Reality Check: European Central Bankers Want Personal Accounts To Pay For Bailouts?

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ANA puts off retirement of Boeing 747, three jets amid Dreamliner woes

All Nippon Airways Co. will delay the retirement of a Boeing 747 jumbo jet and three smaller aircraft due to the grounding of its 787 Dreamliner fleet, its officials said Saturday.
ANA initially planned to retire the 747 in April and the three other planes, Airbus A320 and Boeing 737 jets, between March and May, but the move will be now postponed to June or later, the officials said.
The four aircraft are currently being used for domestic services due to the global grounding of all Boeing Dreamliners following battery problems. The number of 787 cancellations will reach 3,601 through the end of May, according to ANA.
The airline is also seeking to introduce three Boeing 777 jets earlier than planned to minimize the impact of its grounded Dreamliners. ANA had originally intended to introduce them in fiscal 2013, which starts April 1, but one of the aircraft is scheduled for delivery by the end of March.

Euro faces big trouble in little Cyprus

Use it or lose it: A woman waits as two people use ATMs in Nicosia on Friday. | AP

 

 

 WASHINGTON/NICOSIA – Confused by all the talk of Cyprus? Don’t be. Here’s the situation in three sentences: The country’s banks were using Russian deposits to buy Greek bonds. The Greek bonds went bad, and the Cypriot banks lost a bundle. It now needs a bailout from its eurozone partners, but it’s tough to convince German taxpayers to pony up if they think the money is going to Russian oligarchs.
But here’s the bigger question: Why are we talking about Cyprus at all?
Cyprus is tiny. It has fewer people than Philadelphia. It has a smaller economy than Vermont. It has no nukes. It is not a country that typically commands global headlines.
But in 2008, exhibiting especially bad timing, Cyprus joined the eurozone. So now its problems are the euro’s problems. And as we’ve discovered in recent years, the euro’s problems are the world’s problems.
In 2011 and 2012, markets seemed in almost constant turmoil over the very survival of the currency union — and their turmoil, in turn, actually threatened the survival of the currency union, as the market became unwilling to lend Italy, Greece, Portugal and Ireland the money needed to fund their governments. Investors have since calmed down. But the relative financial calm masks a dangerous political and human situation.
In Spain, unemployment is at 26 percent, and youth unemployment is above 50 percent. The same is true in Greece. In Italy, an anti-eurozone comedian won more votes than the leaders of either major party, and with no one having enough support to form a government, it looks like the deadlock will require a redo election.
As of Friday, public outrage had scotched Cyprus’ initial idea of paying for its bailout with a broad bank tax, and it was scrambling to come up with a new source of funds before the Monday deadline set by the eurozone.
Lawmakers in the country approved three key bills Friday that aim to raise enough money to qualify the country for a broader bailout package and help it avoid financial ruin in mere days.
A total of nine bills were approved, including a key one on restructuring the country’s ailing banks, which lost billions on bad Greek debt; one on restricting financial transactions in times of crisis; and one that sets up a “solidarity fund” into which investments and contributions will flow.
More bills to meet the total target of ?5.8 billion ($7.5 billion) Cyprus needs to secure an international bailout were to be brought for a vote over the weekend. They include a crucial one that would impose a tax of less than 1 percent on all bank deposits.”My view is that what you’re seeing already is the politics coming unstuck in a lot of places in Europe,” says Desmond Lachman, a resident fellow at the American Enterprise Institute, a Washington think tank. “Greece is the worst example. The extreme left and right has 45 percent of the vote now.”
In 2011, the eurozone’s crises were driven by fearful markets. On any given morning, the people would awaken to find that interest rates on Spanish bonds had soared. Today, the crises are driven by volatile politics, and that makes them all the more dangerous. The European Central Bank can deal with a bond-market crisis. It can’t deal with a popular revolt.
“I don’t understand how you can extend this for many more years,” Lachman says. “The game plan is they apply this fiscal austerity in 2013, 2014 and 2015. And my problem with all this is I don’t see how, if you’ve got significant fiscal austerity at a time when banks are cutting credit and Germany is slowing down and, in Spain, the housing bubble is bursting, I don’t see how this recession ends. And if you don’t have hope? The politicians keep selling the idea that this will hurt a bit but in six months time we’ll see the green shoots. If you don’t see them, you’re just inviting a political mess.”
If you want to fear for the euro, this is the reason to do it. A half dozen countries have unemployment in the 15 to 25 percent range, with youth unemployment in the 30 to 60 percent range. Politics isn’t stable amidst that sort of pain — particularly when there’s a perception that some of the pain is being forced upon the country by richer, wealthier outsiders.
That’s what’s happening now. Christopher Pissarides, a Cypriot economist, won the Nobel Prize in economics in 2010. But in an interview with Bloomberg Businessweek, his fury at the more powerful countries in the eurozone was sparklingly clear. “Small countries, be warned when joining the eurozone,” he said. “You could be bullied any time by your big brothers if it suits their political objectives.”
And that, again, is the view from Cyprus’ Nobel Prize-in-economics contingent. The man on the street, it’s safe to say, is even angrier.
As austerity continues to squeeze these economies over the next couple of years, the political pressure to do something, anything, to recapture national pride and rediscover some measure of hope will build. And once it finds expression — if it finds expression — the chain reaction could be catastrophic for the eurozone.
That’s the other reason a tiny Island like Cyprus matters. It shows the zone’s tendency toward contagion.
Cyprus’ banks fell because they’d invested in Greek debt — so no Greek problem, no Cypriot problem. The initial idea to pay for Cyprus’ bailout would have included levying a 6.6 percent fee on all bank accounts under ?100,000.
That was taken, in many quarters, as a violation of the eurozone’s nascent deposit insurance scheme. It raised the possibility that investors in Italy or Spain would need to move their money, too. After all, if deposit insurance doesn’t protect you from the eurozone simply removing money from your bank account, what good is it?
But what killed the idea wasn’t its underlying economic flaws. It was political outrage in Cyprus. So far, these eruptions against the bailout conditions set by the richer members of the zone have always proved manageable. But there’s been a number of close calls, and of late, the political situation in many of these countries is deteriorating.
If a country like Greece or Spain were to see a political reaction that made remaining in the currency union impossible, it would immediately spark a run on the other teetering countries, making it more likely they’d have to leave, too. That’s how you get to actual dissolution.
Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics, thinks all this is a bit overblown. “The euro is a prison, or a Hotel California,” he says. “Once you’re in, you can’t get out. The costs of leaving are just cataclysmic. They’re so high no one will do it. Greece shows that.”
And thus far, Kirkegaard had been proven right. Elections have produced a lot of anti-eurozone rhetoric, but not a lot of anti-eurozone behavior. “A lot of people have been predicting the 1930s scenario, where the economic hardship we’re seeing will lead to political extremism, and then lead to the undoing of entire area,” he says. “I take some solace in the elections we’ve actually had. Yes, you’ve kicked out incumbent governments in almost every case, but the government that comes in and replaces it is pretty much the same.”
The question is whether they’ll remain so. It is hard to be confident in a currency union that must fret over the decisions of Cyprus.

EU-Japan FTA delayed

AFP-Jiji
BRUSSELS
European Union leaders have announced the indefinite postponement of a key summit with Japan intended to launch crucial free-trade negotiations Monday because of the mounting debt crisis in bankruptcy-threatened Cyprus.
“It is with regret that we have decided to postpone . . . (the) EU-Japan summit,” EU Council and Commission heads Herman Van Rompuy and Jose Manuel Barroso said in a surprise statement late Friday.
EU Trade Commissioner Karel De Gucht will maintain his diary date in Tokyo on Monday, the duo underlined.
In Tokyo, a Foreign Ministry official said: “The postponement was unfortunate but we understand the situation. We hope the two will make an effort to stabilize Europe’s financial system.”
The EU office in Tokyo said that De Gucht was expected to proceed with his events, including a meeting with Foreign Minister Fumio Kishida, but it was uncertain if he would act for the EU leaders to launch the trade talks.

