Monday Reads
Posted: August 27, 2012 Filed under: Mitt Romney, morning reads, New Orleans | Tags: Changing rules, Cheat, hurricane Isaac, Mitt Romney, Ron Paul 55 Comments
Good Morning!
Well, TS/Hurricane Isaac is drenching Florida and headed towards the North Gulf. The weather forecasters appear to be confused by its signals because their models have yet to indicate a consistent target. It appears to be Bay St Louis at the moment. Anyway, it’s a wide enough system that New Orleans is in the warning band and folks around here are nervous. It will make landfall 7 years to the day that Hurricane Katrina changed everything here. Folks have run a lot of gas stations out of gas and markets out of the usual hurricane supplies like ice, batteries, and strawberry poptarts (ugh!). I think the media is hoping they get a story out of us, frankly. The mayor is asking us to shelter in place. However, the weather channel sent us Jim Cantore. That’s never a good sign. Hopefully, he’ll head towards Mobile some time on Tuesday.
Hurricane Katrina made landfall near New Orleans on Aug 29, 2005. It is estimated that the total economic impact in Louisiana and Mississippi exceeded $110 billion, earning the title of the most expensive hurricane ever in US history.
As Katrina moved through the heart of the Gulf of Mexico offshore oil and natural gas production area, it negatively impacted nearly 20% of US oil production. Hurricane Katrina, followed by Hurricane Rita in September, destroyed 113 offshore oil and gas platforms and damaged 457 oil and gas pipelines. Oil, gasoline, and natural gas futures prices on the NYMEX soared as damage assessments were reported.
The hurricane damage inflicted by Katrina caused oil prices to increase from the mid-$60s per barrel to over $70/bbl and gasoline prices at the pump rocketed to near $5 a gallon in some areas of the US. The US government released oil from its stockpile in the Strategic Petroleum Reserves (SPR) to offset price rises. In the natural gas market, prices were trading in the $9 to $10/MMBtu range at the time, but spiked to over $15/MMBtu as the full extent of the damage became apparent.
Additionally, the Louisiana Offshore Oil Port (LOOP) was closed on August 27, 2005, reducing production by over 400,000 barrels per day. LOOP handles 13% of the nation’s foreign oil, about 1.2 million barrels a day, and connects by pipeline to 50% of the U.S. refining capability. The port was undamaged by the storm and resumed operation within hours of electricity coming back online.
Gulf of Mexico oil production was reduced by about 1.4 million barrels per day as a result of Hurricane Katrina, equivalent to about 91% of daily Gulf of Mexico oil production. Additionally, over 8 billion cubic feet (Bcf) per day of natural gas production was shut in, equivalent to 83% of daily Gulf of Mexico natural gas production.
Seven years later as what will be Hurricane Isaac bears down on the Gulf Coast, the Gulf of Mexico currently accounts for about 23% of oil production and 7% of natural gas output according to the US Department of Energy. Furthermore, roughly 30% of natural gas processing plant capacity and 44% of US refining capacity is located along the US Gulf Coast.
According to the Bureau of Ocean Energy Management (BOEMRE), 8.6% of the Gulf’s daily oil output and 1.6% of daily natural gas production was shut down as a result of Isaac approaching the Gulf of Mexico. Closing prices as of Friday, Aug 24, 2012 of NYMEX October WTI futures settled at $96.15/bbl, while September natural gas settled at $2.70/MMBtu.
When it comes to offshore oil and gas rig infrastructure in 2012 versus 2005, the biggest difference is that the rigs placed into the Gulf of Mexico in the last several years have been hardened to resist Category 4 or 5 hurricanes. However, up until now, other than Hurricane’s Gustav and Ike in 2008, there has been no real test of the endurance of newer ‘hurricane resistant’ infrastructure that has replaced much of the aging platforms in 2005. Isaac may very well be the storm to test the fortitude of the newer offshore hardware.
It could also stir up all the BP muck on the bottom of the Gulf.
