Babe magnet wolf t-shirt a net sensation
Michael Krinsky, left, howls as partner Jeff Grosner laughs in the production area of their t-shirt company.
May 29, 2009 – 10:04AM
Until recently, it was just a t-shirt with a colourful design of three wolves howling at the moon.
Now, it’s a viral sensation with its own Facebook page, videos and an exploding following that has swamped a tiny New Hampshire company. All because a customer posted a tongue-in-cheek comment on Amazon.com saying the “Three Wolf Moon” helped make him a babe magnet.
While images of the shirt and comments about its powers sweep the internet, employees at The Mountain in Keene are caught up in a storm, and working overtime to make the best of it.
“We’re laughing a lot more than we used to,” owner Michael Krinsky said.
The T-shirt, designed by Florida artist Antonia Neshev, has taken over the production line in the basement of a 200-year-old mill building, though it took a while for the rumbling to reach The Mountain.
Rutgers University law student Brian Govern posted his comment last fall, saying, among other things: “Fits my girthy frame, has wolves on it, attracts women.”
Thousands responded to his comment, adding to the shirt’s alleged powers.
“We didn’t pick up on it,” Krinsky said. “We didn’t know anything was happening, and all of a sudden we were told, ‘Hey, come on. This shirt is selling like crazy. Then we were told it was the No. 1 apparel item on Amazon, and then we realized what was going on and it kept on going from there.”
He said they now are selling thousands a day.
At Amazon.com, spokeswoman Stephanie Robinett said the shirt, seriously, has been No. 1 since May 19, but not-so-seriously, “We can’t confirm that the shirt is actually magical or has powers.”
The customer comments have given the shirt a life of its own.
“Unfortunately,” one customer posted, “I already had this exact picture tattooed on my chest, but this shirt is very useful in colder weather.”
One “disappointed” customer wrote that after wearing his T-shirt for several weeks, he was beginning to believe some of the benefits were exaggerated.
“For example, not ONE supermodel has approached me,” he wrote.
The company responded that it does not guarantee wearers will become “a magnet for supermodels.”
The company also has posted an account of how the shirts are delivered to them “saddled to the backs of Pegacorns (unicorn-Pegasus hybrids),” hand-dyed by monks, dragged through the ocean by eagles and dropped back in New Hampshire.
“By wearing 3WM, you agree that your life may change in ways that could be the greatest of gifts or the worst of curses,” The Mountain says. “By wearing 3WM you give up all rights to a normal life.”
Three Wolf Moon T-Shirt, Available in Various Sizes ~ The Mountain
The Practical Implications of the WHTI
May 28, 2009
By Scott Stewart and Fred Burton
On June 1, 2009, the land and sea portion of the Western Hemisphere Travel Initiative (WHTI) will go into effect. The WHTI is a program launched as a result of the Intelligence Reform and Terrorism Prevention Act of 2004 and intended to standardize the documents required to enter the United States. The stated goal of WHTI is to facilitate entry for U.S. citizens and legitimate foreign visitors while reducing the possibility of people entering the country using fraudulent documents.
Prior to the WHTI, American travelers to Mexico, Canada and several countries in the Caribbean needed only a driver’s license and birth certificate to re-enter the United States, while American travelers to other regions of the world required U.S. passports to return. This meant that immigration officials had to examine driver’s licenses and birth certificates from every state, and since the driver’s licenses and birth certificates of all the states change over time, there were literally hundreds of different types of documents that could be used by travelers at points of entry. In practical terms, this meant there was no way immigration officers could be familiar with the security features of each identification document, thereby making it easier for foreigners to use counterfeit or fraudulently altered documents to enter the country by claiming to be returning U.S. citizens.
The air portion of the WHTI went into effect in January 2007 and required that all international air travelers use passports to enter the United States. However, the land and sea implementation of WHTI will be a little different from the air portion. In addition to passports, travelers can also use U.S. passport cards (a driver’s license-sized identification document), an enhanced driver’s license (which are currently being issued by Michigan, New York, Vermont and Washington) or “special trusted” traveler identification cards such as Nexus and Sentri to enter the country by land or sea.
The WHTI will greatly simplify the number of travel documents that immigration officials have to scrutinize. It will also mean that the documents needed to enter the United States will be far harder to counterfeit, alter or obtain by fraud than the documents previously required for entry. This will make it more difficult for criminals, illegal aliens and militants to enter the United States, but it will by no means make it impossible.
An Evolutionary Process
Identity document fraud has existed for as long as identity documents have. Like much sophisticated crime, document fraud has been an evolutionary process. Advancements in document security have been followed by advancements in fraud techniques, which in turn have forced governments to continue to advance their security efforts. In recent years, the advent of color copiers, powerful desktop computers with sophisticated graphics programs and laser printers has propelled this document-fraud arms race into overdrive.