Obamacare Doubles The Cost Of Premiums, It's Forcing Someone To Buy I Fully Loaded Car

http://shar.es/eS4Ea  via @sharethis

Paul Craig Roberts: Triple Bubble Implosion Coming

china’s xi jinping urges for stronger investment, high-tech ties with russia

Chinese President Xi Jinping. (RIA Novosti / Sergei Guneev)

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China’s newly elected leader says relations between Moscow and Beijing serve as a ‘guarantee of the balance in the world’. Xi Jinping said the two countries should upgrade their cooperation from natural resources to investment and high technologies.

"China and Russia should strengthen strategic cooperation in the international arena, we must work together to uphold the principles of the UN Charter, as well as to ensure together peace and stability in the world," Xi Jinping told students and professors of the Moscow State Institute of International Relations.

Addressing the audience Xi brought up Friday’s talks with Putin, which lasted for more than seven hours. Xi expressed real hope that Moscow and Beijing would move from mainly trading in raw materials to include cooperation in hi-tech fields.

“It is rational now to stimulate developing relations not only in raw economic, but also in investment, high technologies and finances, to start cooperating not only in trade but also in joint research and manufacturing,” China’s leader stressed.

Russian President Vladimir Putin (right) and President Xi Jinping at the signing of a joint statement on deepening mutually beneficial cooperation and relations, March 22, 2013. (RIA Novosti / Sergey Gu

neev)

Geopolitical analyst William Engdahl believes China and Russia need to stay close together.

“China needs Russia, because China lacks certain things that Russia has, not only raw materials, it lacks the scientific know-how. Russian science during the cold war was primas par exellance, there was no competition from the West in terms of basic science, and that still is on the table ,” Engdahl told RT.

The fact that Russia was the first-choice visit for the new leader of China is a huge geopolitical significance, according to the analyst.

“It sends a signal to the US, to Washington, who’s been very increasingly hostile to China in the last years. It also brings together the one combination that, I think, for China is the only winning combination for it can create a counterweight to the growing hostility from NATO and from the US. That is the Eurasian combination with Russia and China is the fulcrum of that,” he added.

On Saturday, the Chinese President also met with Russian Defense Minister Sergey Shoigu. Xi is the first foreign dignitary to visit the center for the operational management of the Russia’s armed forces, where personnel continuously monitor the situation at sea, on the land, in the air and space.
“My visit to the Russian Defense Ministry highlights that … the cooperation between the armed forces of China and Russia will also be strengthened, " Xi said.

Russia's Defence Minister Sergei Shoigu (R) meets with China's President Xi Jinping in Moscow on March 23, 2013. (AFP Photo / Vadim Savitsky)

The views of Russia and China on the issue of missile defense are very similar, according to the deputy Russia’s Defense Minister Anatoly Antonov.

"It was a complete identity of views of the Chinese President and the Russia’s Defense Minister on issues of international security. Common concerns of the two sides on the issue of missile defense were highlighted," ITAR-TASS has quoted the deputy Defense Minister as saying.

Analyst William Engdahl is positive that Russia and China need each other not only economically, but also militarily.

“If Russia and China put arms against each other, then the game is over. Then you have the (what the Pentagon calls) full-spectrum dominance. I think it’s a very unhealthy state of the world – for China, for Russia, for the rest of the world, but also for the US. Too much power concentrated in too few hands’ – always a danger towards peace ,” Engdahl said.

The new Chinese leader chose Russia as his first stop on his maiden overseas voyage. Xi has already confessed to “breakthrough agreements ” being reached, chief among which was the presidents’ overseeing of a deal between Russian oil giant Rosneft and China’s state-owned CNPC. The agreement will see Russia increase oil supplies to China. The former is the world’s largest energy producer, while the latter is its biggest consumer.

The Doomed and Clueless Rich in Freefall

Dog Poet Transmitting.......

May your noses always be cold and wet.

News of rapidly advancing poverty in America is starting to appear in the media. Not by accident, things like this are also appearing alongside, or further down the page. Signs of conspicuous consumption by the clueless rich are readily available to see, at least in the media. It's doubtful that 'you' will see any of it up close. It's ironic to see the conspicuous consumption of the fatuous rich, behaving as if they've gotten their due and don't mind hooting it up in the midst of terrible economic times for the rest of us and painting a giant target on their backs. They don't see this? Why don't they see this? They are not permitted to see it because they are for the purpose of demonstration. They party down like there's no tomorrow, waltzing by all the want and desperation of their fellows that they had a hand in creating, believing that the orchestra is playing only for them. Who could possibly need solid gold toilets and wash basins? Who needs an eleven million dollar watch, does it tell a special kind of time? It tells time alright but they don't know what time it is, or mind the hours and days that pass as they dine in their private mortuaries, already entombed, already dead and dead in the only way that really counts. What does it say in the Bible? “ For what shall it profit a man, if he shall gain the whole world, and lose his only soul”? If you Google or Bing this, you can see how the many differing versions alter the text and meaning. This has been happening at an accelerated pace of late and significant quotes have been either changed beyond recognition or disappeared entirely like, “even the devil is transformed into an angel of light at the given moment, be not deceived”. So, logically, who does this mean he works for? Swish... nothing but net. Well, it's still there but not like it was a couple of decades ago. Why change it? It's not about any one specific change, it is about a series of changes incrementally applied.

You dig into the first level of appearances and new things emerge. Few choose to dig to any depth, afraid of what they may discover about this world and, more frighteningly, about themselves. Is it true? We'll see. There are no limits to the appetite of greed and behind the backstory, there is always the real story. There is a vast library of offenses that seldom come to the public's attention because the presses, both media and currency, are owned by the people committing the crimes, or are employed by them. How do you get the attention of people who don't pay attention and who, even if they were told and shown the evidence, would say, “Go away, I don't want to know”? Good question., I submit one sinkhole in Louisiana and all the implications forthwith. I also submit the New Madrid fault line, courtesy of BP and the Royal Family, along with assorted 'don't give a fucks'. I submit the looming California earthquake. It's on deck and soon to be seen. Count on it.

I've had this dream a few times. I know it's a real premonition because of the details. I am walking in LA but it's not me. I'm occupying someone else's consciousness. The dream is presented in hyper reality so that all of the details are sharp and precise. Most of the dreams I have like this, which don't come often, are always of this visual quality. I'm on a residential street and suddenly everything goes quiet. I can even hear the quiet and I sense the minds of all of the four-legged and winged creatures. There is an extended stillness that appears much longer than it really is. I can feel the animals begin to move at speed for some other location. I can feel something coming. The ominous sensation is one of extreme dread and helplessness. After what seems an age, as I stand there frozen, the ground begins to move beneath my feet. It's like being in one of those children's blow up, party castles, only there are no rubber walls to bounce off of. Then it is all confused for a time, as the Earth ripples and undulates beneath my feet and then I hear something like a hundred express trains, moving on parallel tracks and the dread moves up several octaves, into sphincter loosening fear and I turn to look behind me and I see in the distance, above all of the buildings, an enormous wave of water, hundreds of meters high, coming toward the land and... me. The dream pretty much ends at that point. Even now I can close my eyes and visualize it. That's how strong it was. ♫standing on shaky ground♫

I had another similar dream where I was in Peru. II might actually wind up there. I was on a plain below the Andes mountains. A descendent of the Incas was sitting on a rock playing a flute and the music was visually moving up to the sky. There were 30 or 40 people strolling around and the grass was an iridescent green. Every color had a surreal glow, unlike what we see here in ordinary consciousness. I looked up at the mountains and between two cliffs I saw these winged sphinxes, like extremely high definition cartoons, bouncing off of the peaks. There was this sense that the world had changed in such a way as to be unrecognizable as its former self. Thing's happened before and after this but I am unable to remember them. A sense of powerful awe attends these forgotten moments and this dream also comes up on me with an irregular frequency. Both of them seemed prophetic.