I’ve been reading through the Gawker documents and have really been struck by the amount of management fees and legal fees that Romney appears to tolerate just to avoid paying federal income taxes. It actually seems a bit sick or compulsive or obsessive to me. Some tax attorneys have suggested that some of his tricks are actually illegal or at least highly questionable. I have no idea since I just know the finance end of these deals. The legal and tax implications of these thing are not my bailiwick. It just seems like if you’re that rich and your time is that valuable that it could be spent on more useful activities than finding aggressive tax dodges. I wonder if the savings actually justified all the fees. But then, I discovered that the partners actually finagled the fees to avoid taxes.
The documents reveal another tactic used by Bain and other buyout firms to achieve the lower rate for other compensation as well, a practice known as management-fee conversions or fee waivers.
Here’s more examples from the Buzzfeed link.
Bain Capital Fund VII LP disclosed in a 2009 report that the general partner in the fund had in the past waived management fees and converted those fees into an interest in the fund called a “priority profit share.” That had the effect of turning fees that would be taxed at ordinary income rates, as high as 35 percent, into capital gains, taxed at a rate of 15 percent.
By deferring the receipt of that cash they get a second benefit by deferring the tax. While the partners are well- positioned to know what investments may be winners, the waiver is irrevocable, meaning the fees disappear if the deals don’t generate profit.
“The documents confirm that Bain Capital converted some of its management fees into carried interest; there’s no reason they would do this other than to convert high-tax ordinary income into low-taxed capital gain,” said Victor Fleischer, a tax law professor at the University of Colorado. “It’s a strategy that is aggressive, and, while common in the industry, is difficult to justify as an appropriate reporting of tax obligation.”
According to the financial disclosure form Romney filed in June, Ann Romney’s blind trust owns more than $1 million in the Bain Capital Fund VII, and between $100,000 and $250,000 in the co-investment fund. The Romneys received between $200,000 and $2 million in income from those two funds in 2011. The documents published by Gawker don’t show whether the Romneys benefited from the fee waivers.
The documents also show how deeply embedded Bain has become in the offshore tax-haven world, with funds organized in the Cayman Islands. Private-equity firms organize funds in tax havens to prevent foreign investors — and non-taxable U.S. investors, like university endowments — from getting hit with U.S. income tax bills from the profits generated by their underlying portfolio companies. That provides an economic benefit to the funds and to the private-equity managers because it means that, by avoiding U.S. tax, the investors have more to invest.
What does it say about a person that seems to be obsessed with making sure they search every nook, crack, and cranny for a way to avoid paying money to their own government. You know, the one they actually are running to lead?
Ron Paul isn’t playing nice with Mittens. He’s not “wholeheartedly endorsing him” and it appears that “the Romney Campaign Radically Changes GOP Nominating Process After Ron Paul Takeovers”.
Mitt Romney’s presidential campaign, led by top Romney lawyer Ben Ginsberg, forced through a major change the GOP nominating process on Friday in response to Ron Paul supporters’ efforts to win delegates to the Republican National Committee..
The Republican National Convention Committee voted 56-40 to make it impossible for supporters of one presidential candidate to override the will of voters at a state convention, as Ron Paul supporters did in Iowa and Nevada.
The purpose of the change, Ginsberg said, was “to correct what we saw as a damaging flaw in the presidential election process in 2012.”
The rule forces statewide presidential primaries or caucuses to determine the ultimate allocation of delegates, preventing takeovers like Paul executed in Iowa by eliminating unbound delegates in statewide contests. States would be allowed to decide whether to give all their delegates to the winner of the primary or caucus, or distribute them proportionally according to the results.
“Iowa will have to change the way they do it,” said a GOP official.
A second component of the amendment would require delegates to be approved by presidential candidates, lessening the chances of technically pledged delegates voting for a different candidate.
The original amendment would have removed the carve-out for Iowa, New Hampshire, South Carolina, and Nevada, but Ginsberg later clarified that was an error, after sparking a panic among early states.
Virginia delegate Morton Blackwell objected that the rule would have a “damaging effect on our presidential candidate Mitt Romney.”
“There are very large numbers of people who supported other candidates, in particular Ron Paul, who will see this as an attack on their behavior,” he said, warning that they could vote for the Libertarian party.
I guess the new way to get elected is to make sure the rules let you win. No wonder Ron Paul is acting so pissy.
“Today I was very excited call from the RNC,” Paul said “They said they changed their mind. They’re going to give me a whole hour and I can say whatever I want – tomorrow night!” (Tomorrow being Monday, the day that the RNC has no events due to Tropical Storm Isaac).