In addition to sophisticated physical security features such as ultraviolet markings and holograms, perhaps the most significant security features of newer identification documents such as passports and visas are that they are machine-readable and linked to a database that can be cross-checked when the document is swiped through a reader at a point of entry. Since 2007, U.S. passports have also incorporated small contactless integrated circuits embedded in the back cover to securely store the information contained on the passport’s photo page. These added security measures have limited the utility of completely counterfeit U.S. passports, which (for the most part) cannot be used to pass through a point of entry equipped with a reader connected to the central database. Such documents are used mostly for traveling abroad rather than for entering the United States.
Likewise, advancements in security features have also made it far more difficult to alter genuine documents by doing things like changing the photo affixed to it (referred to as a photo substitution or “photo sub”). Certainly, there are some very high-end document forgers who can still accomplish this — such as those employed by intelligence agencies — but such operations are very difficult and the documents produced are very expensive.
One of the benefits of the WHTI is that it will now force those wishing to obtain genuine documents by fraud to travel to a higher level — it has, in effect, upped the ante. As STRATFOR has long noted, driver’s licenses pose serious national security vulnerability. Driver’s licenses are, in fact, the closet thing to a U.S. national identity card. However, driver’s licenses are issued by each state, and the process of getting one differs greatly from state to state. Criminals clearly have figured out how to work the system to get fraudulent driver’s licenses. Some states make it easier to get licenses than others and people looking for fraudulent identification flock to those states. Within the states, there are also some department of motor vehicles (DMV) offices — and specific workers — known to be more lenient, and those seeking fraudulent licenses will intentionally visit those offices. In addition to corrupt DMV employees and states that issue driver’s licenses to illegal immigrants, an illegal industry has arisen devoted entirely to producing counterfeit identification documents, compounding the problem.
Birth certificates are also relatively easy to obtain illegally. The relative ease of fraudulently obtaining birth certificates as well as driver’s licenses is seen in federal document-fraud cases (both documents are required to apply for a U.S. passport). In a large majority of the passport-fraud cases worked by Diplomatic Security Service (DSS) special agents, the suspects have successfully obtained fraudulent driver’s licenses and birth certificates, which are submitted in support of a passport application. It is not uncommon for DSS special agents to arrest suspects who possess multiple driver’s licenses in different identities from the same state or even from different states. Such documents could have been used to travel across the U.S. border via land prior to the implementation of the WHTI.
For those able to afford the fees of high-end alien smugglers, who can charge up to $30,000 for a package of identification documents that contains a genuine U.S. passport with genuine supporting documents (birth certificate, social security card and driver’s license), or $10,000 to $15,000 for a genuine U.S. visa (tied to a database, the newer machine-readable visas are very difficult to counterfeit), the WHTI will not make much difference. These high-end document vendors obtain legitimate identification documents by paying corrupt officials who have been carefully cultivated.
That said, the WHTI should succeed in causing the vast majority of criminal aliens, illegal economic immigrants and even militants — people who have not traditionally patronized high-end document vendors — to change the way they enter the United States. Of course, perhaps the simplest way is to take the low road. That is, get to Canada or Mexico and then simply sneak across the border as an undocumented alien — something that hundreds of thousands of people do every year. Once inside the country, such aliens can link up with lower-level document vendors to obtain the driver’s licenses, social security cards and other identity documents they need in order to live, work and travel around the country.
But there are other ways that the WHTI measures can be circumvented. For example, the crush of passport applications the WHTI is now causing will create a distinct vulnerability in the short term. Although the U.S. Department of State has hired a large number of new examiners to process the flood of passport applications it is receiving (and also a number of new DSS special agents to investigate fraud cases), the system is currently overwhelmed by the volume of passport applications.
Historically, passport examiners have had their performance evaluations based on the number of passport applications they process rather than on the number of fraudulent applications they catch (which has long been a source of friction between the DSS and the Bureau of Consular Affairs). This emphasis on numerical quotas has been documented in U.S. Government Accountability Office reports that have noted that the quotas essentially force examiners to take shortcuts in their fraud-detection efforts. As a result, many genuine passports have been issued to people who did not have a legitimate right to them. The current overwhelming flood of passport applications as a result of WHTI, when combined with a batch of new examiners who are rated on numerical quotas, will further enhance this vulnerability. Unless a passport application has an obvious fraud indicator, it will likely slip through the cracks and a fraudulent applicant will receive a genuine U.S. passport.
