Monday Morning Reads

Good Morning!

This is going to be a busy week or so for me.  If you don’t see me around, just know I’m off doing things to put me on a new and hopefully higher path.  I’m defending my dissertation on the 13th, doing paper presentation on the 21st, and sending out CV packets all over the globe.  I love New Orleans but I’m headed to hopefully greener pastures.  I can’t take the war on Higher Education here any more.  Youngest daughter graduates from LSU in the spring and we’re both headed to places that aren’t dedicated to reinstating Plantation economies.  I’m cutting my losses before it gets any worse.

So, I had to bring this to the top of the links this morning.  Minx posted it down thread last night as I was actually reading it.  We have to find a way of cutting the Koch Brothers off the federal teat.  They pay small sums to loot our national resources and then they defy our national security priorities on the side.  They’ve been found getting rich off of secret sales to Iran and also bribing folks for contracts.  Thank goodness for whistle blowers!  It’s time to close them down.  This is from Bloomberg.

In May 2008, a unit of Koch Industries Inc., one of the world’s largest privately held companies, sent Ludmila Egorova-Farines, its newly hired compliance officer and ethics manager, to investigate the management of a subsidiary in Arles in southern France. In less than a week, she discovered that the company had paid bribes to win contracts.

“I uncovered the practices within a few days,” Egorova- Farines says. “They were not hidden at all.”

She immediately notified her supervisors in the U.S. A week later, Wichita, Kansas-based Koch Industries dispatched an investigative team to look into her findings, Bloomberg Markets magazine reports in its November issue.

By September of that year, the researchers had found evidence of improper payments to secure contracts in six countries dating back to 2002, authorized by the business director of the company’s Koch-Glitsch affiliate in France.

“Those activities constitute violations of criminal law,” Koch Industries wrote in a Dec. 8, 2008, letter giving details of its findings. The letter was made public in a civil court ruling in France in September 2010; the document has never before been reported by the media.

Egorova-Farines wasn’t rewarded for bringing the illicit payments to the company’s attention. Her superiors removed her from the inquiry in August 2008 and fired her in June 2009, calling her incompetent, even after Koch’s investigators substantiated her findings. She sued Koch-Glitsch in France for wrongful termination.

Every time I read about one of these things I think about the vast number of times I could’ve whistle blown on almost all the private sector companies I’ve ever worked for at one time or another.  It just makes me wonder what else is out there going unreported. The Federal government should make sure that they get severely fined, taken to court, and banned from accessing federal resources. But, given the lessons of GE, I doubt that will happen.   However, please boycott these brands owned by the Koch brothers: Stainmaster, Brawny, Dixie Cups, and Quilted Northern.

The Hill reports that Republicans are getting restless and eating their young  yet again.  It’s the blame game and the election season rolled into one!  I will pass out some popcorn if you need it!

GOP lawmakers told The Hill that redistricting pitting incumbents versus incumbents, coupled with the threat of Tea Party primary opponents, has sparked a lot of anxiety among House Republicans.

At separate closed-door conference meetings held last month as GOP leaders scrambled for votes on the appropriations bill that would ultimately fail, the topic of primaries and uncertain political futures ranked high among members’ complaints.

A freshman GOP member attributed the initial failure of the bill to assumptions on the part of the leadership. There were expectations, the member said, that enough Democrats would vote yes and that Republicans who backed the debt-reduction deal this summer would also approve of the stopgap appropriations bill. Yet, only 6 Democrats voted yes and 15 Republicans who embraced the debt deal — that set the baseline funding level — rejected the spending bill that fell 195-230.

“It was assumptions being made, not understanding the political landscape, Republicans running against Republicans in primaries and it not being a conservative position that we believe in. Continuing resolutions are not the way to run a government,” the lawmaker explained.

Other GOP lawmakers told The Hill, on the condition of anonymity, that redistricting and the threat of tough primary battles will cause problems for GOP leaders as they seek to round up votes on politically difficult budget bills.

