Axis of Evil: JP Morgan and Exxon

Credit Default Swaps are one of those clever little financial tools that the finance posse came up with to continue buy and selling things that don't exist. There were a major factor in the recent financial collapse that has cost hundreds of thousands of workers their jobs and homes. What's more they have a murky history: thye were invented by JP Morgan to help Exxon deal with the fall out of a major oil spill:

The Boca Raton meeting first bore fruit when Exxon needed to open a line of credit to cover potential damages of five billion dollars resulting from the 1989 Exxon Valdez oil spill. J. P. Morgan was reluctant to turn down Exxon, which was an old client, but the deal would tie up a lot of reserve cash to provide for the risk of the loans going bad. The so-called Basel rules, named for the town in Switzerland where they were formulated, required that the banks hold eight per cent of their capital in reserve against the risk of outstanding loans. That limited the amount of lending bankers could do, the amount of risk they could take on, and therefore the amount of profit they could make. But, if the risk of the loans could be sold, it logically followed that the loans were now risk-free; and, if that were the case, what would have been the reserve cash could now be freely loaned out. No need to suck up useful capital.

In late 1994, Blythe Masters, a member of the J. P. Morgan swaps team, pitched the idea of selling the credit risk to the European Bank of Reconstruction and Development. So, if Exxon defaulted, the E.B.R.D. would be on the hook for it—and, in return for taking on the risk, would receive a fee from J. P. Morgan. Exxon would get its credit line, and J. P. Morgan would get to honor its client relationship but also to keep its credit lines intact for sexier activities. The deal was so new that it didn’t even have a name: eventually, the one settled on was “credit-default swap."

You could not make it up...

BP Policing the Media

I blogged about Apple's police force. Next in the corporate cops rosta we have BP:

Emerging reports are raising the question of just how much of the Gulf of Mexico oil spill journalists are able to document.

When CBS tried to film a beach with heavy oil on the shore in South Pass, Louisiana, a boat of BP contractors, and two Coast Guard officers, told them to turn around, or be arrested.

"This is BP's rules, it's not ours," someone aboard the boat said. Coast Guard officials told CBS that they're looking into it.

As the Coast Guard is a branch of the Armed Forces, it brings into question how closely the government and BP are working together to keep details of the disaster in the dark.

Mre example of state-paid policing serving not the citizens, but a corporate agenda. If there was justice the cops would be busting in the doors of executives from the companies involved in this eco-clister-fuck...

Spining the Truth as Lies in Climate Change

There is a great, very analytical discussion and dissection of some of the claims of 'proof' of scientific fraud from the hacked climate change emails. What the denialist krew have been doing is quote mining - taking a small section of a quote out of context so it appears to say something it does not. Now I regularly remove bits of quotes, not to change the meaning but to focus on the important bits. When that editing changes the meaning of the original writer, you're in the realm of lies and propaganda. Here's an example. Take this quote:

But the current diagram with the tree ring only data somewhat contradicts the multiproxy curve and dilutes the message rather significantly. ... This is probably the most important issue to resolve in Chapter 2 at present.

So this sounds like the author to the email is concerned that the proxy data (tree rings) are messing with the overall message so need to be resolved. The implication with this is that the resolution needs to 'fix' the proxy so it does not contradict the message. So what does the ... miss out? Here's the same quote with the middle portion restored:

But the current diagram with the tree ring only data somewhat contradicts the multiproxy curve and dilutes the message rather significantly. We want the truth. Mike thinks it lies nearer his result (which seems in accord with what we know about worldwide mountain glaciers and, less clearly, suspect about solar variations). The tree ring results may still suffer from lack of multicentury time scale variance. This is probably the most important issue to resolve in Chapter 2 at present.

Wow - what a difference - now we see that the main aim is the truth; the scientists want to know what the data is telling them. That line, "We want the truth" blows a hole in the denial case of communist conspiracy evil mad scientists scientific fraud - when you read the emails, rather than somebody else's spin on them, you can see this was normal science. No conspiracy or fraud - just normal science that leads to some uncomfortable truths for cultures built on capitalism, oil addiction and hyper-consumption.

US based Exxon Mobil - 2009 reported $45.2 billion profit - taxes paid? $0.