Stolen passports are another area to consider. In addition to being photo-subbed, which has become more difficult, stolen passports can also be used as travel documents by people who resemble the owner of the document. All the holograms, microprinting and other security features that have been placed on the laminates of passport photo pages tend to make it difficult to clearly see the photo of the passport holder. Also, people change over time, so a person who was issued a passport eight years ago can look substantially different from their passport photo today. The passport process and the laminate can also make it especially difficult to see the facial features of dark-skinned people. This means it is not at all uncommon for a person to be able to impersonate someone and use his or her passport without altering it. This problem persists, even with digital photos being included with the information embedded electronically in the memory chips of newer electronic passports.
Because of these possibilities, stolen passports are worth a tidy sum on the black market. Indeed, shortly after U.S. passports with green covers were issued, they were found to be extremely easy to photo-sub and were soon fetching $7,000 apiece on the black market in places like Jamaica and Haiti. In fact, criminal gangs quickly began offering tourists cash or drugs in exchange for the documents, and the criminal gangs would then turn around and sell them for a profit to document vendors. The problem of U.S. citizens selling their passports also persists today.
On the flip side, many Americans are unaware of the monetary value of their passport — which is several times the $100 they paid to have it issued. They do not realize that when they carry their passport it is like toting around a wad of $100 bills. Tour guides who collect the passports of all the people in their tour group and then keep them in a bag or backpack can end up carrying around tens of thousands of dollars in identification documents — which would make a really nice haul for a petty criminal in the Third World.
But U.S. passports are not the only ones at risk of being stolen. The changes in travel documents required to enter the United States will also place a premium on passports from countries that are included in the U.S. “visa waiver” program — that is, those countries whose citizens can travel to and remain in the United States for up to 90 days without a visa. There are currently 35 countries in the visa waiver program, including EU member states, Australia, Japan and a few others. The risk of theft is especially acute for those countries on the visa waiver list that issue passports that are easier to photo-sub than a U.S. passport. In some visa waiver countries, it is also cheaper and easier to obtain a genuine passport from a corrupt government official than it is in the United States.
While there are efforts currently under way to create an international database to rapidly share data about lost and stolen blank and issued passports, there is generally a time lag before lost and stolen foreign passports are entered into U.S. lookout systems. This lag provides ample time for someone to enter the United States on a photo-subbed passport, and it is not clear if retroactive searches are made once the United States is notified of a stolen passport in order to determine if that passport was used to enter the United States during the lag period. Of course, once a person is inside the United States, it is fairly easy to obtain identification documents in another identity and simply disappear.
There have also been cases of jihadist groups using the passports of militants from visa waiver countries who have died in order to move other operatives into the United States. On Sept. 1, 1992, Ahmed Ajaj and Abdul Basit (also known as Ramzi Yousef) arrived at New York’s Kennedy Airport. The two men had boarded a flight in Karachi, Pakistan, using photo-subbed passports that had been acquired from deceased jihadists. Ajaj used a Swedish passport in the name Khurram Khan and Basit used a British passport in the name Mohamed Azan.
Ultimately, the WHTI will help close some significant loopholes — especially regarding the use of fraud-prone driver’s licenses and birth certificates for international travel — but the program will not end all document fraud. Document vendors will continue to shift and adjust their efforts to adapt to the WHTI and exploit other vulnerabilities in the system.
This report may be forwarded or republished on your website with attribution to www.stratfor.com
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GM and Unemployment
PM Thursday, May 28, 2009
AP reports that according to government data released today “the number of people continuing to receive unemployment benefits rose to 6.78 million — the largest total on records dating back to 1967 and the 17th straight record week.”
FRANK HAMMER, firstname.lastname@example.org
Hammer is a retired GM employee of 32 years. He was president of United Auto Workers local 909 and also worked in the GM department of the UAW.
He said today: “We have to look at multiple crises, including the economy and global warming. James Hansen of NASA has warned that we are near irreversible harm on global warming. Now, that’s pretty alarming. But we’re not acting with the seriousness that would mean.
“We must engage in a conversion so that what we manufacture makes sense environmentally, including public transportation, like trains, and renewable energy, like wind turbines. We need to put people to work creating things that will work to prevent environmental disaster.
“There was a similar civilian to military conversion in the auto pants during World War II — and the companies resisted that too while the UAW pushed for it. And they were able to convert in eight months. We need another conversion for another kind of war now. GM has been a dinosaur and is not able to lead the conversion to produce the things we need.”
From: Institute for Public Accuracy
EIA, the Nation’s clearinghouse for energy statistics – World Energy Use Projected to Grow 44 Percent Between 2006 and 2030
Wednesday, May 27, 2009
Energy Information Administration
Washington, DC 20585
FOR IMMEDIATE RELEASE
MAY 27, 2009
World Energy Use Projected to Grow 44 Percent Between 2006 and 2030
World marketed energy consumption is projected to grow by 44 percent between 2006 and 2030, driven by strong long-term economic growth in the developing nations of the world, according to the reference case projection from the “International Energy Outlook 2009″ (IEO2009) released today by the Energy Information Administration (EIA).