We have been lulled into a sense of false security because so many of us thought that various things should have happened some time ago. For many, the passing of 2012 was a landmark non event. So many things continue to tremble on the verge and many of us have reached an accommodation concerning this. It's a form of uneasy complacency. Be not deceived. The reason for this inexplicable (boy, I sure seem to like that word) extended time period, is that it is an opportunity from providence to get our act together. It is also there to give us a chance, all of us (as if we have not been given so many chances already) to rise to the occasion because many of these things do not have to happen. They do not have to happen. They will only happen if there is no alternative and that is up to us, both collectively AND individually. Whatever the fate of another, it does not have to include you. Don't let the wrong magnetism overwhelm you. There are all sorts of practices that one can engage in which neutralize the pull. What needs to be remembered is that when we are not consistent in this, the negative magnetism does not take the day off. Evil doesn't rest. It can't.

There are various ways to look at the world. You can see it as random happenstance and many people do. Viewing it from this perspective robs it of all meaning and plays havoc with moral compasses. You can see it as an orchestrated symphony, with a conductor, this connects you to the inner ear, so that you can hear the music and the byproduct of that, is harmony. You can see it as flat inevitables of the observable stages. This steals your joy. Due to the manipulation of Christian scriptures, many people believe that they have only one life. This is absurd and I won't even get into the argument(s) to the contrary. What is true is that a human birth is more rare than most imagine it to be and yet... this does not have to be the case. One needs only to properly focus on what is real, according to the footsteps of those walking in the right direction and those are not hard to find because in that direction there are not many footprints. ♫Try to make it real compared to what?♫

Run with the crowd and die with the crowd. Walk the solitary road and disappear from the eyes of the world. Every one of us has a spark of something within them. What we lack is ignition and that comes about through mysterious contact. Of course, having a piece of flint and an industrious nature, you never know. There is not a one of us who might be reading this that lacks the possibility and as I've said by analogy; if you pick up the guitar and play at odd intervals for half an hour here and there you're going to get the degree of ability and performance you put into it. If you're at it for a few hours a day the results will soon be significant and if you play all the time you will be able to do it at a professional level soon enough and that translates into every area of endeavor that the mind is capable of imagining, no matter how decent, useful or productive it may be, or how indecent, useless and not productive it may be. That's how it works. So many people go around bemoaning their state. Often times they are trying to succeed at something they have no emotional connection to, so where's the charge? Where's the connection? ♫connection, I just can't get no connection♫ Even if you have to work for free at something you do feel connected to, you will find success or be routed toward some higher octave of the same.

People talks about the laws of Nature and fail to realize that they are aware of only a few of them. This should be a concern. Who is going to hip you to these mysterious laws? Well, consider the source; where do they come from? That's something Lao Tzu had down and he was rewarded commensurately for his due diligence to what's important, as compared to what amounts to pissing into the wind. The story goes that, disappointed with the state of humanity and recognizing there was nothing he could do beyond what he had done, he got on a water buffalo and rode out through the great wall of China to parts unknown,. Before he was allowed to leave, the door warden, who was also an initiate, prevailed upon him to sit down and write out his wisdom, on whatever medium they were using back in the day. Thanks to him we have what we have today, where it sits, for the most part idle, while Kim Kardashian and Piers Morgan do their dog and pony show, on the main stage, under the big tent. It will always be a matter of priorities and the personal determination of what those priorities are.

Your real progress and attendant rewards may be invisible to you for some time. That's to sort out the uncommitted and insincere. Once past that period of trial, you only have to put one foot in front of you and keep your attention on the light. You'll know when you've gone off the path because you won't be able to see where you're going anymore. That should be evidence enough for anyone but... strangely enough sometimes it is not. You would think that the pornographically rich would realize that they should keep their excesses private but they cannot. You would think that the Zionistas would realize that what they do is best performed under the cover of darkness but they do not. You would think a lot of things would occur to a lot of people but... so it goes.


End Transmission.......

US bank depositors set up for the slaughter

Nesara
They have already set legal precedence here in the U.S. with the Sentinel case, haven’t they??
Effectively turning all depositors into shareholders in the institutions where they deposit their money.  
According to a federal appeals court ruling, Thursday, Bank of New York Mellon’s secured loan will be put ahead of customer segregated accounts held by Sentinel—a landmark ruling that turns individual segregated accounts into the property of a third party under circumstances of duress. In other words, if a financial institution fails, clients, depositors and pension funds may not get some or all of their money back in a bankruptcy.
In essence, under the ruling, Securities Investor Protection Corporation (SPIC), Federal Deposit Insurance Corporation (FDIC) and other insurance programs no longer will/can protect customer funds, leaving millions of investors, depositors and retirees unaware that they are no longer account holders of their own funds, per se, but, instead, have suddenly become stockholders of the institution with which they have deposited their money.
http://dl.dropbox.com/u/32961642/SentinelRuling.pdf
http://nesaranews.blogspot.com/2013/03/us-bank-depositors-set-up-for-slaughter.html

Clarke and Dawe - Quantitative Easing

Funny clip.  Don't skip the ending.
The Aussie satirists take on Bernanke while explaining the finer points of QE.

Reggie Middleton on the Keiser Report Discussing Cyprus Manufactured Ban...

MONEY AS RELIGION

Money was originally invented as a store of value, to facilitate trade. But in recent decades money as it is created today has no value at all. It is just pretty printed paper with no intrinsic worth. The only value is in the mind of the holder, whihc means money is no longer a unit of worth but an article of faith! As such, money is the new religion, supporting a system that operates solely on the belief of the public that this is the way things are supposed to be.
Which means this war to conquer the oil states and force them to use the dollar as currency amounts to a new Holy Crusade, displacing one set of beliefs (in an "heretical" currency) with belief on the "One True Currency".
We really have not evolved at all from the days when Saracens were slaughtered for refusing to believe as they were told to believe. Only the swords are different.