One senior GOP lawmaker said, “[Speaker John] Boehner’s (R-Ohio) starting to have a problem internally because redistricting is pitting Republican versus Republican.”

Just wanted to let you know that it is likely that the Maconda Well is likely leaking again and you’re probably not hearing about it unless you read and watch AJ or live around here. A sheen has been reported since August and throughout September.  Some folks say the oil sheen has been around since March.

Fresh oil has been washing ashore in many areas which took a direct hit from last year’s disaster, including the Chandeleur Islands, Ship Island, Breton Island and the north part of Barataria Bay, Louisiana. AJE reports BP has reactivated clean-up operations with its Vessels of Opportunity program. Some suggest the oil is coming from natural seeps, which always occur in the Gulf. Others note oil could be leaking from the broken riser pipe, still on the ocean floor, which connected the Deepwater Horizon rig to the well. Another possibility, the most serious, is oil could be leaking at the seafloor beneath the capped wellhead, making it impossible to control.

On  September 27th, the Coast Guard said the oil sheen in Gulf could be sign of release from riser pipe and not the Macondo well not itself.  I guess that beats the natural leakage from shale formations we keeping hearing from BP.   Meanwhile, I still have serious questions about Gulf Seafood which is a horrible thing to have to say.  Here’s some information on research on Marsh Fish that are still showing signs of oil effects written up in the Miami Herald.  I’ve personally had some friends in the shrimping business tell me they’ve been hauling up shrimp with no eyes.  Meanwhile, there’s more drilling afoot and I bet you’re not hearing any of this where you live.

“The message that seafood is safe to eat doesn’t necessarily mean that the animals are out of the woods,” said Andrew Whitehead, an assistant professor of biology at Louisiana State University and a lead researcher in the study, which was published this week in the Proceedings of the National Academy of Sciences.

The researchers measured cellular responses in the liver tissue that showed which genes were being turned on and off. Those patterns allowed researchers to predict problems of health and reproduction.

The responses were detected even though the water was clean and only very low or non-detectable concentrations of oil components showed up in fish tissues.

“Where’s the oil? It’s in the sediments,” Whitehead said. Scientists assume that fish can be exposed when waves and storms stir sediments..

The study found the same kind of cellular responses in killifish as were observed in herring, salmon and other animals that later had large population losses as a result of the Exxon Valdez spill, Whitehead said.

It will take several years before it will be known whether the population of Louisiana killifish, an important food for other fish, declines, Whitehead said.

“Ultimately, that’s what we’re interested in – the population consequences over the long term,” he said.

The researchers found that when they exposed developing fish embryos to the same water and sediment in the lab, they showed the same cellular responses.

They also found that the gill tissues weren’t healthy. The gills are important for helping the fish compensate for changes in its environment such as shifts in temperature and levels of salt and oxygen in the water, Whitehead said.

Doug Inkley, a senior scientist with the National Wildlife Federation, said the killifish, also known as the bull minnow or cacahoe, was an important part of the food chain.

“This study is alarming because similar health effects seen in fish, sea otters and harlequin ducks following the Exxon Valdez spill in Alaska were predictive of population impacts, from decline to outright collapse,” he said in a written statement.

So, we’ll leave those living with dispersant and oil toxins alone awhile and move to Georgia where there’s a radioactive leak of “unknown size”.  Minxy, you might want to get a Geiger counter and buy bottled water.  Tritium is said to be 200x over the EPA limit right now.

Radioactive water found beneath Georgia nuclear Plant Hatch, Associated Press, September 30, 2011:

[Emphasis added]

Radioactive water has been found underneath [Hatch nuclear power plant]  in southeast Georgia [...]

[The operator] identified radioactive tritium in two test wells about 25 feet below the ground, said Dennis Madison, a utility vice president who oversees the plant. [...]

How much is leaking?

  • While the size of the leak was unknown, it was enough to raise the water table in the wells about five feet.
  • “We really don’t know what the rate is,” Madison said. “We know it’s more than a drip.”

How concentrated is the leakage?