The current global economic downturn will dampen world energy demand in the near term, as manufacturing and consumer demand for goods and services slows. However, with economic recovery anticipated to begin within the next 12 to 24 months, most nations are expected to see energy consumption growth at rates anticipated prior to the recession. Total world energy use rises from 472 quadrillion British thermal units (Btu) in 2006 to 552 quadrillion Btu in 2015 and then to 678 quadrillion Btu in 2030.
World oil prices have fallen sharply from their July 2008 high mark.
As the world’s economies recover, higher world oil prices are assumed to return and to persist through 2030. In the IEO2009 reference case, world oil prices rise to $110 per barrel in 2015
(in real 2007 dollars) and $130 per barrel in 2030. Total liquid fuels and other petroleum consumption in 2030 is projected to be 22 million barrels per day higher than the 2006 level of 85 million barrels per day. In the reference case, conventional oil supplies from the Organization of the Petroleum Exporting Countries (OPEC)contribute 8.2 million barrels per day to the total increase in world liquid fuels production, and conventional supplies from non-OPEC countries add another 3.4 million barrels per day.
In addition, unconventional resources (including biofuels, oil sands, extra-heavy oil, coal-to-liquids, and gas-to-liquids) from both non-OPEC and OPEC sources are expected to become increasingly
competitive in the reference case. World production of unconventional resources, which totaled 3.1 million barrels per day in 2006, increases to 13.4 million barrels per day in 2030 in the reference case, accounting for 13 percent of total world liquids supply in 2030.
Recent experience demonstrates that world oil prices can be extremely volatile and, as a result, the IEO2009 includes three world oil price cases that span a very broad range in 2030, from $50 (in 2007 dollars) per barrel in the low price case to $200 per barrel in the high price case. These price paths translate to a fairly broad range of potential supply outlooks in 2030, ranging from 90 million barrels per day in the high price case to 120 million barrels per day in the low price case (compared to 107 million barrels per day in the reference case)
Other report highlights include:
* The rapid increase in world energy prices from 2003 to 2008, combined with concerns about the environmental consequences of greenhouse gas emissions, has led to renewed interest in the
development of alternatives to fossil fuels. Renewable energy is the fastest-growing source of world electricity generation in the IEO2009 reference case, supported by high prices for fossil fuels and by government incentives for the development of alternative energy sources. From 2006 to 2030, world renewable energy use for electricity generation grows by an average of 2.9 percent per year (Figure 1), and the renewable share of world electricity generation increases from 19 percent in 2006 to 21 percent in 2030. Hydropower and wind power are the major sources of incremental renewable electricity supply.
* Worldwide, industrial energy consumption is expected to grow from 175 quadrillion Btu in 2006 to 246 quadrillion Btu in 2030.
Industrial energy demand varies across regions and countries of the world, based on levels and mixes of economic activity and technological development, among other factors. About 94 percent of the world increase in industrial sector energy consumption is projected to occur in the emerging economies, where-driven by rapid economic growth-industrial energy consumption grows at an average annual rate of 2.1 percent in the reference case. The key engines of growth in the projection are the so-called “BRIC” countries (Brazil, Russia, India, and China), which account for more than two-thirds of the developing world’s growth in industrial energy use through 2030.
* In the IEO2009 reference case, which does not include specific policies to limit greenhouse gas emissions, energy-related carbon dioxide emissions are projected to rise from 29.1 billion metric tons in 2005 to 40.4 billion metric tons in 2030-an increase of 39 percent. With strong economic growth and continued heavy reliance on fossil fuels expected, much of the increase in carbon dioxide emissions is projected to occur among the developing nations of the world, especially in Asia (Figure 2).
The full report can be found on EIA’s web site at:
EIA, the Nation’s clearinghouse for energy statistics – Petroleum Supply Monthly
Thursday, May 28, 2009
Petroleum Supply Monthly
The May Petroleum Supply Monthly with March data has been updated to the EIA website on Thursday, May 28, 2009.
Petroleum Supply Monthly website:
EIA, the Nation’s clearinghouse for energy statistics – This Week in Petroleum (TWIP)
Thursday, May 28, 2009
This Week in Petroleum (TWIP) has been updated to the EIA website:
BusinessWeek Viewpoint May 26, 2009 – The Ethanol Lobby: Profits vs. Food
If the ethanol lobby really believes in the biofuel, why are there so few E85 pumps in corn-growing states?
By Ed Wallace
If you had two customers for the same product and one paid more than the other, which customer would you choose? That’s the situation in which ethanol producers in the U.S. find themselves. They could grow corn and other crops for food and get one price, or produce the same crops for biofuel and get a higher price and tax credits. The problem is that by focusing on more profitable biofuels, farmers not only deplete the food supply, they are also producing an alternative fuel whose usefulness is still hotly debated.