Senate approves Democratic budget after marathon ‘vote-a-rama’

Fox News
WASHINGTON –  An exhausted Senate approved its first budget in four years early Saturday, calling for almost $1 trillion in tax increases over the coming decade while sheltering safety net programs targeted by House Republicans.
Despite the fanfare — and the spectacle of senators lingering for hours into the weekend to vote on dozens of amendments before the final tally — the budget passed by the smallest of margins, 50-49. Four Democrats facing tough re-elections voted against it.
The resolution also stands no chance of passing Congress in its current form. The nonbinding but politically symbolic measure caters to party stalwarts on the liberal edge of the spectrum just as the House GOP measure is crafted to appeal to more recent tea party arrivals.
The vote, though, follows four years of pressure and taunting by House Republicans who excoriated the Senate for failing to approve a formal year-long budget throughout most of President Obama’s first term. The government has been limping by on a series of partial-year budget bills, the latest of which was approved this week to fund the rest of fiscal 2013.
The final vote early Saturday morning was preceded by a marathon session of votes on dozens of amendments to the 2014 budget proposal. Many of the proposals were offered in hopes of inflicting political damage on Democratic senators up for re-election in GOP-leaning states like Alaska and Louisiana.
The two main budget proposals produced by Senate Democrats and House Republicans are miles apart. The Senate plan does not attempt to balance the budget at all, though it does claim to reduce the deficit by imposing nearly $1 trillion in tax increases on top of more than $600 billion in higher taxes on top earners enacted in January. It also includes $875 billion in spending cuts, generated by modest cuts to federal health care programs, domestic agencies and the Pentagon and reduced government borrowing costs.
The House plan — by House Budget Committee Chairman Paul Ryan, R-Wis., his party’s vice presidential candidate last year — claims $4 trillion more in savings over the period than Senate Democrats by imposing major cuts in Medicaid, food stamps and other safety net programs for the needy. It would also transform the Medicare health care program for seniors into a voucher-like system for future recipients.
“We have presented very different visions for how our country should work and who it should work for,” said Sen. Patty Murray, D-Wash., who chairs the Senate Budget Committee. “But I am hopeful that we can bridge this divide.”
Congressional budgets are planning documents that leave actual changes in revenues and spending for later legislation, and this was the first the Democratic-run Senate has approved in four years. That is testament to the political and mathematical contortions needed to write fiscal plans in an era of record-breaking deficits that until this year exceeded an eye-popping $1 trillion annually, and to the parties’ profoundly conflicting views.
“I believe we’re in denial about the financial condition of our country,” Sen. Jeff Sessions of Alabama, top Republican on the Budget panel, said of Democratic efforts to boost spending on some programs. “Trust me, we’ve got to have some spending reductions.”
Though the shortfalls have shown signs of easing slightly and temporarily, there is no easy path to the two parties finding compromise — which the first months of 2013 have amply illustrated.
Already this year, Congress has raised taxes on top earners after narrowly averting tax boosts on virtually everyone else, tolerated $85 billion in automatic spending cuts, temporarily sidestepped a federal default and prevented a potential government shutdown.
By sometime this summer, the government’s borrowing limit will have to be extended again — or a default will be at risk — and it is unclear what Republicans may demand for providing needed votes. It is also uncertain how the two parties will resolve the differences between their two budgets, something many believe simply won’t happen.
Both sides have expressed a desire to reduce federal deficits. But President Barack Obama is demanding a combination of tax increases and spending cuts to do so, while GOP leaders say they won’t consider higher revenues but want serious reductions in Medicare and other benefit programs that have rocketed deficits skyward.
Obama plans to release his own 2014 budget next month, an unveiling that will be studied for whether it signals a willingness to engage Republicans in negotiations or play political hardball.
In a long day that began Friday morning, senators plodded through scores of amendments — all of them non-binding but some delivering potent political messages.
They voted in favor of giving states more powers to collect sales taxes on online purchases their citizens make from out-of-state Internet companies, and to endorse the proposed Keystone XL pipeline that is to pump oil from Canada to Texas refineries.
They also approved amendments voicing support for eliminating the $2,500 annual cap on flexible spending account contributions imposed by Obama’s health care overhaul, and for charging regular postal rates for mailings by political parties, which currently qualify for the lower prices paid by non-profits.
In a rebuke to one of the Senate’s most conservative members, they overwhelmingly rejected a proposal by Sen. Rand Paul, R-Ky., to cut even deeper than the House GOP budget and eliminate deficits in just five years.
The Democratic budget envisions $975 billion in unspecified new taxes over the coming 10 years. There would be an equal amount of spending reductions coming chiefly from health programs, defense and reduced interest payments as deficits get smaller than previously anticipated.
This year’s projected deficit of nearly $900 billion would fall to around $700 billion next year and bottom out near $400 billion in 2016 before trending upward again.
Shoehorned into the package is $100 billion for public works projects and other programs aimed at creating jobs.
The Associated Press contributed to this report.
Read more: http://www.foxnews.com/politics/2013/03/23/senate-approves-first-budget-proposal-in-4-years/#ixzz2OMtwqZ4G

the streets of america in the very near future…

We’ve seen it time and again over the last five years. Governments overstepping their authority and punishing their people because of the actions of elite banking conglomerates, dirty politicians and bought-off regulators.

Iceland, Greece, Ireland, Hungary, Argentina, Spain, and Portugal have all been pillaged in the name of purported recovery and stability.

Today we’re seeing it in Cyprus, where Euro Zone financiers have threatened to not only rob the populace of their personal savings, but shut off access to bank accounts indefinitely. And, as we’ve seen elsewhere, the people are having none of it.

Like the aftermath of Hurricane Sandy, it took a mere 72 hours of restricted access to funds, and thus essential goods, before the people took to the streets in mass protest and rioting.

The following pictures depict what’s in store for the United States in the very near future, when our own banking system re-collapses and Americans are left with no ability to access their money or are restricted to how much cash they are able to withdraw.

When the banks close your only option will be ATM’s, most of which will be empty:

(Images Courtesy of Zero Hedge)

And within 72 hours, when the realization of the magnitude of this event takes hold, people will no longer stand in line peacefully, but rather, will storm their banks and government offices, just as they have done in Cyprus (and elsewhere).

There is one key distinction to consider between the rioting in Cyprus and what we’ll experience here in the United States.

You see, the US government and the Pentagon have been actively war-gaming this very scenario for years. They know an economic  collapse and the civil unrest that follows is an inevitable outcome of our current paradigm. Thus, they have spent the better part of this crisis training the National Guard to respond to mass riots, along with coordinated exercises that involve local law enforcement and military forces.

There’s a reason that Department of Homeland Security has stockpiled nearly two billion rounds of ammunition.

What’s waiting for Americans when this goes down is starkly different from the response by government officials in other parts of the world.

A financial collapse in this country cannot be avoided. Do everything you can now to ensure you aren’t part of the mob when it happens.

America: The New Saudi Arabia?

by F. William Engdahl

At a time when much of the world is looking with a mix of envy and excitement at the recent boom in USA unconventional gas from shale rock, when countries from China to Poland to France to the UK are beginning to launch their own ventures into unconventional shale gas extraction, hoping it is the cure for their energy woes, the US shale boom is revealing itself to have been a gigantic hyped confidence bubble that is already beginning to deflate. Carpe diem!

If we’re to believe the current media reports out of Washington and the US oil and gas industry, the United States is about to become the “new Saudi Arabia.” We are told she is suddenly and miraculously on the track to energy self-sufficiency. No longer need the US economy depend on high-risk oil or gas from the politically unstable Middle East or African countries. The Obama White House energy adviser, Heather Zichal, has even shifted her focus from pushing carbon cap ‘n trade schemes to promoting America’s “shale revolution.” [1]