“Just kidding,” Paul concluded.
Paul directly referenced the rules change that may keep similarly insurgent delegates from succeeding in future elections. He seemed stung by the disappointments, after the concerted effort his campaign made to compromise with the Romney campaign and to keep their delegates under control.
The RNC “learned how to bend rules, break rules, and now they want to rewrite the rules,” Paul said.
“That’s what we have to stop.”
He also nodded to the view, common among Paul supporters, that votes had been miscounted or improperly counted in primary states.
“Ultimately numbers do count,” he said. “And numbers do count even when they don’t count all the votes as well. Because we do have the numbers!”
Paul may be angry that after years of effort and a number of compromises, the insiders are not letting him in. But he’s also now able to talk about the lists of topics he cares about without a second thought; it no longer matters if the Romney people think he’s too far out. He took full advantage on Sunday, filling his 67 minutes with a laundry list of historical references, bits of his stump speech, and nostalgic philosophizing.
Paul also wandered into territory that makes it clear why the Romney campaign, known for trying to control the message as much as possible, would be wary of having him speak unscripted.
Bradley Manning, Paul said, “is in the military so there are probably some debates on exactly how and what to do, but let me tell you: Bradley Manning didn’t kill anybody, Bradley Manning hasn’t caused the death of anybody, and what he has exposed, he is the equivalent to Daniel Ellsberg, who told us the truth about Vietnam.”
And: “I’m afraid that if we took a poll across the country and said ‘Should we try Assange for treason?’ that most Americans would say oh yes he’s a bad guy, he’s telling us all these secrets. But guess what, he’s an Australian citizen.”
What’s on your reading and Blogging list today? And, if I disappear some time on Tuesday or Wednesday, UPS me a boat please.
peej
Carissa
bostonboomer
ecocatwoman
mablue2
peggysue22
quixote
skydancingguestblogger
Mona (aka Wonk the Vote)
Sky Dancing 
Isaac is stirring up a lot of memories of Katrina today. Not a good thing.
And speaking of “storms”, Chris Matthews just “pinned the ears back” of Reince Preibus on Morning Joe by declaring Romney’s comments as “racist” dog whistles. As much as I despise Matthews he would not let go.
Reince squirmed and wiggled trying to defend Mittens but Chris went right for the jugular. For once we saw an aggressive approach rather than trying to maintain “balance” while these fools are allowed to get away with saying anything even when the facts are in dispute.
Antoher few minutes and I think Chris would have gotten out of his chair and clocked Reince which would have beem worth the cost of my cable bill.
Irin Carmon says: Romney “was cleaning his dog whistle and it just went off.”
Now that is “real humor”!
Laughing out loud at that one.
Just caught video of Mathews here. He’s good but the rest of that panel headed for the fainting couches 🙂 Weasels.
http://thepoliticalcarnival.net/2012/08/27/video-chris-matthews-hammers-reince-priebus-on-race-card/
We all know that Chris suffers from his numerous “mancrushes” and has always been a rabid supporter of Obama, but at least he had the cojones to go after Preibus which most talking heads do not.
Chris used the opportunity to openly confront him in view of an audience by bursting his little balloon by suggesting Mitt was “making a joke”.
Steven Colbert makes jokes. Mitt does not.
Jeebus, how crazy have things gotten that Tweety is the only one calling out the Radical Right for their lies and dog whistles? And Mika was sitting there like a dope and finally said something about Matthews watching his “tone”. I was expecting her to call for “inside voices” next.
I read where Jeb Bush said the Republicans are having problems with women voters only because of their “tone”. What a maroon!
And listening to Tom Brokaw trying to equate both sides of doing the same thing.
Forget Trump and the “birthers”. Forget Sununu and “unAmerican”. Forget Glenn Beck and “racist”. Forget referring to “the other”. Put all that aside and make the case that the Dems are equally at fault.
You can’t listen to this stuff without going crazy from the sheer stupidity and hypocrisy that is elevated and labeled “dialogue”.
Personally, I see nothing wrong with referring to Mitt as a “flip flopper”. He has repeatedly shown that he is.