Last year 17 billion gallons of biofuels were created and used worldwide. The previous year 100 million tons of grain had been turned into biofuels. According to Ronald Bailey at Reason magazine, enough food was turned into fuel for our vehicles in 2007 to feed 450 million people for a year.
On Apr. 10 this year the Congressional Budget Office published a report saying that “Higher use of the corn-based fuel additive accounted for about 10% to 15% of the rise in food prices between April 2007 and April 2008.” That’s just for one year.
Ethanol use has much more impact on prices of foods directly connected to corn, whether it be Kellogg’s Corn Flakes or beef from the butcher’s department at your local grocery store. An especially alarming CBO statistic shows another hidden cost of ethanol: Increased food prices could cost Americans $900 million more for food stamps and nutritional programs for children.
Growing crops for fuel also carries a serious environmental cost. Last month the International Council for Science released a new study, which in turn validated work from 2007 by Paul Crutzen at Germany’s Max Planck Institute for Chemistry. These studies show that the amount of nitrous oxide released as a result of farming corn or rape for biofuels had been underestimated by a factor of 3 to 5 times. Nitrous oxide is a greenhouse gas 300 times more potent than carbon dioxide. That inconvenient truth negates any savings from so-called carbon neutral fuels.
Save the Rainforests: Avoid Ethanol!
But let’s look at the claim that using biofuels lowers overall carbon dioxide emissions. Essentially it isn’t true.
Take Brazil. The region around São Paulo is their main ethanol production center. It was once a major center for cattle ranching, but the ranchers have often been supplanted by sugar cane plantations, whose proximity to the city make them efficient producers of ethanol for the urban market. Cattle and other agriculture have been pushed farther west, requiring that large patches of the Amazon rainforest be cleared. Yes, the world’s greatest natural carbon dioxide trap, the Amazon rainforest, is being cut down so the world can have all the ethanol it thinks it needs.But ethanol isn’t the No.1 fuel in Brazil either: It’s diesel.
According to a Time magazine article from March 2008, not only does deforestation create 20% of the world’s current carbon emissions, but in the second half of 2007 alone an area the size of Rhode Island was cleared from the Amazon forest. That year a study in Science magazine stated that when you take deforestation into account, ethanol and biodiesel produce twice as much carbon dioxide emissions as regular gasoline.
The Time article also covered the 2003 study at the University of Minnesota, which found that the increased use of biofuels would double the amount of hunger in the world by 2025, to 1.2 billion people.
Killing the Gulf’s Wildlife
The damage doesn’t stop there. A 2008 study by Simon Donner of the University of British Columbia and Chris Kucharik of the University of Wisconsin-Madison shows that the increased use of fertilizers required by additional corn production due to ethanol will widely increase the dead zone in the Gulf of Mexico. That is because the runoff from farms throughout the Midwest feeds into the Mississippi’s tributaries to the Gulf.
Corn growing and ethanol production also raise issues about water use. Recently the University of Minnesota concluded that the amount of water needed to grow corn for ethanol varied widely, from 1.3 to 565 gallons per gallon of ethanol made—in Western states such as Nebraska, Colorado and California corn crops must be irrigated. In Mercer County, Ohio, residents banded together to stop a $125 million, 50-million-gallon ethanol refinery from being built after they found out that the proposed refinery was going to dump 300 million gallons of wastewater a year into nearby Grand Lake St. Marys.
It is a combination of these issues that keep biofuels from being widely touted by serious environmental groups. It’s referred to as green energy only by those selling ethanol to Congress, which in turn forces it on the public by mandate.
Lead by Example
The real problem with ethanol is that in spite of the full court press and misinformation campaign put out by the various lobbying groups that insist this is the cure all to our energy problems, the fact is they don’t really believe in the product themselves. Take Indiana, for instance. Indiana is the fifth-largest grower of corn for the nation, according to recent government figures, yet E85.org states that they only have 124 pumps selling E85 ethanol in the entire state. It gets worse.
On Mar. 10 of this year the Indiana Economic Digest published an article, “E85 Sales Fizzle in Wake of Low Gasoline Prices.” Phillip Lampert, director of the National Ethanol Vehicle Coalition, was quoted in that article: “Sales of E85 are down across the country.” Bummer. Nobody wants to buy E85. Of course, Indiana can’t hold a candle to Nebraska, whose corn production is almost 50% higher. Nebraska, whose slogan is “Possibilities…Endless” apparently doesn’t feel that way about the state’s residents using E85 ethanol. To this day only 58 pumps in the entire state of Nebraska pump E85. These groups sincerely believe in the future for ethanol—as long as it’s someone else forced to buy it.