That's right denial funding oil giant Exxon Mobil used complex tax schemes of avoid paying any US income tax on it's $45.2 billion profit:

Big Oil giant Exxon Mobil, which last year reported a record $45.2 billion profit, paid the most taxes of any corporation, but none of it went to the IRS. ... Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas

But Exxon ends up looking like a tax angel next to the makers of everything from media, to guns to car, General Electric;

Most egregious...is General Electric, which generated $10.3 billion in pretax income, but ended up owing nothing to Uncle Sam. In fact, it recorded a tax benefit of $1.1 billion.

Wow. Nice.
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I'm speechless. Greedy bastards.

More on Denial's Bootboys

Part 2 of an ongoing investigation into the orchestrated campaign of bullying, disinformation and denial run by an unholy cabal of right-wing media, free-trade think-tanks and big oil/coal and gas concerns;

The floods of offensive and threatening emails aimed at intimidating climate scientists have all the signs of an orchestrated campaign by sceptics groups. The links are well-hidden because mobilizing people to send abuse and threats is well outside the accepted bounds of democratic participation; indeed, some of it is illegal. And an apparently spontaneous expression of citizen concern carries more weight than an organised operation by a zealous group.

Without access to ISP logs, it is difficult to trace the emails to a source. However, it is clear that hard-line denialists congregate electronically at a number of internet nodes where they engage in mutual reinforcement of their opinions and stoke the rage that lies behind them.

Those who operate these sites retail the "information" that reinforces the assertions made by their followers. They often post highly personal attacks on individuals who speak in favour of mainstream science and measures to combat global warming, knowing from experience that they will stimulate a stream of vituperation from their supporters.

The posts on these sites often provoke an outpouring of the most outlandish conspiracy theories and vilification of individuals. There is no restraining influence and, in the middle of one of these frenzies, it would be a brave sceptic who called for caution and moderation in the ideas expressed or the language used.

How Much is Global Warming Denial Worth? $1120 Million Per Day

We're all familiar by now with the vast sums the coal and oil industry has spend on obfuscating the issue of global warming. So for example, the From the American Petroleum Institute dis-information campaign would consider it a victory when, amongst other things, they had got...

Industry senior leadership understands uncertainties in climate science, making them stronger ambassadors to those who shape climate policy.

So why would the oil industry want to stack the negotiarions - following the money - what is it worth them them. Well in a recent article in the Economist magazine (about peak oil) there was this:

The IEA reckons that co-ordinated action to restrict the increase in global temperatures to 2ºC will restrict global demand for oil to 89m b/d in 2030, compared with 105m b/d if no action is taken.

So there is a difference of 16million b/d (that is Barrels Per Day) so given the cost of a barrel is currently around $70, so you can see that it represents $1120 million dollars per day in difference. So event mitigating the supply a bit - by obfuscating the science and promoting uncertainty is worth $millions per day.

That's why denial has been so well funded.
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More on Bristol's Neo-Labour Hope

I posted a short article about the new guy from the Neo-Labour party and how hollow his rhetoric sounds. I wrote;

Would this be the same Labour government who for the last eight years allied itself to the most significant anti-Climate Change activists in the world, the Bu$h regime. The same government who approved the third runway at Heathrow and who – via its proxy in SWRDA has, until recently, been using public funds to subsidise airport development in the region.

Then Paul (or at least a poster claiming to be Paul) appeared on the blog to comment;

Yes these are the reasons I want to take the debate to the heart of Government...

and:

and there was me expecting a endorsement from the anarchists of Bristol. I am standing to change and improve the Labour Government not to endorse everything they have done. Indeed I was partly motivated to put myself forward to the local Labour Party to ensure that a robotic yes person politician was not selected.

I will be publishing a fuller political statement on my website soon to set out where I stand on a range of issues.

So at least he has a sense of humour. But seriously - how bankrupt is Labour? Totally. It is staggeringly simplistic (or simply propaganda to us voting masses) that Paul thinks he can 'take the debate to the heart of Government' - a government who don't give a shit about what you or I think.

At a local level; the ongoing debacle over cycling city and Red Trousergate shows the lack of environmental will-power of the local Labour party; they they had wanted the enviroment to count - they could have made it so. But no, it's spin and developers first.