Referring to Mitt as being willing to say and do anything at anytime to any audience is another fact that he has consistently held.
Saying that Mitt is a rich weirdo who has resorted to lying about his record and himself is merely pointing out the obvious.
So declaring that this race has “turned dirty” with images of welfare queens, lazy unemployed, and suggesting a conspiracy is afoot to gather up every gun is “fact” cannot be placed on an equal footing with the Dems.
Pat, Every campaign runs some negative ads but Rmoney is the whiniest spoiled brat I’ve ever seen about it. His sense of entitlement and privilege just drips off him at all times. If people can’t see that, they are willfully blind.
Defending those blatant lies in debates with Obama may not be easy for him either. He could trip over his own tongue at any moment.
I can’t wait to see what Matthews will do about this on Hardball.
Are they really crying about the Dems calling Mitt a flip-flopper?!?!? Do they think we’ve forgotten the Republican convention in ’04 when the entire convention hall had their arms in the air chanting “Flip-Flop, Flip-Flop” about John Kerry? WTF?
And don’t even get me started about Brokaw’s hypocrisy. I have friends who have places in Montana near Brokaw’s and Michael Keaton’s ranches. Supposedly liberal lovers of the environment want to change the laws to limit people’s riparian rights in order to protect the privacy of their vast and lavish holdings in the state. Bunch of effin’ phoneys every one of them.
Brokaw is no liberal. He switched sides long ago if he ever was one. He makes me sick.
He is sickening. Matthew’s should have kicked his ass too!
Good thoughts and best wishes to everyone in Isaac’s path.
Stay safe.
Same thoughts here – take all possible precautions and Keep Safe!
Yes Sweet Sue, my thoughts exactly…y’all stay safe and please be careful.
Be safe Dak………………..for a long time I couldn’t stand Chris………….but I can stand him today, will share this with others. Like him we see the racist and the devil in Romney campaign.
Chris was doing some Preibus Ass kicking this morning. He called out Preibus and all the damned dog whistling being done by the GOP/TP. Preibus had the nerve to whine about negative campaigning, when they’ve called Obama the “food stamp president”, have said “he wants everyone on welfare” and have accused him of being an illegal alien, a terrorist, a radical muslim, a communist, a socialist, etc,etc.etc?. Damned hypocrites.
Yes they are a bunch hypocrites…………..it was only a matter of time, because I too was getting sick of hearing that Obama is the nasty one………………when in fact it’s the party of stupid that is nasty.
Based on the tax info that is coming out, maybe Romney’s real reason for running for president is to get rid of the capital gains and inheritance taxes before he cashes out his IRA and his multiple other tax shelters.
Oh, that is a good one BB…
The Boston Globe says there is a “distinct possibility” that the convention could be cancelled altogether.
NYT says Republicans have figured out that they can still officially nominate Romney without holding a convention.
National Journal says Repubs are thinking about just having a one-day convention.
That would sure be convenient for them. The more they can fly under the radar where there platform and their policies can’t be seen in the light of day, the better their chances are. I think Mitt would skip the debates too if he thought he could get away with it.
Oh wow, what a godsend this storm is. /snark It is keeping them from displaying their GOP platform, and all the other bothersome optics Isaac has on Katrina’s anniversary.
If I didn’t feel like crap before, this makes me even more disgusted. I was looking forward to some of the batshit crazy to come out in the open this week.
I reiterate: If Romney and his campaign are this obtuse about the possibility of a hurricane occurring in the gulf the end of August (think Andrew and Katrina), then he and his party deserve to lose their chance for a convention and can bemoan the air space given to the President this week as he visits this 4-state region in the aftermath. Don’t blame anybody else, you, dolts, for you could have chosen Ohio for your convention.
The firestorm Todd Akin ignited won’t disappear any time soon. And we’re going to get deep into those Bain records. I shutter at what havoc Bush-style, these republicans will plunge us in further, for example, Iran, if elected. It’ll be too late into ’13 1nd ’14 to wail about voting for the wrong person. If you think Romney’s (and the crazed far-right’s) policies and agenda won’t effect and cost you, think again.
Just saw that parts of NO are being evacuated ahead of Isaac. My thoughts are with all of the people of the Gulf Coast, particularly those who suffered through Katrina. Be safe Dak.