In his January 2012 State of the Union Address to Congress, President Obama claimed that, largely owing to the shale gas revolution, “We have a supply of natural gas that can last America nearly 100 years.” [2]
Renowned energy experts like Cambridge Energy Research’s Daniel Yergin in recent Congressional testimony waxed almost poetic about the purported benefits of the recent US shale oil and gas exploitation: “The United States is in the midst of the ‘unconventional revolution in oil and gas’ that, it becomes increasingly apparent, goes beyond energy itself.” He didn’t explain what exactly energy going beyond energy itself means. He also claimed that “the industry supports 1.7 million jobs – a considerable accomplishment given the relative newness of the technology. That number could rise to 3 million by 2020.” [3] Very impressive numbers.
Mr Yergin went on to suggest a major geopolitical dimension of America’s shale oil and gas industry, saying “expansion of US energy exports will add an additional dimension to US influence in the world…Shale gas has risen from two percent of domestic production a decade ago to 37 percent of supply, and prices have dropped dramatically. US oil output, instead of continuing its long decline, has increased dramatically – by about 38 percent since 2008. Just the increase since 2008 is equivalent to the entire output of Nigeria, the seventh-largest producing country in OPEC…People talk about the potential geopolitical impact of the shale gas and tight oil. That impact is already here…” [4]
In their Energy Outlook to 2030, published in 2012, BP’s CEO Bob Dudley sounded a similar upbeat projection of the role of shale gas and oil in making North America energy independent of the Middle East. BP predicted that growth in shale oil and gas supplies—“along with other fuel sources”—will make the western hemisphere virtually self-sufficient in energy by 2030. In a development with enormous geopolitical implications, a large swath of the world including North and South America would see its dependence on oil imports from potentially volatile countries in the Middle East and elsewhere disappear, BP added. [5]
There’s only one thing wrong with all the predictions of a revitalized United States energy superpower flooding the world with its shale oil and shale gas. It’s based on a bubble, on hype from the usual Wall Street spin doctors. In reality it is becoming increasingly clear that the shale revolution is a short-term flash in the energy pan, a new Ponzi fraud, carefully built with the aid of the same Wall Street banks and their “market analyst” friends, many of whom brought us the 2000 “dot.com” bubble and, more spectacularly, the 2002-2007 US real estate securitization bubble. A more careful look at the actual performance of the shale revolution and its true costs is instructive.

Halliburton Loopholes

One reason we hear little about the declining fortunes of shale gas and oil is that the boom is so recent, reaching significant proportions only in 2009-2010. Long-term field extraction data for a significant number of shale gas wells only recently is coming to light. Another reason is that there have grown up huge vested corporate interests from Wall Street to the oil industry who are trying everything possible to keep the shale revolution myth alive. Despite all their efforts however, data coming to light, mostly for the review of industry professionals, is alarming.
Shale gas has recently come onto the gas market in the US via use of several combined techniques developed among others by Dick Cheney’s old company, Halliburton Inc. Halliburton several years ago combined new methods for drilling in a horizontal direction with injection of chemicals and “fracking,” or hydraulic fracturing of the shale rock formations that often trap volumes of natural gas. Until certain changes in the last few years, shale gas was considered uneconomical. Because of the extraction method, shale gas is dubbed unconventional and is extracted in far different ways from conventional gas.
The US Department of Energy’ EIA defines conventional oil and gas as oil and gas “produced by a well drilled into a geologic formation in which the reservoir and fluid characteristics permit the oil and natural gas to readily flow to the wellbore.” Conversely, unconventional hydrocarbon production doesn’t meet these criteria, either because geological formations present a very low level of porosity and permeability, or because the fluids have a density approaching or even exceeding that of water, so that they cannot be produced, transported, and refined by conventional methods. By definition then, unconventional oil and gas are far more costly and difficult to extract than conventional, one reason they only became attractive when oil prices soared above $100 a barrel in early 2008 and more or less remained there.
To extract the unconventional shale gas, a hydraulic fracture is formed by pumping a fracturing fluid into the wellbore at sufficient pressure causing the porous shale rock strata to crack. The fracture fluid, whose precise contents are usually company secret and extremely toxic, continues further into the rock, extending the crack. The trick is to then prevent the fracture from closing and ending the supply of gas or oil to the well. Because in a typical fracked well fluid volumes number in millions of gallons of water, water mixed with toxic chemicals, fluid leak-off or loss of fracturing fluid from the fracture channel into the surrounding permeable rock takes place. If not controlled properly, that fluid leak-off can exceed 70% of the injected volume resulting in formation matrix damage, adverse formation fluid interactions, or altered fracture geometry and thereby decreased production efficiency. [6]
Hydraulic fracturing has recently become the preferred US method of extracting unconventional oil and gas resources. In North America, some estimate that hydraulic fracturing will account for nearly 70% of natural gas development in the future.
Why have we just now seen the boom in fracking shale rock to get gas and oil? Thank then-Vice president Dick Cheney and friends. The real reason for the recent explosion of fracking in the United States was passage of legislation in 2005 by the US Congress that exempted the oil industry’s hydraulic fracking, astonishing as it sounds, from any regulatory supervision by the US Environmental Protection Agency (EPA) under the Safe Drinking Water Act. The oil and gas industry is the only industry in America that is allowed by EPA to inject known hazardous materials – unchecked – directly into or adjacent to underground drinking water supplies. [7]
The 2005 law is known as the “Halliburton Loophole.” That’s because it was introduced on massive lobbying pressure from the company that produces the lion’s share of chemical hydraulic fracking fluids – Dick Cheney’s old company, Halliburton. When he became Vice President under George W. Bush in early 2001, Cheney immediately got Presidential responsibility for a major Energy Task Force to make a comprehensive national energy strategy. Aside from looking at Iraq oil potentials as documents later revealed, the energy task force used Cheney’s considerable political muscle and industry lobbying money to win exemption from the Safe Drinking Water Act. [8]
During Cheney’s term as vice president he moved to make sure the Government’s Environmental Protection Agency (EPA) would give a green light to a major expansion of shale gas drilling in the US.
In 2004 the EPA issued a study of the environmental effects of fracking. That study has been called “scientifically unsound” by EPA whistleblower Weston Wilson. In March of 2005, EPA Inspector General Nikki Tinsley found enough evidence of potential mishandling of the EPA hydraulic fracturing study to justify a review of Wilson’s complaints. The Oil and Gas Accountability Project conducted a review of the EPA study which found that EPA removed information from earlier drafts that suggested unregulated fracturing poses a threat to human health, and that the Agency did not include information that suggests “fracturing fluids may pose a threat to drinking water long after drilling operations are completed.” [9] Under political pressure the report was ignored. Fracking went full-speed ahead.

Fracking toxic waste. This diagram depicts methane gas and toxic water contaminating the drinking water as the fracturing cracks penetrate the water table

© n/a

The Halliburton Loophole is no minor affair. The process of hydraulic fracking to extract gas involves staggering volumes of water and of some of the most toxic chemicals known. Water is essential to shale gas fracking. Hydraulic fracturing uses between 1.2 and 3.5 million US gallons (4.5 and 13 million liters) of water per well, with large projects using up to 5 million US gallons (19 Million liters). Additional water is used when wells are refractured; this may be done several times. An average well requires 3 to 8 million US gallons of water over its lifetime. [10] Entire farm regions of Pennsylvania and other states with widespread hydraulic fracking report their well water sources have become so toxic as to make the water undrinkable. In some cases fracked gas seeps into the home via the normal water faucet.

Gasland – Rural resident flicking on cigarette lighter next to his kitchen faucet and watching his drinking water, infused with gas and chemicals, ignite in flames as high as 3 feet.