The maximum concentrations of tritium reported inside the wells was more than 200 times the limit set by the U.S. Environmental Protection Agency for drinking water [...]

So, here’s some quotes about the health of the economy from people you should know (i.e. Wall Street insiders) that was sent to me by one of our readers.

#1George Soros: “Financial markets are driving the world towards another Great Depression with incalculable political consequences. The authorities, particularly in Europe, have lost control of the situation.”

#2 PIMCO CEO Mohammed El-Erian: “These are all signs of an institutional run on French banks. If it persists, the banks would have no choice but to delever their balance sheets in a very drastic and disorderly fashion. Retail depositors would get edgy and be tempted to follow trading and institutional clients through the exit doors. Europe would thus be thrown into a full-blown banking crisis that aggravates the sovereign debt trap, renders certain another economic recession, and significantly worsens the outlook for the global economy.”

#3Attila Szalay-Berzeviczy, global head of securities services at UniCredit SpA (Italy’s largest bank): “The only remaining question is how many days the hopeless rearguard action of European governments and the European Central Bank can keep up Greece’s spirits.”

#4Stefan Homburg, the head of Germany’s Institute for Public Finance: “The euro is nearing its ugly end. A collapse of monetary union now appears unavoidable.”

#5 EU Parliament Member Nigel Farage: “I think the worst in the financial system is yet to come, a possible cataclysm and if that happens the gold price could go (higher) to a number that we simply cannot, at this moment, even imagine.”

As I’m writing this, the Hong Kong exchange is down to its May lows.  The global markets and finance gods are not happy.  Frankly, I’m still thinking a coffee can buried in your back yard may be your best investment for awhile. I have no idea how President Obama is going to get reelected if this keeps up.  His message and policies just don’t stand up to current events.  But, hey, look over there.  Another Islamic Terrorist is toast, feel safer? Frankly, I’m not too worried that Al Qaeda will be after me and my bags and my grocery cart with my fat cat Miles in the kiddie sit.

Oh, here’s my personal favorite.  Try not to panic.

Ann Barnhardt, head of Barnhardt Capital Management, Inc.: “It’s over. There is no coming back from this. The only thing that can happen is a total and complete collapse of EVERYTHING we now know, and humanity starts from scratch. And if you think that this collapse is going to play out without one hell of a big hot war, you are sadly, sadly mistaken.”

If you’re curious about what the difference is between Operation Twist and QE2--no, they are not recreational activities–from the FED here’s a post that might interest you. Doubt it will make much difference because treasuries are still the place to be and we’re still at the zero bound, but at least some one’s doing something.  Basically, the FED’s trying to twist the yield curve and if you’ve had macroeconomics 101, here’s the exact moves.

Is this different from quantitative easing? QE2 was equivalent to the combination of two open market operations:

  • (1) Buying short-term Treasuries with newly created money.
  • (2) Swapping short-term Treasuries for longer-maturity ones.

The Fed’s new policy is just operation (2), disconnected from (1). Operation Twist is less effective than a potential QE3, therefore, to precisely the extent that operation (1) makes a difference.

Does it? First, let’s be even more precise, breaking down (1) into two smaller components:

  • (1A) Buying T-bills (extremely short term Treasuries with duration less than a year) with newly created money.
  • (1B) Swapping T-bills for a broader mix of short-term Treasuries (e.g. those with remaining maturity “3 years or less”).
  • (2) Swapping short-term Treasuries for longer-maturity ones.

You should be able to see that it’s just basically rearranging the chairs on the Titanic.  It’s an asset swap. But, there’s all this wishful thinking that it will send a message to the markets that the FED is serious and tame the deficit hawks a little. Remember that herd I wrote about last weekend?  That’s kind of what the Fed is betting on. Plus, they’re hoping that the twist will stop Perry from threatening their Chairman with bodily harm.

Nice to know that our health and national security is of no concern to our corporate overlords, isn’t it? So, there’s what’s on my mind today.  What’s on your reading and blogging list today?