At a national level; Heathrow - no clearer demonstration of climate first could be shown, but not - its developers and spin first. The recent account of the twists and turns of the official reports and consultation in such a way to favour the polluters is staggering. (examples 1 ,2 & 3)

At an international level; Former Neo-Labour leader, friend of big oil, Tony 'War Crimes' Bliar is going to be raking in even more ca$h as an advisor to the Colombian government of Álvaro Uribe. Yes, Bliar is helping out with a government of death squads, big oil and environmental degradation thanks to the failed coca spraying.

Face it if environmentalism is a left turn on the political road-map, then the Labour party is a right.
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Realpolitik Iraq

All those people who died to give Iraq 'freedom' and 'democracy', all those trillions spent to get it. This is what it looks like...

The United States has asked Israel to check the possibility of pumping oil from Iraq to the oil refineries in Haifa. The request came in a telegram last week from a senior Pentagon official to a top Foreign Ministry official in Jerusalem.

Hang on, it it not Iraq's oil? Nope - it just happens to be under Iraqi soil, but goddam it, it U$A OIL and they will do with it as they please. And before us Brits get smug over this, our government is at it too;

A social justice group has obtained documents showing that the British government tried to influence a new Iraqi oil law in favour of UK businesses. The London-based Platform group said on Friday that the documents showed British diplomats tried to exclude Iraqi oil firms in favour of firms such as BP and Shell.

(Also interesting to note as the twice-fired minsiter, now EU trade representative Peter 'Bliar' Mandelson talks down a boycott of China, the Chinese government move to buys a skate in BP.)
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The Iraq Jigsaw

The pieces are all coming together now. A recently published transcript of a discussion between Jose Maria Aznar and Bu$h shows how this belligerent, arrogant war criminal thinks - and backs up the real reason for the war - oil.

Bu$h shows that getting rid of Saddam is not enough when they talk about an offer for him to flee into exile. Now nobody in their right mind would like to see a mass murderer like Saddam let off the noose, but given the alternative involves the death of a lot of people (a million so far) - what would you pick? This is the dicussion about that point;

'Aznar: Is it certain that any possibility exists that Saddam Hussein will go into exile?

Bush: The possibility exists, including that he will be assassinated.

Aznar: Exile with a guarantee?

Bush: No guarantee! He is a thug, a terrorist, a war criminal.

So one way to avoid war is lost because Bu$h says so. I beleive that the reason that he cannot accept this is that it would not leave U$ troops on the ground in Iraq, and without that, they do not control the oil. There is no solution he can accept that does not put him and his cronies in control of Iraqi oil. He is gambling with the lives of millions of people. If this is shocking, you can see how he does it again later on in the discussion;

Aznar: I’m not asking that you have endless patience. Simply that everything is done to [have maximum international support].

Bush: Countries like Mexico, Chile, Angola, and Cameroon should know that what’s at stake is the security of the United States . . . [Chilean President Ricardo] Lagos should know that the Free Trade Accord with Chile is awaiting Senate confirmation and a negative attitude about this could put ratification in danger. Angola is receiving Millennium Account funds [to help alleviate poverty] and that could be jeopardized also if he’s not supportive…

Aznar: Tony [Blair] wants to wait until March 14.

Bush: I prefer the 10th. This is like a good cop, bad cop routine. I don’t care if I’m the bad cop and he’s the good cop.

He does not care if he has to withdraw money given to help some of the poorest people on the planet in Angola to boost support for his murderous war. Bu$h is not the bad cop, he's a war criminal as is Bliar for supporting him.

Iraq: It WAS All About Oil

Confirmed, by a member of the political elite, what we all knew - that the Iraq war was about oil. Alan Greenspan, former head of the Federal Reserve spells it out;

"I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil..."

This when American's are protesting the war and Bu$h confirms the ongoing occupation of Iraq and the terrorists agree as letter written by senior al-Qaeda operative Atiyah Abd al-Rahman states that "prolonging the war is in our interest."

Makes you think;

"The big bankers of the world, who practise the terrorism of money, are more powerful than kings and field marshals, even more than the Pope of Rome himself. They never dirty their hands. They kill no-one: they limit themselves to applauding the show."

Eduardo Galeano

Transition Bristol - Preparing for Post-Oil Life

The Transition Bristol talk at the Trinity Centre last night was a very interesting affair with many positive points and plenty of unanswered questions. The talk was about peak oil and how we might prepare for it. If you've not yet heard about peak oil (and gas), its the theory originated by petrogeologist M King Hubbert that oil is extracted from the ground in a predictable manner – initially it gushes out and is easy and cheap to obtain, then it hits a peak whereupon the rate declines no matter what. This, when applied to a regional or global supply means when we hit the peak it is downhill all the way!