© Screenshot from HBO film

During the uproar over the BP Deepwater Horizon Gulf of Mexico oil spill, the Obama Administration and the Energy Department formed an Advisory Commission on Shale Gas, ostensibly to examine the growing charges of environmental hazards from shale gas practices.
Their report was released in November 2011. It was what could only be called a “whitewash” of the dangers and benefits of shale gas.
The commission was headed by former CIA director John M. Deutch. Deutch himself is not neutral. He sits on the board of the LNG gas company Cheniere Energy. Deutch’s Cheniere Energy’s Sabine Pass project is one of only two current US projects to create an LNG terminal to export US shale gas to foreign markets. [11]
Deutch is also on the board of Citigroup, one of the world’s most active energy industry banks, tied to the Rockefeller family. He also sits on the board of Schlumberger, which along with Halliburton, is one of the leading companies doing hydraulic fracking. In fact, of the seven panel members, six had ties to the energy industry, including fellow Deutch panel member and shale fracking booster, Daniel Yergin, himself a member of the National Petroleum Council. Little surprise that the Deutch report called shale gas, “the best piece of news about energy in the last 50 years.” Deutch added, “Over the long term it has the potential to displace liquid fuels in the United States.” [12]

Shale gas: Racing against the Clock

With regulatory free-rein, now also backed by the Obama Administration, the US oil and gas industry went full-power into shale gas extraction, taking advantage of high oil and natural gas prices to reap billions in quick gains.
According to official US Department of Energy Energy Information Administration data, shale gas extraction ballooned from just under 2 million MCF in 2007, the first year data was tracked, to more than 8,500,000 Mcf by 2011, a fourfold rise to comprise almost 40% of total dry natural gas extraction in the USA that year. In 2002 shale gas was a mere 3% of total gas. [13]

Here enters the paradox of the US “shale gas revolution.” Since the days of oil production wars more than a century ago, various industry initiatives had been created to prevent oil and later gas price collapse due to over-production. During the 1930’s there was discovery of the huge East Texas oilfields, and a collapse of oil prices. The State of Texas, whose Railroad Commission (TRC) had been given regulatory powers not only over railroads but also over oil and gas production in what then was the world’s most important oil producing region, was called in to arbitrate the oil wars. That resulted in daily statewide production quotas so successful that OPEC later modeled itself on the TRC experience.
Today, with federal deregulation of the oil and gas industry, such extraction controls are absent as every shale gas producer from BP to Chesapeake Energy, Anadarko Petroleum, Chevron, Encana and others all raced full-tilt to extract the maximum shale gas from their properties.
The reason for the full-throttle extraction is telling. Shale Gas, unlike conventional gas, depletes dramatically faster owing to its specific geological location. It diffuses and becomes impossible to extract without the drilling of costly new wells.
The result of the rapidly rising volumes of shale gas suddenly on the market was a devastating collapse in the market price of that same gas. In 2005 when Cheney got the EPA exemption that began the shale boom, the marker US gas price measured at Henry Hub in Louisiana, at the intersection of nine interstate pipelines, was some $14 per thousand cubic feet. By February 2011 it had plunged amid a gas glut to $3.88. Currently prices hover around $3.50 per tcf. [14]
In a sobering report, Arthur Berman, a veteran petroleum geologist specialized in well assessment, using existing well extraction data for major shale gas regions in the US since the boom started, reached sobering conclusions. His findings point to a new Ponzi scheme which well might play out in a colossal gas bust over the next months or at best, the next two or three years. Shale gas is anything but the “energy revolution” that will give US consumers or the world gas for 100 years as President Obama was told.
Berman wrote already in 2011, “Facts indicate that most wells are not commercial at current gas prices and require prices at least in the range of $8.00 to $9.00/mcf to break even on full-cycle prices, and $5.00 to $6.00/mcf on point-forward prices. Our price forecasts ($4.00-4.55/mcf average through 2012) are below $8.00/mcf for the next 18 months. It is, therefore, possible that some producers will be unable to maintain present drilling levels from cash flow, joint ventures, asset sales and stock offerings.” [15]
Berman continued, “Decline rates indicate that a decrease in drilling by any of the major producers in the shale gas plays would reveal the insecurity of supply. This is especially true in the case of the Haynesville Shale play where initial rates are about three times higher than in the Barnett or Fayetteville. Already, rig rates are dropping in the Haynesville as operators shift emphasis to more liquid-prone objectives that have even lower gas rates. This might create doubt about the paradigm of cheap and abundant shale gas supply and have a cascading effect on confidence and capital availability.” [16]

What Berman and others have also concluded is that the gas industry key players and their Wall Street bankers backing the shale boom have grossly inflated the volumes of recoverable shale gas reserves and hence its expected supply duration. He notes, “Reserves and economics depend on estimated ultimate recoveries (EUR) based on hyperbolic, or increasingly flattening, decline profiles that predict decades of commercial production. With only a few years of production history in most of these plays, this model has not been shown to be correct, and may be overly optimistic….Our analysis of shale gas well decline trends indicates that the Estimated Ultimate Recovery per well is approximately one-half the values commonly presented by operators.” [17] In brief, the gas producers have built the illusion that their unconventional and increasingly costly shale gas will last for decades.
Basing his analysis on actual well data from major shale gas regions in the US, Berman concludes however, that the shale gas wells decline in production volumes at an exponential rate and are liable to run out far faster than being hyped to the market. Could this be the reason financially exposed US shale gas producers, loaded with billions of dollars in potential lease properties bought during the peak of prices, have recently been desperately trying to sell off their shale properties to naïve foreign or other investors?
Berman concludes:
Three decades of natural gas extraction from tight sandstone and coal-bed methane show that profits are marginal in low permeability reservoirs. Shale reservoirs have orders of magnitude lower reservoir permeability than tight sandstone and coal-bed methane. So why do smart analysts blindly accept that commercial results in shale plays should be different? The simple answer is found in high initial production rates. Unfortunately, these high initial rates are made up for by shorter lifespan wells and additional costs associated with well re-stimulation. Those who expect the long-term unit cost of shale gas to be less than that of other unconventional gas resources will be disappointed…the true structural cost of shale gas production is higher than present prices can support ($4.15/mcf average price for the year ending July 30, 2011), and that per-well reserves are about one-half of the volumes claimed by operators. [18]
Therein lies the explanation for why a sophisticated oil industry in the United States has desperately been producing full-throttle, in a high-stakes game laying the seeds of their own bankruptcy in the process—They are racing to offload the increasingly unprofitable shale assets before the bubble finally bursts. Wall Street financial backers are in on the Ponzi game with billions at stake, much as in the recent real estate securitization fraud.

One Hundred Years of Gas?

Where then did someone get the number to tell the US President that America had 100 years of gas supply? Here is where lies, damn lies and statistics play a crucial role. The US does not have 100 years of natural gas supply from shale or unconventional sources. That number came from a deliberate blurring by someone of the fundamental difference between what in oil and gas is termed resources and what is called reserves.
A gas or oil resource is the totality of the gas or oil originally existing on or within the earth’s crust in naturally occurring accumulations, including discovered and undiscovered, recoverable and unrecoverable. It is the total estimate, irrespective of whether the gas or oil is commercially recoverable. It’s also the least interesting number for extraction.
On the other hand “recoverable” oil or gas refers to the estimated volume commercially extractable with a specific technically feasible recovery project, a drilling plan, fracking program and the like. The industry breaks the resources into three categories: reserves, which are discovered and commercially recoverable; contingent resources, which are discovered and potentially recoverable but sub-commercial or non-economic in today’s cost-benefit regime; and prospective resources, which are undiscovered and only potentially recoverable. [19]
The Potential Gas Committee (PGC), the standard for US gas resource assessments, uses three categories of technically recoverable gas resources, including shale gas: probable, possible and speculative.
According to careful examination of the numbers it is clear that the President, his advisers and others have taken the PGC’s latest total of all three categories, or 2,170 trillion cubic feet (Tcf) of gas—probable, possible and purely speculative—and divided by the 2010 annual consumption of 24 Tcf. To get a number between 90 and 100 years of gas. What is conveniently left unsaid is that most of that total resource is in accumulations too small to be produced at any price, inaccessible to drilling, or is too deep to recover economically. [20]
Arthur Berman in another analysis points out that if we use more conservative and realistic assumptions such as the PGC does in its detailed assessment, more relevant is the Committee’s probable mean resources value of 550 (Tcf) of gas. In turn, if we estimate, also conservatively and realistically based on experience, that about half of this resource actually becomes a reserve (225 Tcf), then the US has approximately 11.5 years of potential future gas supply at present consumption rates.
If we include proved reserves of 273 Tcf, there is an additional 11.5 years of supply for a total of almost 23 years. It is worth noting that proved reserves include proved undeveloped reserves which may or may not be produced depending on economics, so even 23 years of supply is tenuous. If consumption increases, this supply will be exhausted in less than 23 years. [21]
There are also widely differing estimates within the US Government over shale gas recoverable resources. The US Department of Energy EIA uses a very generous calculation for shale gas average recovery efficiency of 13% versus other conservative estimates of about half that or 7% in contrast to recovery efficiencies of 75-80% for conventional gas fields. The generously high recovery efficiency values used for EIA calculations allows the EIA to project an estimate of 482 tcf of recoverable gas for the US. In August 2011, the Interior Department’s US Geological Survey (USGS) released a far more sober estimate for the large shale plays in Pennsylvania and New York called Marcellus Shale. The USGS estimated there are about 84 trillion cubic feet of technically-recoverable natural gas under the Marcellus Shale. Previous estimates from the Energy Information Administration put the figures at 410 trillion cubic feet. [22]
Shale gas plays show unusually high field decline rates with very steep trends, a combination giving low recovery efficiencies. [23]