Still, in spite of all the downsides to biofuels, there is a way to make ethanol work, reduce America’s dependence on oil, and help mitigate the gasoline shortfall that could well come our way by 2015: Simply sell the fuel where it’s made.
Ethanol can’t be put into gasoline pipelines and shipped across the country because of its propensity to attract moisture, so it has to be sent by truck, train, or barge. So don’t ship it anywhere: Think of the incredible energy savings we would achieve by not shipping ethanol all over the country. No diesel needed for any long-distance travel, no energy wasted by local distributors to add it into real gasoline for everyone’s use.
Instead, alter the government mandate so that all ethanol has to be sold as an E85 blend within 75-100 miles of the refinery that made it. The upside to this plan is that it would free up gasoline for the rest of the nation, and save more by reducing the energy needed to transport as much oil and gas to the Midwest. This energy-efficient plan would likely save most of America a few cents per gallon on gas.
The car companies could simply sell their E85 Flex-Fuel vehicles in nearby counties in which ethanol refineries exist. The brilliance of the plan lies in its simplicity and obvious energy savings for the nation by keeping ethanol in regions in which it’s produced. It’s the obvious answer. The people who tell us ethanol is wonderful would become the people who have to use ethanol. What could be fairer?
The “Truthiness” Test
If one seriously believes that ethanol is the answer to our oil problems, our other option is to get into the ethanol business in a big way. Or to engage in real free trade. That means we must immediately drop the 51-¢-per-gallon blending credit for ethanol creation in America and drop the 54-¢-per-gallon tariff on imported Brazilian ethanol. This would allow much cheaper and more energy-efficient sugar cane ethanol to be sold in gasoline at least in coastal cities, again saving the energy needed to ship ethanol across the country.
Here are two great ways to enhance our energy security with ethanol. Neither one will change the environmental impact of using this fuel, nor will either reduce the costs of certain foodstuffs. But if the ethanol lobby puts their full lobbying pressure behind these plans, then we will know they sincerely believe in their product.
If they resist selling ethanol only where it’s refined, or block the cessation of blending credits and won’t budge on import tariffs, then we’ll know they don’t really believe in ethanol—they’re only in it for the money.
Wonder which way they will go?
Ed Wallace received the Gerald R. Loeb Award for business journalism, given by the Anderson School of Business at UCLA, and is a member of the American Historical Society. He reviews new cars every Friday morning at 7:15 on Fox Four’s Good Day, contributes to BusinessWeek.com with some regularity and hosts the top-rated talk show Wheels, 8:00 to 1:00 Saturdays on 570 KLIF.
Visit his highly respected Web site, www.insideautomotive.com, to read all his work.
Another Argument Against Ethanol
By Chuck Squatriglia
May 26, 2009
The ethanol industry is pushing the Environmental Protection Agency to increase from 10 percent to 15 percent the amount of ethanol that is blended into gasoline, saying it will boost demand, create jobs and foster development of cellulosic fuels.
BusinessWeek argues otherwise in a column by Ed Wallace, who calls ethanol a scam that should be abandoned. He argues the ethanol industry is “quickly failing” and says, “Don’t let anybody mislead you: The new push to get a 15 percent ethanol mandate out of Washington is simply to restore profitability to a failed industry.”
The Renewable Fuels Association has said the success of corn-based ethanol will hasten the development of cellulosic ethanol. “In order to have a second generation of ethanol fuel,” it argues, “you have to have a first-generation.” Wallace flatly accuses the ethanol industry of lying to make its case and lays out a laundry list of reasons why ethanol is a dead-end that Washington must stop traveling.
The industry says Wallace is wrong on every count and offers a point-by-point rebuttal.
Wallace offers the following reasons why ethanol isn’t worth pursuing:
•Using ethanol creates more smog than regular gasoline, a point he says the EPA conceded in 1995.
•Independent studies show ethanol is a net energy loser, though some research suggests there is a small gain.
•Fuels blended with ethanol reduce fuel efficiency 30 to 40 percent.
•Aside from the food-for-fuel debate, “the science seems to suggest that using ethanol increases global warming emissions over the use of straight gasoline.”
•Ethanol-laced gasoline “is already destroying engines across the country in ever larger numbers.”
Wallace, who also is a columnist for the Fort Worth Star-Telegram, spoke to several mechanics in suburban Fort Worth who said they’re seeing more cars with fuel pumps, intakes and other components damaged by ethanol-blended gasoline.
“Not one mechanic I’ve spoken to said they would be comfortable with a 15 percent blend of ethanol in their personal car,” he writes. “However, most suggest that if the government moves the ethanol mandate to 15 percent, it will be the dawn of a new golden age for auto mechanics’ income.”
