speech in November, 2002, which earned the then-Fed Governor the nickname of “Helicopter Ben,” Barron’s notes.

In that address, titled “Deflation: Making Sure ‘It’ Doesn’t Happen Here,” he cited the potential of deflation appearing in Japan affecting the US.

Bernanke didn’t think deflation was a threat because “the US government has a technology, called a printing press, (or, today, its electronic equivalent), that it allows it to produce as many US dollars as it wishes at essentially no cost.” By buying Treasury securities issued to finance a fiscal deficit, the FED was—to use Milton Friedman‘s metaphor—effectively dropping dollar bills from helicopters.

The US quantitative easing measures are unprecedented in history. Some calls it an unprecedented experiment with the global economy.

And it don’t seem to work very well.

Monster Helicopter Under Way?

In the article, Bullard ignores the concept both Friedman and his St. Louis FED are most identified—the money supply.

The M2 measure of the money stock, which consists of currency, checking, savings and consumer money-market accounts, has slowed to a crawl, only about 2% year-over-year.

The broader M3, which the FED no longer publishes but is estimated by Shadow Government Statistics, is shrinking at a stunning 6% annual rate.

According to Shadow Stats’ chief, John Williams, whenever real (inflation-adjusted) year-on-year M3 turns negative, the economy has always fallen into recession (or if it’s already in a slump, the downturn intensifies) six-to-nine months later.

Shadow Stats’ M3 dropped below the zero line last December, it’s not surprising that any number of indicators are faltering, including the ECRI leading indicator.

Last month, the London Telegraph reported the Royal Bank of Scotland was advising clients that a “monster” QE was likely from the FED because the global banking system and the global economy teetered on a “cliff-edge.”

“Think the unthinkable,” Andrew Roberts, RBS’s chief of credit wrote.

After Bullard’s article was published Thursday, QE2 no longer is rumor, gossip or loose talk.

It may, in fact, have been chairman Ben Bernanke’s signal to be ready for take off – again.

B52-Ben

Read the Barron’s article at Yahoo Finance.

Related by the Econotwist:

US Congress Question Morals of Monetary Policy

The Failure Of A Culture

EU: Trading Bailouts For Weapons

Jim Rogers Says CNBC Is A PR Agency

Fitch: Banks Need More Capital Than Stress Test Shows

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Israel, USA Plans To Attack Within Next 3 Months, Iranian President Says

In Health and Environment, International Econnomic Politics, National Economic Politics, Views, commentaries and opinions on 30.07.10 at 22:43

Iranian President Mahmoud Ahmadinejad says the United States and Israel plan to attack two countries in the Middle East as part of a conspiracy to apply pressure on Iran. This exclusive interview with Mr. Ahmadinejad, done by Press TV, is an absolute “Must See.”

“They plan to attack at least two countries in the region within the next three months.”

Mahmoud Ahmadinejad


“We have precise information that the Americans have devised a plot, according to which they seek to launch a psychological war on Iran,” Ahmadinejad stated in an exclusive interview with Press TV, Monday. “They plan to attack at least two countries in the region within the next three months,” he added.

He said the US seeks to achieve two main objectives with the scheme.

“First of all, they want to hamper Iran’s progress and development since they are opposed to our growth, and secondly they want to save the Zionist regime because it has reached a dead-end and the Zionists believe they can be saved through a military confrontation,” Ahmadinejad explained.

He also advised US President Barack Obama not to follow the policies of George W. Bush.

In addition, he warned Russian officials to avoid playing into the hands of Washington because that would go against their national interests.

US Expansion Of War In Middle East Imminent

Commenting on the nuclear issue, Ahmadinejad said Iran will resume nuclear talks with the West in September, adding that Iran wants Turkey and Brazil to participate in the negotiation.

Related by the Econotwist:

Is World War III Approaching?

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Experts: Afgahn War Is “Unwinnable”

EU Officials Fears Second Depression And War

“We Stand At The Brink Of The Next Great Crisis”

“The Economics Of War Unfolding Now”

Germany In Favour Of Creating European Army

Wars Filling Norwegian Order Books

EU: Trading Bailouts For Weapons

Strategist: Corporate Earnings Are 20% Lower Than Reported

In Financial Markets, International Econnomic Politics, National Economic Politics, Views, commentaries and opinions on 30.07.10 at 21:14

Norway‘s main economic engine, the oil company Statoil, are being accused of dressing up their figures before releasing their quarterly earnings reports, so the earnings looks better than they really are.  Equity strategist Peter Hermansrud at the Norwegian brokerage firm, First Securities, says this is common practice among several listed companies.