Huge shale gas losses

Given the abnormally rapid well decline rates and low recovery efficiencies, it is little wonder that once the euphoria subsided, shale gas producers found themselves sitting on a financial time-bomb and began selling assets to unwary investors as fast as possible.
In a very recent analysis of the actual results of several years of shale gas extraction in the USA as well as the huge and high-cost Canadian Tar Sands oil, David Hughes notes, “Shale gas production has grown explosively to account for nearly 40 percent of US natural gas production. Nevertheless, production has been on a plateau since December 2011; 80 percent of shale gas production comes from five plays, several of which are in decline. The very high decline rates of shale gas wells require continuous inputs of capital—estimated at $42 billion per year to drill more than 7,000 wells—in order to maintain production. In comparison, the value of shale gas produced in 2012 was just $32.5 billion.” [24]
He adds, “The best shale plays, like the Haynesville (which is already in decline) are relatively rare, and the number of wells and capital input required to maintain production will increase going forward as the best areas within these plays are depleted. High collateral environmental impacts have been followed by pushback from citizens, resulting in moratoriums in New York State and Maryland and protests in other states. Shale gas production growth has been offset by declines in conventional gas production, resulting in only modest gas production growth overall. Moreover, the basic economic viability of many shale gas plays is questionable in the current gas price environment.” [25]
If these various estimates are anywhere near accurate, the USA has a resource in unconventional shale gas of anywhere between 11 years and 23 years duration and unconventional oil of perhaps a decade before entering steep decline. The recent rhetoric about US “energy independence” at the current technological state is utter nonsense.
The drilling boom which resulted in this recent glut of shale gas was in part motivated by “held-by-production” shale lease deals with landowners. In such deals the gas company is required to begin drilling in a lease running typically 3-5 years, or forfeit. In the US landowners such as farmers or ranchers typically hold subsurface mineral rights and can lease them out to oil companies. The gas (or oil) company then is under enormous pressure to book gas reserves on the new leases to support company stock prices on the stock market against which it has borrowed heavily to drill.
This “drill or lose it” pressure typically has led companies to seek the juiciest “sweet spots” for fast spectacular gas flows. These are then typically promoted as “typical” of the entire play.
However, as Hughes points out, “High productivity shale plays are not ubiquitous, and relatively small sweet spots within plays offer the most potential. Six of thirty shale plays provide 88 percent of production. Individual well decline rates are high, ranging from 79 to 95 percent after 36 months. Although some wells can be extremely productive, they are typically a small percentage of the total and are concentrated in sweet spots.” [26]

One estimate of projected shale gas decline suggests the peak will pass well before the end of the decade, perhaps in four years, followed with a rapid decline in volume

The extremely rapid overall gas field declines require from 30 to 50 percent of production to be replaced annually with more drilling, a classic “tiger chasing its tail around the tree” syndrome. This translates to $42 billion of annual capital investment just to maintain current production. By comparison, all USA shale gas produced in 2012 was worth about $32.5 billion at a gas price of $3.40/mcf (which is higher than actual well head prices for most of 2012). That means about a net $10 billion loss on their shale gambles last year for all US shale gas producers.
Even worse, Hughes points out that capital inputs to offset field decline will necessarily increase going forward as the sweet spots within plays are drilled off and drilling moves to lower quality areas. Average well quality (as measured by initial productivity) has fallen nearly 20 percent in the Haynesville, the most productive shale gas play in the US. And it is falling or flat in eight of the top ten plays. Overall well quality is declining for 36 percent of US shale gas production and is flat for 34 percent. [27]
Not surprising in this context, the major shale gas players have been making massive write-downs of their assets to reflect the new reality. Companies began in 2012 reassessing their reserves and, in the face of a gas spot price that was cut in half between July 2011 and July 2012, are being forced to admit that the long-term outlook for natural-gas prices is not positive. The write-downs have a domino effect as bank lending is typically tied to a company’s reserves meaning many companies are being forced to renegotiate credit lines or make distress asset sales to raise cash.
Beginning August 2012, many large shale gas producers in the US were forced to announce major write-downs of the value of their shale gas assets. BP announced write-downs of $4.8 billion, including a $1 billion-plus reduction in the value of its American shale gas assets. England’s BG Group made a $1.3 billion write-down of its US shale gas interests, and Encana, a large Canadian shale gas operator made a $1.7 billion write-down on shale assets in the US and Canada, accompanied by a warning that more were likely if gas prices did not recover. [28]
The Australian mining giant BHP Billiton is one of the worst hit in the US shale gas bubble as it came in late and big-time. In May, 2012 it announced it was considering taking impairments on the value its US shale-gas assets which it had bought at the peak of the shale gas boom in 2011, when the company paid $4.75 billion to buy shale projects from Chesapeake Energy and acquiring Petrohawk Energy for $15.1 billion. [29]
But by far the worst hit is the once-superstar of shale gas, Oklahoma-based Chesapeake Energy.

Chesapeake Energy: The Next Enron?