Growth Energy, an ethanol industry trade group, takes issue with every point.
“In his column, Mr. Wallace fails in his journalistic duty to provide readers with the facts,” the organization writes. “He relies on anecdotal evidence in support of his erroneous claims while completely ignoring the large body of scientific literature that supports the use of higher blends of ethanol in vehicles.”
It offers the following rebuttal:
•Evidence suggests increased use of ethanol brought a 5 percent decrease in ground-level ozone between 2001 and 2007.
•Every gallon of ethanol produced delivers one-third or more energy than is used to produce it.
•“Study after study” has shown ethanol has minimal impact on food prices, and rising food prices are the result of rising energy costs. As for the issue of global warming emissions, Growth Energy says a study in the Journal of Industrial Ecology states “the ethanol industry currently is producing a fuel that is as much as 59 percent lower in direct-effect lifecycle greenhouse gas emissions than gasoline.”
•The push to increase the amount of ethanol blended with gasoline is needed because the industry is producing more ethanol than can be used under current government regulations. The current limit is “arbitrary” and “threatnes to block research and development into cellulosic and future generations of biofuels.”
You can read Wallace’s column here and Growth Energy’s full rebuttal here. The EPA has extended the public comment period for the proposal to increase the amount of ethanol blended with gasoline. More information about that is available here.
POST UPDATED 1 p.m. Eastern time May 27: Ed Wallace dropped us a line to say he stands by his column and takes issue with some of Growth Energy’s points. He says the 5 percent reduction in smog can be attributed to the replacement of old vehicles with newer, cleaner models. About 5 percent of the nation’s fleet is turned over annually, he says. He also says a Congressional Budget Office report released last month shows ethanol production increased the price of food by 10 to 15 percent. He’s written a follow-up column; you can find it here.
POST UPDATED 1:15 p.m. Eastern time May 27: The Environmental Working Group, a health and environmental research and policy organization, just sent us an email challenging Growth Energy’s claims. In a letter to EPA Administrator Lisa Jackson, the organization makes many of the same claims Wallace does and says Growth Energy makes “numerous fundamental errors of fact and interpretation, both in its arguments advocating for ethanol increases and in its supporting data.”
You can read the letter here.
Complete article at:
The Finance-Government Complex & The End of U.S. Economic Dominance
PMay 26, 2009
Banks remain in the ICU (intensive care unit). Even after around $900 billion in new capital, the global banking system remains short of capital by around $1-2 trillion. This translates into an effective reduction in available credit of around 20-30% from previous levels.
Recent excitement about the “stress tests” of U.S. banks misses an essential point. At best if you accept the premises of the test, the risk of failure of these institutions is much reduced. But the banks’ ability to support lending levels that prevailed in say 2007 has not been restored. In short, the “credit crunch” or shortage of borrowing will continue for a prolonged period.
The financial system will need continued government support for some time to come. The performance of governments trying to rehabilitate the financial system has been problematic. Increasingly, government officials have become focused on “reassuring” the public and maintaining “confidence”. The “political spin” has dominated substance. Many government proposals are “stillborn”; for example, progress on the famed Public Private Investment Partnership (“PPIP”) has been painfully slow.
In April 2009, Elizabeth Warren, Chairperson of the TARP Oversight Panel Report questioned the very approach to resolving the problems of the financial system: “Six months into the existence of TARP, evidence of success or failure is mixed. One key assumption that underlies Treasury’s [PPIP] approach is its belief that the system-wide deleveraging resulting from the decline in asset values, leading to an accompanying drop in net wealth across the country, is in large part the product of temporary liquidity constraints resulting from non-functioning markets for troubled assets. On the other hand, it is possible that Treasury’s approach fails to acknowledge the depth of the current downturn and the degree to which the low valuation of troubled assets accurately reflects their worth.”
Richard Neiman (New York State Superintendent of Banks) and John Sununu (former New Hampshire Senator), two other panel members, issued dissenting findings noting: “We are concerned that the prominence of alternate approaches presented in the report, particularly reorganization through nationalization, could incorrectly imply both that the banking system is insolvent and that the new administration does not have a workable plan.” Many would question the selection of the words “incorrectly imply”.
Constant changes do not suggest a consistent and well thought out strategy in dealing with the problems. Less than rigorous stress tests, using taxpayers monies in different guises provide lopsided subsidies for private investors to buy distressed assets with minimal risk or converting preferred stock into shares to avoid having to seek additional congressional mandates suggest a highly politicised and ideological approach. One online commentator noted the intersection between Wall Street, Constitution Avenue and Main Street was best named: “Confusion Corner”.
