As we see news of the possible (and increasingly likely) bailout of Freddie Mac and Fannie Mae by the US Treasury, I am reminded of something that I have been writing about nuclear energy, ie that it should be financed by the State, and I'd like to extend on why I think there are fascinating similarities between the two topics, however distinct they may seem.
WALTER ISAACSON: [...] Tom Friedman's column mentioned that you haven't been there supporting the tax breaks that need to be extended for wind and solar. Do you support those breaks, and will you keep pushing for--will you push for it at some point?
JOHN MCCAIN: Yes, and I have, and I have a long record of that support of alternate energy. [...] I've always been for all of those and I have not missed any crucial vote. But my citizens in Arizona know that when I'm running for the President of the United States I have to be out campaigning. But I of course I am for renewable energy
Credit for the research goes to the Sierra Club, which has kindly put together this list foe wider distribution.
US president George W. Bush on Friday warned Russia that ‘bullying and intimidation’ would not be tolerated as diplomatic efforts to resolve the week-old crisis in Georgia intensified.
The Georgian crisis is fast turning into an opportunity to engage into a large-scale diplomatic/political campaign against Russia. The question is - does this make any sense? If the goal is to make Russia change its behavior, what can the West do to actually make that happen? More generally, what do we want from Russia, and does it make sense?
Neocons are people that see danger everywhere and seem to crave military solutions in all cases. They endlessly blather about how we need to stand firm against bullies or other threats (Russia being near the top of the list), and protect our brave allies on the front lines, and along with them, democracy, freedom and our honor. They mock cowardly European who think appeasement (read - any diplomacy) might have a chance. They fuel conflicts and perpetually tout military options.
And yet, whenever given the opportunity to stand up to their words (and sent other people to fight, of course, they don't do that themselves), the results are surprisingly poor.
After the catastrophic invasions and occupations of Iraq and Afghanistan, the neocons have just lost a third war, in Georgia.
This is another diary critical of the West's position on Georgia.
Just as a bit of background, let me state here for the record that I wrote my PhD on the independence of Ukraine, and have thus studied how Russia behaves with its neighbors rather intensively. Following that, I worked for several years financing oil&gas projects in Russia and the Caspian; in particular, I worked on te financing of the BTC pipeline that goes from Azerbaijan to Turkey via Georgia (I wrote about it on DailyKos 3 years ago). Oil companies don't need the money: what they want is for other parties like banks to share the political risks associated with their projects. Which means that in turn, the job of a banker working on these projects is to understand those political risks. And it is quite obvious that the relationship between Russia and the Caucasus countries, including Georgia, was at the heart of my work.
A few of you have gently chided me for not doing any Countdown diaries since the oil prices have gone down. While the giddiness and glee demonstrated by many in the traditional media and elsewhere invites little but ridicule, as demonstrated by this graph below, prepared for the Oil Drum, some serious questions have been asked in various threads and deserve answers.
So, beyond the semi-glib answer that nothing much has in fact happened in the oil markets in the past month (after all, the recent decline is quite smaller, in percentage terms, than several others in the past couple of years), here are a few points worth making.
As a preliminary note: yes, I know, I'm due a diary on oil prices. But why? Just go take a look at this to see why I have not bothered yet.
Alan Greenspan, the man who has done more than anybody - even including the Bush administration - to empoverish the middle classes for the profit of the ultra-rich, has been given yet another tribune in a Serious Business Newspaper (in this case, the Financial Times of London) to try to provide justification for his past hackdom. That one is particularly rich in jargon, so I thought it would be worth doing a full translation and commentary.
Follow me below the fold.
In blockquotes: the actual text
In italics: the translation in normal language of his words
In normal: my comments.
Lost in the debate about drilling is a simple truth: blaming oil companies and/or politicians that cater for them (including by supporting more drilling) is, at best, an exercize in finding scapegoats for our own unsustainable behavior.
Oil companies, and drilling politicians are providing exactly what we ask of them: cheap, plentiful oil now, no questions asked.
Even kossacks are unwilling to drop either "cheap", "plentiful", or "oil", as demonstrated many times in the diaries where I proposed to increase gas taxes. So it's no surprise that drilling resonates so much: it seems to provide an easy way to continue with cheap plentiful oil. And even people who know it's an illusion seem to cling to the outside hope that it might actually work.
As if Bear Stearns ($50 billion in loans plus $29 billion in loss guarantees to JP Morgan) and Fannie Mae/Freddie Mac ($4 trillion in liabilities dumped back on the government's balance sheet) stories were not enough, investment bankers seem to have come up with a new scheme to loot those smallers banks that are about to go bankrup in droves in the near future, and leave the bill with the taxpayer.