(Image 'Peak Oil' by Tim Floyd, from exhibition in winter 2006 at Kebele)

The talk was a very positive and well attended event. In contrast the the first peak oil event in Bristol back in summer 2004 where a small group of us sat in around in St.Werburghs feeling very bleak about the future.

Patrick Holden, director of the soil association opened the evening saying that he felt there were three main issues facing us in the 21st century; climate change, localism and food security, remarking, "If climate change is our guilty conscience then peak oil is the train about to hit it..." He went on to introduce the main speaker Rob Hopkins to a packed out audience of a couple of hundred people.

I'll do my best to summarise Rob's speech: He said that with oil until the peak, demand has driven its supply. After the peak this reverses and supply will dictate demand. He talked of how North Sea supplies have peaked and are some of the most rapidly diminishing energy supplies on the planet. Despite this the UK government says we don't need to worry about supply until 2030 based on official figures. However for various reasons such as OPEC quotas, historically the official figures are often overestimated. He cited Kuwait as an example which may have exaggerated its reserves by double the real amount and if this is true its drops the global supply by 5%! He also talked about peak gas – as big a questions and one that follows the same theory as oil only if seems to happen at a quicker rate as our indigenous supplies that fuel about 90% of our needs currently diminish rapidly. So when will the peak hit? In the US it hit in 1970, in the North Sea it hit in in 2004. Globally the figures go from a couple of years ago up to 2050. Rob suggested that if you look to the independent surveys on the issue they tend to go for somewhere around 2009 to 2012. If this is the case, he noted, then we need to act and quoted the Hirsch Report into the Peaking of World Oil Production: Impacts, Mitigation, and Risk Management commissioned by the US Department of Energy;

"The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking."

Coupled with the predictions of peak oil cited, that would mean action needed to begin a couple of years ago! From here he said there are four possible routes;

- Techno-Fantasy – where technology solves all our problems with sci-fi advances such as mining the moon and so on.
- Green Tech Stability – where we carry on as we are just using greener technology alternatives and hope it works out.
- Earth Stewardship – where we begin to prepare to the low-energy future as best we can.
- Atlantis – where the empire of man falls. ("The world shrinking down to a raw core of parsible entities. The names of things slowly following those things into oblivion. Colours. The names of birds. Things to eat. Finally the names of things one believed to be true." - from The Road)

He suggested that Earth Stewardship is the only reasonable approach to the issue. The Techno-Fantasy is too much of a risky dream, the Green Tech Stability ignores reality (for example to run the current cars in circulation on biodiesel would take four times as much agricultural land as we have in the UK).

He talked of the issues of 'resilience' and that the amount of resilience a community has is a measure of how well it can adapt and cope with the rising oil prices that will follow the peak. This has already happened in Cuba, who following its loss of cheap oil from the former Soviet Union has to adapt, and has done so amazingly.

So what can be done? He said we need to increase the resilience of our communities. Things like local composting, planting trees with produce we can eat, local building materials, local investment schemes and currencies. This will also mean a huge range of changes; moving to low/zero energy building based on local materials, new local economics, re-discovery of old knowledge from the pre-oil days, a great practical re-skilling, designs based on local availability, growing hemp (hurah!). He set his students as Kinsale, Ireland to look at the issue and together authored the Kinsale Energy Descent Action Plan – a vision of a post-oil community. This has since been adopted by the town council to be implemented. There is also an ongoing project in Totnes.

Following his speech, which got a huge round of applause, Barbara Janke (LibDem leader of Bristol City Council) stood up and said she was interested in looking at this issues. Questions from the floor followed; how would a large urban area like Bristol with suburbs cope? (it was suggested that Bristol is more like a collection of villages and so it may need to be done on a community level) How do we stop people green-washing the issue (good point, no clear answers as to how), how would these ideas fare in the face of corporations/governments who saw their power eroding (we have to build the institutions and infrastructure we would like to see in the post oil world.

A couple of reflections occur – we can't be underestimate about how the powerful will respond to this crisis. We have already witnessed the launching of a global resource war (under the disguise of the 'War on Terror (TM)' which has seen tens of thousands killed, millions displaced and billions spent in the pursuit of control of the diminishing oil supply.