Suggestions of political influence and a palpable lack of transparency are emerging. There are allegations that the Henry Paulson, the previous U.S. Treasury Secretary, may have “pushed” Bank of America to consummate its controversial acquisition of Merrill Lynch when it sought to withdraw after additional losses came to light. Certainly, the purchase of Merrill Lynch does not fit comfortably with Ken Lewis’ (Bank of America’s Chairman) earlier statement that “he had just about as much fun in investment banking as he could take”.
The Treasury secretary is alleged to have suggested that Bank of America’s management and board could be removed if it did not proceed. There are also suggestions that both the Treasury and Bank of America decided to avoid public disclosure of these events.
The appointment of Timothy Giethner and Larry Summers initially was viewed favourably. The feeling was that “they knew where the bodies were buried”. Critics pointed out that this was because they may have put them there! The “closeness” between banks and government officials and regulators that is being exposed daily is increasingly part of the problem in dealing with the real issues.
Mancur Olson, the American economist, in his books (The Logic of Collective Action and The Rise and Decline of Nations), speculated that small distributional coalitions tend to form over time in developed nations and influence policies in their favor through intensive, well funded lobbying. The policies result in benefits for the coalitions and its members but large costs borne by the rest of population. Over time, the incentive structure means that more distributional coalitions accumulate burdening and ultimately paralysing the economic system causing inevitable and irretrievable economic decline.
Government attempts to deal with the problems of the financial system, especially in the U.S.A., Great Britain and other countries, may illustrate Olson’s thesis. Active well funded lobbying efforts and “regulatory capture” is impeding necessary actions to make needed changes in the financial system. For example, the Centre of Public Integrity reported that the expenditure on lobbying and political contribution of the top 25 sub-prime mortgage originators, most linked to large U.S. banks, was around $380 million (the Economist (9 May 2009).
Larry Summers, an uncompromising advocate of deregulation and liberalization blamed the Asian crisis, in part, on “crony capitalism”. Increasingly, government actions to rescue and re-regulate the financial system display many of the characteristics of the policies that Summers once criticised.
The phrase – “military industrial complex” – described the complex inter-relationships and influences that shaped America in the post-war era. The “finance government complex” (dubbed “Government Sachs” by its critics) replaced the original arrangement in the late twentieth century and may well prove to be the undoing of American economic dominance.
Satyajit Das is a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives (2006, FT-Prentice Hall).
Traders, Guns & Money: Knowns and unknowns in the dazzling world of derivatives ~ Satyajit Das
The Logic of Collective Action: Public Goods and the Theory of Groups, Second printing with new preface and appendix (Harvard Economic Studies) ~ Mancur Olson
The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities ~ Mancur Olson
Florida’s BankUnited fails, will cost FDIC $4.9B
By MARCY GORDON
WASHINGTON (AP) – The federal seizure of struggling Florida thrift BankUnited FSB is expected to cost the Federal Deposit Insurance Corp. $4.9 billion, representing the second-largest hit to the FDIC’s insurance fund since the financial crisis began felling banks last year.
The costliest was last year’s seizure of California lender IndyMac Bank, on which the bank insurance fund is estimated to have lost $10.7 billion.
The Office of Thrift Supervision, a Treasury Department agency, said Thursday that BankUnited FSB reported $1.2 billion in losses last year as defaults on loans piled up. The thrift “was critically undercapitalized and in an unsafe condition to conduct business,” the agency said in a statement.
Coral Gables, Fla.-based BankUnited FSB is the 34th federally insured institution to be closed this year, and the biggest. Florida’s largest banking institution with about $13 billion in assets as of May 2 was sold for $900 million to an investor group led by former North Fork Bancorp Chairman and CEO John Kanas. It will reopen as a newly chartered savings bank called BankUnited on Friday, with Kanas at the helm.
The investor group includes several prominent firms: the Blackstone Group, the Carlyle Group, Centerbridge Partners and WL Ross & Co., the private-equity firm run by billionaire investor Wilbur Ross.
Complete article at:
The Right’s supremely flawed opening argument against Sotomayor
President Obama could have nominated just about anyone to fill Justice David Souter’s seat on the Supreme Court, and the conservative movement would have reacted just as they have to his nomination of Judge Sonia Sotomayor.
Blown circuits: Rove levels attack on Sotomayor based on false claim that she and Alito were colleagues
Karl Rove claimed that he “got wind of” allegations that Sonia Sotomayor “was combative, opinionated, argumentative” while reviewing the record of her “colleague on the court” Samuel Alito. In fact, Sotomayor served on the 2nd U.S. Circuit Court of Appeals; Alito served on the 3rd Circuit.
Bill Maher –
“We’re $26 billion in the hole. I don’t want to say it’s bad, but today Mexico announced they’re building a border fence.”
three thousand words
Matt Davies: Hallowed Institution
Steve Benson: yip! yip! be afraid …