The magic tool is "covered bonds." Here's how it goes.
with thanks to ARGeezer for pointing out the links and the scenario
This chart was prepared by Friends of the Earth in a report (pdf!) that they have kindly made available to bloggers before releasing it to the traditional media tomorrow morning
You know, the diarists that are around only to crow on bad news, and to cherry pick facts to build up a narrative of failure for America. Some just plain hate America, and some aren't even fromtheus (they're Jealo-us).
No "Countdown to $200 oil" diary lately... I wonder why? Is it because the oil bubble has finally been picked and prices are finally down to where they should have been all along - and will keep on going down as the inevitability of an Obama victory brings speculators to their senses? Is it because the temporary reprieve in average Americans' pain at the pump cannot be used as yet another gloomy backdrop for a story about how we're all going to die, or to be poor, or to get old? Is it because Bush following Obama's prescriptions (talk to Iran, drill at home - oops, that one cannot be credited to Obama) brought prices down by $20 in a few days, showing the hidden reserves of soft power in Washington - the power to move markets by a mere few words?
Doom is so overdone. And the blip in the Dow Jones does not change that.
... for a very simple reason: that's the day when the White House will finally stop digging and making the hole bigger. Which means that things will keep on getting worse until then.
It's only after that point that things have a chance of changing and, finally, start moving in a better direction. But it also means that things on the ground are likely to be worse during Obama's first 100 days than they are today.
And that things that were broken (like trust in the USA, or the Constitution) will still be broken when Obama comes to power, and will not be magically be repaired as he does.
I'm back in Paris, and trying belatedly to organise my thoughts after the last 5 days in Austin. Beyond the obvious pleasure for me to see friends I can meet only once a year, I've been trying to get an general impression of what happened at Netroots Nation. I was much impressed by Hunter's wistful and rather pessimistic musings on Thursday, but came reassured by what transpired throughout, and which, in my view, was eloquently summarised by Van Jones in his keynote speech on Sunday morning (it can be viewed here).
I remember 3 core points from what was a truly inspirational moment:
they had their chance, they messed up, "it's our turn (to clean up)"
consequently, the netroots need to move from a (successful) force of opposition to a force of proposition
energy and climate policy is at the heart of the clean up
Al Gore is now giving a major speech in Washington, setting out an ambitious goal for the USA to produce all of its electricity from carbon-free sources by 2020. While I have not heard the speech yet, I thought I'd comment on the technical feasibility of the plan, and the underlying economics of such an endeavour.
from the Department of Energy's recently published study about bringing wind power to 20% of total generation
The short answer is: while 100% is probably unrealistic, it's not unreasonable to expect to be able to get pretty close to that number (say, in the 50-90% range) in that timeframe, and it is very likely that it makes a LOT of sense economically.
Each time I come to the US, it surprises me, even though I know it: I go to a store, buy a $0.99 cent, fork out a dollar bill, and get told I need to pay $1.04.
"Why does the sign say $0.99 when I have to pay $1.04?"
"It's the taxes, I only get $0.99 as announced"
"But I don't care who gets what - the price says 0.99 and I need to pay something different!"
"Go complain to the government"
Maybe the annoyance is about having to dig for change (or, just coming out of the airport with twenties from the ATM, being saddled with tons of change), but I can't help feeling that your system is fundamentally flawed and creates unnecessary grief.
In Europe, governments smartly recongised the problem and imposed that all featured prices must be all-inclusive, ie you pay what's announced, and it's the seller's problem to split that between taxes and his actual revenues.
US TREASURY secretary Hank Paulson is working on plans to inject up to $15 billion (£7.5 billion) of capital into Fannie Mae and Freddie Mac to stem the crisis at America’s biggest mortgage firms.
The two companies lost almost half their market value last week as rumours of a government bail-out swept the stock markets, hammering share prices around the world.
Together, the two stockholder-owned, government-sponsored companies own or guarantee almost half of America’s $12 trillion home-loan market and are vital to the functioning of the housing market.
with Jerome having had all his predictions fulfilled, he's actually out of editorial lines to push.
A good thing too.
I'm supposed to be in Lisbon on Tuesday (to discuss a financing of a 100MW wind farm in Portugal), in Paris on Wednesday (to finalise the documentation of 160MW of wind farms in France) and in Dusseldorf, Germany on Thursday (to discuss the financing of 400MW of offshore wind in Germany). And of course, as a good Frenchman, I should really be spending the next 3 weeks with my family, which is going on holiday in Normandy.
And yet I'll miss all of the above to be in Austin, Texas next week, because it's the only time of the year that I get a chance to meet a few of you guys face to face. Being busy at work has kept me from writing as much as I would have liked to in the past year (but then again, it already feels too much like I'm repeating myself), but it won't prevent me from comng over to see you guys.