Another reflection is how rubbish our local paper is. On the day of this talk the Evening Pest ran with the headline 'The Quay to Success?' - an uncritical gushing about an identikit 'development' project who's design is to make the waterfront look like any other waterfront and is the antithesis of everything the packed Transition Towns meeting was discussing. (Note: this is another SWRDA project, the vacuous, gray bureaucrats who are backing another white-elephant in the form of the Bristol Airport expansion).

Links:

http://www.transitiontowns.org/
http://www.transitiontowns.org/Totnes/
http://www.transitioncitybristol.org/

The Climate War

Wars happen for all sorts of reasons; resources and religion being the most often cites ones. I would argue that Iraq and Afghanistan and the whole War on Terror (TM) is a resource war with religion playing second fiddle. I would say it is the first resource was of the end of the age of oil. With that in mind, an article in the Guardian pointed to another reason for war - related to resources - the conflict in about which the West seems so 'powerless' to act, yet whos consumor driven system has created; climate change...

Something fundamental has changed in this part of Africa, and it happened within a generation. From a state of sectarian innocence in which the dividing line between Arab and African was meaningless, something made people pick sides, and hardened their new sense of identity into ethnic hatred, all in the past two decades. What changed, the evidence suggests, was the climate....when a ferocious drought and famine transformed Sudan and the whole Horn of Africa. It killed more than a million people and laid waste livestock herds. Whether they maintained their way of life or tried to take up settled cultivation, the pastoralists of Darfur clashed repeatedly with its farmers. A string of conflicts broke out as both sides armed themselves, and those conflicts created the template for today's disaster.

The Tal Afar Plan

So in Iraq, Bu$h plans to 'surge'. The plan is supposed to be based on the 'victory' of Tal Afar. The victory refers to the second assault on the city where it was surrounded by a kind of wall/moat thing and people only allowed in via check points and with ID cards. As with Fallujah, Tal Afar was a pyhrric victory and the violence has returned. After the victory in September 2005, there have been plenty of attacks including suicide bombings and IEDs. Such assaults only ever lead to a temporary victory because insurgent warfare is not about territory, like conventional war, its about a subtler undercurrent of control.

Not only that, as with all the US assaults in Iraq, as with Falujah, there is a heavy civilian cost which the media often glosses over with the thrill of the military hardware;

In the wake of a savage US offensive on the city of Tal Afar, residents have begun returning home, only to find that their houses destroyed, no water available and that they must generate their own electricity if they want the luxury of power... following the ferocious US bombing and shelling that lasted for days on end. Many families have been forced to live in tents pitched atop the mounds of rubble that once were their homes.

The image below, to illustrate this cost, shows a girl, covered in her parents blood, who were shot and killed as a US check point outside Tal Afar;

The picture on the front page of The Irish Times was a large four-color picture of a small Iraqi girl. Her little body was a coil of steel. She sat knees up, cowering, screaming madly into the dark night. Her white clothes and spread hands and small tight face were blood-spattered. The blood was the blood of her father and mother, shot through the car window in Tal Afar by American soldiers while she sat beside her parents in the car, her four brothers and sisters in the back seat.

Its sickening to think that our dear leaders are looking to widen the war, rattling their swords at Iran and Syria while Iraq continues with it brutal civil war - a civil war our leaders are dragging us into deeper and deeper.

What sickens me most is this is going on while our court system wastes money and resources trying to prosecute somebody who did the best any individual could do to stop this insane slaughter. Josh, the last of the Fairford Five, is a principled and moral individual who far from being in court should be given the highest civic honour we have. It is Bliar, the war criminal, who should be on trial, not Josh. I hope to see they day when the events in More4's drama 'The Trial of Tony Blair' come to pass.

It does make you think that Michael T.Klare is correct when he states that 'Energo-Fascism is our Future' - think of the amount of oil those bombers based at Fairford took to build, maintain, fly over here then arm and fly to Iraq to bomb people? Short answer is lots; 'the Pentagon is itself one of the world's great oil guzzlers, consuming 134 million barrels of oil in 2005, as much as the entire nation of Sweden.' We also know that all this oil was spent to secure more oil in Iraq. Investing oil to gain oil - this is why the state needs to try Josh - he tired to interrupt the global oil Jihad, and so must pay the price.