The company by most accounts that typifies this shale gas boom-bust bubble is the much-hailed leading player in shale, Chesapeake Energy. In August 2012 there were widespread rumors that the company would declare bankruptcy. That would have been embarrassing for the company that was the nation’s second largest gas producer. It would also have signaled to the world the hype that was behind promotion of a “shale energy revolution” from the likes of Yergin and the Wall Street energy promoters looking to earn billions on M&A and other deals in the sector to replace their dismal real estate experiences.
In May 2012, Bill Powers of the Powers Energy Investor, wrote of Chesapeake (CHK by its stock symbl): “Over the past year, however, CHK’s business model has broken down. The company’s shares continue to break to 52-week lows and the company has a funding issue—financial speak for the company is running out of money. While it was able to farm-out a portion of its Utica Shale assets in Ohio to France’s Total last year—this is remarkable given the accounting errors that resulted in Total receiving significantly less revenue from their Barnett Shale joint-venture—CHK has largely run out of prospective acreage to farm-out.” Powers estimated a $3 billion cash shortfall in 2012 for the company. That comes atop already huge corporate debt of $11.1 billion of which $1.7 billion was a revolving line of credit. [30]
Powers adds, “When the off-balance sheet debt and preferred issues are added to the company’s existing $11.1 billion of on-balance sheet debt, CHK’s has a whopping $20.5 billion of financial obligations. Given such a high level of indebtedness, CHK debt is rated junk and will be for the foreseeable future. “ He concludes, “Having America’s second largest natural gas producer as well as its most reckless destroyer of shareholder capital almost completely walk away from the shale gas business is a great indication that today’s natural gas price bubble is on the verge of popping. CHK has not made any money by drilling shale wells—and neither have virtually any of its peers—and now the dumb money has run out.” [31]
Angry shareholders forced a major shakeup of the Chesapeake board last September after a Reuters report that CEO Aubrey McClendon had been taking out large loans not fully disclosed to the company’s board or investors. McClendon was forced to resign as Chairman of the company he founded after details leaked out that McClendon has borrowed as much as $1.1 billion in the last three years by pledging his stake in the company’s oil and natural gas wells as collateral. [32] In March 2013 the US Government Securities and Exchange Commission (SEC) announced that it was investigating the company and Chief Executive Aubrey McClendon and had issued subpoenas for information and testimony, among other items looking into a controversial program that grants McClendon a share in every well that Chesapeake drills. [33]
The company is in the midst of a major asset sale of an estimated $6.9 billion to lower debt, including oil and gasfields covering roughly 2.4 million acres. It must invest heavily in drilling new wells to deliver the increased production of more lucrative oil and natural gas liquids, if it is to avoid bankruptcy. [34] As one critical analyst of Chesapeake put it, “the company’s complex accounting methods make it almost impossible for analysts and stockholders to determine what the risks really are. The fact that the CEO is taking out billion-dollar loans and not openly disclosing them only furthers the perception that everything is not as it appears at Chesapeake – that the company is Enron with drilling rigs.” [35]
The much-touted shale gas revolution in the USA is collapsing along with the stock shares of Chesapeake and other key players.

Deutsche Bank cuts reported profit to cover legal costs

Move linked to US mortgage lawsuits and other regulatory probes

Deutsche Bank said it would lower its 2012 pretax profit after it was hit by new charges related to mortgage-related lawsuits. Photograph: Kai Pfaffenbach/Reuters.

Deutsche Bank AG, continental Europe's biggest bank, cut its reported profit for 2012 after setting aside additional money to cover legal costs linked to US mortgage lawsuits and other regulatory inquiries.

The company increased the reserves by 33 per cent to €2.4 billion, lowering 2012 profit after tax by about €400 million to €291 million, the Frankfurt- based bank said in a statement today.

The firm reiterated its dividend and capital targets. Christian Streckert, a spokesman, declined to give further details on what prompted the decision.

The world's biggest banks are facing a series of regulatory probes and lawsuits linked to the alleged manipulation of benchmark interest rates as well as the mis-selling of products such as interest-rate derivatives.

Deutsche Bank said in October it's a defendant in "numerous" civil suits as an issuer or underwriter in residential mortgage-backed securities.

“Deutsche Bank has had to be very careful about litigation given that they're really in the firing line from investors and regulators on this," Christian Hamann, an analyst at Hamburger Sparkasse who is advising clients to sell the share, said by telephone from Hamburg, Germany.

“They were probably too optimistic when they presented the preliminary numbers, but one can see from the share price that the market isn't concerned as the targets were confirmed."

Deutsche Bank climbed 1.2 per cent to €32.38 at 11.12 am in Frankfurt, partly reversing three days of losses and valuing the firm at €30.1 billion.

The Stoxx 600 Banks Index rose 0.7 per cent as European policy makers weighed options for keeping Cyprus in the euro area.

The company also said it reduced contingent liabilities for "significant" legal and regulatory matters by about €500 million to €1.5 billion as some of them related to claims that were previously disclosed.

European investment banks probably face a total of $11 billion in US mortgage-related litigation costs, analysts at Credit Suisse Group AG including Amit Goel said in an e-mailed report from London today.

UBS AG, Switzerland's biggest bank, faces the largest sum of $3.5 billion and Deutsche Bank $2.1 billion, they said.

The larger provisions reduced Deutsche Bank's Tier 1 capital ratio, a measure of financial strength under full Basel III rules, to 7.8 per cent at the end of 2012 from the 8 per cent it had published in January.

The firm kept an 8.5 percent target for the end of March and still plans to pay a dividend of 75 cents a share for 2012, according to the statement.

Bloomberg

The Untouchables

Watch The Untouchables on PBS. See more from FRONTLINE.

Watch The Untouchables on PBS. See more from FRONTLINE.

Watch The Untouchables on PBS. See more from FRONTLINE.

Watch The Untouchables on PBS. See more from FRONTLINE.

Texas wants to take Physical possession of their gold from NY Fed. $1 Billion worth

Texas has a bill in their house to take physical possession of the state of Texas owned gold from the NY Fed.

In 2011 The University of Texas purchased $1 Billion worth of gold with the help of an asset manager.  At that time it was said "To want physical gold and not paper certificates was a form of anarchy."

From above link about purchase of gold:

“If you own a paper contract where they can only deliver you 10 cents on the dollar or less, you should probably convert it to physical,” said Bass, who isn’t related to Fort Worth’s billionaire Bass family. He said holding cash wasn’t a better choice because the rate of inflation exceeds money-market rates by 2.5 percent to 3 percent, eroding the value of cash.
“The call to take delivery is more of a challenge to the system and it borders on the anarchistic,” said Ralph Preston, a principal at Heritage West Financial Inc., a San Diego company that specializes in futures trading. “It’s like the Republicans trying to overturn President Obama over the birth certificate issue. It’s poor sportsmanship.”

They left the gold at the NY Fed.  Now they want the physical gold in Texas.

Portions:

Call it the Rick Perry gold rush: The governor wants to bring the state’s gold reserves back from a New York vault to Texas.

And he may have legislative support to do it. Freshman Rep. Giovanni Capriglione, R-Southlake, is carrying a bill that would establish the Texas Bullion Depository, a secure state-based bank to house $1 billion worth of gold bars owned by the University of Texas Investment Management Company, or UTIMCO, and currently stored by the Federal Reserve.
“For us to have our own gold, a lot of the runs on the bank and those types of things, they happen because people are worried that there’s nothing there to back it up,” Capriglione said. “So I think this cures a problem before it can happen.”Physically transporting gold that various state entities own from New York City or other banks to Texas would be impractical from a security and logistics standpoint, Capriglione said. He believes it makes more sense to sell the gold Texas has elsewhere and repurchase it within state lines.

We can take a guess on whose side Capriglione is on and who he works for.  He wants to sell it and then repurchase it?  

How many individual states own physical gold?  Besides countries want to repatriate their gold, the individual states of the United States need to get their physical gold in their state.   

Will Texas get their gold?  I can only imagine there are many threatening phone calls going on right now about this issue.  The threats may stop Texas from repatriating their gold, since we know the gold  is not there.   How many thousands of tons of gold is suppose to be at the NY Fed for states and other countries?   

Do I believe Texas will get their physical gold?  No, I don't.  They will be threatened with their lives for daring to ask for what is rightfully theirs and what they paid for.   With the Fed, you can give them your money, but don't dare ask for it back.  They are the biggest ponzi scheme in the world.  They will sell you something they don't have multiple times.  

It is time for the States to begin standing up to the Ponzi scheme of the Federal Reserve and Wall  Street.   It is time for the States to use their Supremacy Clauses to the unconstitutional Federal Laws.   It is time for the people to stand up and Call for Freedom!