“If you look at a wide range of publicly traded companies, the adjusted results over time has been 20 percent better than the real accounts.”

Peter Hermansrud

CEO Helge Lund, Statoil ASA

The Norwegian oil giant, Statoil, who yesterday presented the group’s second quarterly earnings report of the year,  has for the last two years submitted adjusted earnings numbers that in total is NOK 38 billion better than the real numbers. By doing this, the company’s profit seem to be 95% higher than it really is – compared to the unadjusted figures.

Several Norwegian media are reporting this story, Friday.

Analysts believe both Statoil and other companies are dressing up their reports a bit more than they should.

Looking Good, Man!

Peter Hermanrud

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In Statoil’s adjusted results,  are records of several large losses  pruned away, the Norwegian newspaper Dagens Næringsliv writes.

In Thursday’s Q2 report, presented by Statoil’s chief executive Helge Lund, Statoil reported an adjusted profit after tax of NOK 10.6 billion, while the actual figure is 3.1 billion.

Equity strategist Peter Hermanrud First Securities points out that the group may have good arguments to use adjusted figures, but says that several public companies are dressing up too much for the reports.

“If you look at a wide range of publicly traded companies, the adjusted results over time has been 20 percent better than the actual accounts, “ Hermanrud says.

Systematically Overestimates

Over the last two years, Statoil has overstated the real profits by NOK 38 billion.

This quarter, the group wrote down the revenue from the refinery at Mongstad with NOK 3 billion because of rising costs.

Hermanrud believes Statoil systematically overestimate their own exploration projects for oil and gas.

“They regularly adjust the value of both the bought oil fields and  their own discoveries.  But remember that the group has a direct costs that are equivalent to those billions.  This is money they have spent, is gone, and it never appear in the adjusted accounts,” he says.

EBBS – Earnings Before The Bad Stuff?

The PR people at Statoil have had a busy day; calling almost every main media who have reported the story, asking them to correct the non-adjusted figures, back to adjusted.

CEO Helge Lund points out that most analysts use the adjusted figures, and he denies the allegation that the numbers they use should be called EBBS –  “Earnings Before the Bad Stuff.”

“Absolutely not. All figures reported are as they are.  This is more question about how to communicate, and how we and analysts thinks is the best way to understand the company, “ he told the website DN.no earlier today.

Analyst John A. Olaisen at Carnegie says it’s changes in the currencies that provides the significant difference between the adjusted and non-adjusted account figures, and have nothing to do with the underlying business.

However, Olaisen believes the company should be criticized for the write-downs related to unsound investments.

Related by the Econotwist:

So, You Thought BP Was An OIL Company?

How To Make A Rat Look Like A Puppy

Statoil May Buy BP Assets, Expert Says

Norway’ Oil Giant Disappoint Investors

Transparency Fading Away In China

Financial Authorities See No Point In Stress Testing Norwegian Banks

Wolfgang Münchau: A Cynically Calibrated Test To Fix The Result

Rosenberg: “Statistical Illusion Of Recovery”

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A Lament for Europe

In Health and Environment, International Econnomic Politics, National Economic Politics, Views, commentaries and opinions on 30.07.10 at 13:27

It’s not often I present you with a poem. (Perhaps I should do that more often). But here’s one with actual news value, and related to the ongoing situation in Europe. The US/Italian writer and philosopher, Anthony St. John, have just published his view of the current situation in Europe  in form of a poem. It’s called “A Lament for Europe”.

econotwist

A Lament for Europe

Land of the Setting Sun
Caldron simmering in hungering desperation
To regain the smacks of the Past.
You seek to lunge ahead
On the energy of Your logic
And hopes not yet lionized.
You call upon Your histories
To lend strength to Your phantasies.
You coil up hard on Your proud self
Wrinkled and weather-beaten.
You struggle to nurture new flowers
On the dry rot of Your haunted memories.
Your youth, sniffed upon by strapped canine squads,
Rape-hate in Your stadiums
Striped with electronic rejoinders
To press softly-pliant, gaily-tinged plastic buttons.
Your elderly curl their ways to bankrupt health ministries
Where physicians fool with forms
And fill in football pools.
Your neighbors to the East—
Brazen, sordid—
Yank towards You
Roughly extracting for exacting theirs craved for.
You, Europe, sit pickled—
Soused in the juices of Your scummy heretofore.
Your dabblers in politics set flags unfurled
And their powers shame—
Shame!—
This Our world.