Just the low lying areas. Dak is on high ground fortunately. I talked to her this morning. She’s getting prepared to do without power if necessary. I’m hoping the storm peters out.
Please send Kat my best when you talk to her again BB, it is going to be hellish down there this week.
Dakinikat — best wishes for Isaac avoiding NO, but if it happens, may it be a small storm.
Thanks. It doesn’t look like it’s going to miss us but it does look like it won’t be too strong. The worry seems to be on the people in the low lying parishes with the flooding. They’re trying to get them to evacuate. The rest of us have been told to stay home. The mantra appears to be ‘shelter in place’.
I just heard it’s such a large storm, in diameter, that once it hits land it will probably slow down and rain, rain rain. Bad news for low lying land.
Re: The Bain Files at Gawker — I googled for them today because I heard about them on WBAI last evening. I didn’t find any MCM (Mainstream Corporate Media) references to them on the first page. There’s also been nothing on NPR or the BBC. I’m having major PC problems so have to go the library, where reading time is limited. And I’ve also been missing the MCM news broadcasts, so don’t know if the Files are being discussed there. Somehow i doubt it….
I’m assuming from your analysis that these appear to genuine and you’re comfortable making analyses about Romney’s tax strategies using them…??
What the WBAI news emphasized was that Romney went to great lengths to stash his wealth off shore and that it took immense amounts of money to accomplish this. No regular tax payer could even afford the initial advisors’ fees to do the things Romney has done.l
Why isn’t this, as they say, “going wide” in the lefty blogs? I googled at FDL — nothing. Are people overwhelmed by the amount of paperwork to go through and are waiting to make sure they’re conclusions can’t be undermined?
BTW, are all Romney’s fees for these tax evasions tax deductible since it’s part of his tax preparation?
I’m not a tax accountant or lawyer so I’m not familiar with all the tax implications. I just now about different financial assets and their general use, purpose, and pricing.
The New York Times had a lengthy front-page article on the Bain files and there have been many pieces at HuffPo and Dailykos. I’ve been reading about it at tax blogs also. I’m saving all the links, but I don’t have time to hunt them down for you right now.
BB, I found many more links up front on my actual Google search; Bing was the one with none of the first page, and its top article was one critical of Gawker. Interesting.
Oh good. I’m glad you found some things.
Oh my! This is so funny. Somebody linked to this picture on FB and I wanted to share. I hope this works, I’m not very FB savvy.
Make sure you read the crawl under the picture!
Now that is funny!!! 🙂
ROFLOL! Very funny.
That was wonderful! I embedded the picture for you..
Thanks!
HuffPost Politics @HuffPostPol
Paul Ryan’s shocking comment about rape http://huff.to/QKAXbH
from the link:
I saw this quote somewhere this weekend and being sick and out of it I thought it said that rape is another reason for contraception. (which still does not make any sense.) what an ass Ryan is…
His comment is as vile as he is.
Bastard.
Yeah. “Method of Conception” what a way to put a violent rape!
Prosecutors: U.S. Soldiers Plotted to Kill President Obama
I’ve been kind of waiting for this for the last few years. Wingnuttopia can kiss my ass, it’s time to go after these right wing freaks.
Holy Sh&t!
He was a page at the 2008 GOP convention!
Ralph, did you see this?
Aguigui funded the militia using $500,000 in insurance and benefit payments from the death of his pregnant wife a year ago. Aguigui was not charged in his wife’s death, but Pauley told the judge her death was “highly suspicious.”
This loyal Republican very likely killed his pregnant wife too!
White racist males are scared — to murder his wife and child in order to finance his racist agenda — this is terrorism. These guys are terrorists.
Plus it is not surprising that these creeps would want to locate their cult in Washington State. There are lots of good ‘ole boys in the deep woods out here. For years I’d drive by two signs on private property — “Get US out of the UN”.
These racist military boys are also extremely sexist/misogynistic creeps. For awhile a friend was a civilian contractor on a military base. One weekend he visited a friend’s sheep farm — lamb tails are docked (cut off) in the spring. He collected the fallen tails.
So the next time one of the sexist military boys started bragging about getting his piece of “tail” that weekend — my friend handed the sexist pig a piece of tail.
Some guys are the good guys.