by Anthony St. John

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Anthony St. John

Anthony St. John was born 7 October 1944 in Williamsburg, Brooklyn, New York. His father’s parents were born in The Old Soviet Union; his mother’s mother was born in Ireland and her husband was born in France. Mr St. John studied in three universities: St. Bonaventure University (1962-66); the University of Miami (1972-73); and, the University of Florida (1973-75). He specialized in Philosophy, British Literature, and Northamerican Literature.

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Texas Billionaires Charged With Fraud

In Financial Markets, International Econnomic Politics, National Economic Politics on 30.07.10 at 12:19

Sam and Charles Wyly, billionaire Texas brothers who gained prominence spending millions of dollars on conservative political causes, committed fraud by using secret overseas accounts to generate more than $550 million in profit through illegal stock trades, the Securities and Exchange Commission said.

“They are among the biggest of the big when it comes to campaign bank-rollers, and their donors list is a who’s who of the Republican Party over the past decade.”

Dave Levinthal


The Wylys, who have been generous contributors to the Republican Party and GOP candidates, have spent the past several years facing questions, including from a Senate investigative committee, about whether they hid millions of dollars in tax shelters abroad.

Through their lawyer, the Wylys denied all charges.

According to the SEC, the brothers, who live in Dallas, created an elaborate and clandestine network of accounts and companies on the Isle of Man and in the Cayman Islands. The brothers then used these accounts and companies to trade more than $750 million of stock in four public companies on whose boards they served, not filing the disclosures required for corporate insiders, the SEC said.

Charles Wyly

In one case, the SEC alleges that the Wylys traded based on insider information they learned as board members, netting a profit of $32 million.

“The cloak of secrecy has been lifted from the complex web of foreign structures used by the Wylys to evade the securities laws,” Lorin L. Reisner, deputy director of SEC enforcement, said Thursday in a statement announcing the civil charges.

The agency is seeking unspecified financial penalties and a variety of other sanctions, including barring the Wylys from serving as directors or top executives of public companies.

According to The Washington Post, William Brewer III, a lawyer representing the Wylys, said they intend to clear their name.

“After six years of investigations, the SEC has chosen to make claims against the Wyly brothers — claims that, in our view, are without merit,” Brewer said in a statement. “It will come as little surprise to those who know them that the Wylys intend to vigorously defend themselves — and expect to be fully vindicated,” he says.

“They are among the biggest of the big when it comes to campaign bank-rollers, and their donors list is a who’s who of the Republican Party over the past decade,” says Dave Levinthal, a spokesman at the nonpartisan Center for Responsive Politics.

“It’s almost hard to find prominent Republicans who haven’t been a beneficiary of their financial largess. They’ve definitely been very kind, financially speaking, to a number of Republicans,” Levinthal says.

Both brothers, according to Forbes magazine, are billionaires who amassed their fortune by founding a computer company and investing in a wide range of interests including oil, insurance and restaurants.

In 1979, Sam Wyly faced sanctions by the SEC for improper regulatory disclosures.

They have been the subject of probes into potential financial wrongdoing since then. In 2006, the Senate permanent subcommittee on investigations completed a report on tax havens that focused on the Wylys.

Over 13 years, the Wylys used an “armada” of lawyers, brokers and other professionals to manage hundreds of millions of dollars in transactions that amounted to “the most elaborate offshore operations reviewed by the Subcommittee,” according to the panel’s report.

The regulators alleges that the Wylys committed fraud and various other violations of securities laws while sitting on the boards of four companies over the course of a decade: Michaels Stores, Sterling Software, Sterling Commerce and Scottish Annuity & Life Holdings.

The SEC says that by using offshore accounts to trade shares of these public companies, the Wylys were able to escape filing the regulatory disclosures required of board members when they buy or sell shares.

By keeping their trading activity secret, the Wylys deprived outside investors of information they could use “to gauge the sentiment of public companies’ insiders and large shareholders about the financial condition and prospects of those companies,” the SEC says.

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