Former CBS News president Richard Salant (1961 - 64 and 1966 - 79) explained the major media's role: "Our job is to give people not what they want, but what we decide they ought to have." ...and to this very day most Americans haven't noticed they're being brained washed! ~ N. Hooben
Pelosi Blocks Gas Price Relief By Henry Lamb July 29, 2008
House Speaker Nancy Pelosi told CNN that she would block any vote to allow offshore drilling. This remarkable stance comes in the face of the latest poll that says 73 percent of Americans favor offshore drilling, while only 27 percent oppose it. Nancy Pelosi again displays her contempt for her employer, the American people. Her arrogance and wrong-headed philosophy have led Congress to an approval rating of a staggering 14 percent, the lowest ever.
The arguments she advances in defense of her position are, at best, silly, and at worst, devious. She says she will not allow additional reserves to be drilled because oil companies already hold leases on 68 million acres of federal land that are not being drilled. She ignores the testimony of oil company representatives who tell her that had they found oil under these lands, they would be pumping it. The oil companies need to drill where the oil is.
There is plenty of oil to drill. Known reserves offshore, in Alaska, the Bakken fields of North Dakota and Montana, and elsewhere, can meet the energy demand for at least 100 years. But Pelosi and her colleagues don't want this oil produced. Pelosi says that it will take 10 years for this new oil supply to reach the pump, and then, it would reduce the price by only two-cents per gallon. This price projection is pure fiction.
As an alternative, she says the president should release 70 million barrels of oil from the strategic reserves, which would provide immediate price relief. Is this silly, stupid, or just more of Pelosi's political doublespeak? This alternative would supply less than four days of the U.S. demand, which would not likely even be noticed at the pump. It would do nothing to solve the underlying problem of too little supply.
Pelosi, like Al Gore, wants to end America's reliance on oil, and switch to new, exotic, yet-to-be-developed energy sources such as wind, solar, hydrogen, and in particular, electric cars. America has been investing heavily in research in all these areas for years. Some significant progress has been made. No one in their right mind -- which includes Al Gore -- can think this new technology can be available within the next ten years, with enough distribution to make hydrogen filling stations and recharging for electric cars viable options. It is certain, however, that by developing known oil reserves, the U.S. energy demand can be met in 10 years, or less.
There is a big disconnect between the rush to convert automobiles to batteries, and the reality that the electricity to recharge those batteries would require a massive new generating capacity. The same flawed excuse of "protecting the environment," has also blocked the expansion of electricity generating capacity. If the self-appointed gods of environmental protection won't allow the expansion of electricity generation, how are the batteries of all these new electric vehicles going to be recharged every night?
Another major disconnect between the rush to replace oil with renewable sources such as wind and solar is the negative environmental impact of these renewable technologies. For example, to replace a single 50-megawatt coal-fired generating plant, which may occupy as much as 20 acres of land, approximately 3,000 acres of land would have to be occupied by wind turbines. To produce 50-megawatts of electricity from solar panels would virtually cover even more land. How can these protectors of the environment justify blanketing the land with whirling bird-killers and solar panels that block the sun from all forms of life beneath them?
Some environmental purists genuinely want America and the world to return to the stone-age. Nancy Pelosi is no environmental purist. She is a political creature, which is a person so intoxicated by power that the instinct to retain and expand it overwhelms common sense, logic, ethics, morality, or anything else that might get in the way.
By her refusal to even allow debate on proposals to expand oil development -- where oil is known to exist -- she stands like a barricade between thirsty consumers and a new mountain stream. She apparently sees herself as a self-appointed savior; she is, in truth, acting as judge and jury, condemning a nation desperate for more energy to spiraling energy costs for possibly another generation.
This is not a new posture for Democrat leadership. Democrats in the House, the Senate, and the White House have blocked expansion of oil supplies for more than a decade. Had Bill Clinton not vetoed the bill that would have opened the Arctic National Wildlife Refuge more than a decade ago, gas prices would not be as high as they are today. Millions of jobs would have been created, and every American could have saved the money needlessly paid to foreign sources for oil, simply because one man played God and defied the express will of the people.
Nancy Pelosi is now playing God, standing where Bill Clinton stood more than a decade ago, defying the expressed will of the people by blocking access to the known oil reserves that are so desperately needed by the entire nation.
Take a deeper look here folks. You're getting the shaft again! Now you tell me, "What the heck is a CDO?" You had us fooled with sub-prime mortgages and now the ole slight of hand trick...aah, let's see...we'll just rename it a big fat CDO. Now that doesn't sound too bad, now does it? Doesn't have that ring of DEBT sound to it. Oh, now how did we get here in the first place? Was it by offering such nifty financing? Twenty-two cents on the dollar! What's in your wallet? Will the last sucker out of Merrill Lynch please shut off the light. Thank you. - Storm'n Norm'n
Merrill to sell $8.5 bln stock after big write-down
By Christian Plumb and Jonathan Stempel
NEW YORK (Reuters) - Merrill Lynch & Co said on Monday it will take a $5.7 billion third-quarter write-down as it unloads huge amounts of risky debt, and will raise $8.5 billion by selling new stock.
The Wall Street investment bank and brokerage announced its plans less than two weeks after posting a $4.9 billion second- quarter loss, hit by $9 billion of write-downs in that period.
In a sign of how toxic Merrill's debt holdings have become, it has agreed to sell $30.6 billion of collateralized debt obligations (CDOs), a kind of repackaged debt, to an affiliate of private equity fund Lone Star Funds, for just $6.7 billion, or about 22 cents on the dollar.
The fire sale nature of that deal will add to concerns that the global credit crisis, which has already led to more than $400 billion of write-downs and losses at major banks, still has a long way to run.
"What is happening to Merrill and others is death by a thousand cuts. It's painful to see it happen over and over again," said Daniel Alpert, managing director at investment bank Westwood Capital.
Merrill said its stock sale, which includes a $3.4 billion purchase by Singapore's state-run Temasek Holdings, may grow to $9.8 billion. Management also plans to buy 750,000 shares, it said.
Monday's write-down and plans to raise capital may raise further questions about the ability of John Thain, who only became Merrill's CEO in December following the ouster of Stanley O'Neal, to turn around the firm.
The company has lost $19.2 billion in the past year and suffered more than $40 billion of write-downs from subprime mortgages and other risky debt. Its shares sank 11.6 percent in New York Stock Exchange trading ahead of the announcement and are now less than a third of their value a year ago.
The stock was little changed at $24.35 in after-hours electronic trading after dropping $3.19 to $24.33 in regular trading.
Analysts were quick to cut forecasts for Merrill, with Banc of America lowering its price target to $40 a share from $47, and Credit Suisse widening its loss per share estimate to $12.70 from a former view of a loss of $7.
"Are things that much worse than we were led to believe?" said James Ellman, president of Seacliff Capital in San Francisco. "If people were going to believe Thain when he said Merrill raised more capital than it needed to and had taken conservative marks on its securities book, I'm not sure they're going to believe him tomorrow morning."
On a July 17 conference call, Thain said: "Right now we believe we are in a very comfortable spot in terms of our capital." He has made a series of similar comments over the past seven months.
The most recent round of capital raising was particularly bruising because of provisions Merrill agreed to when it raised money in December and January. Essentially, the investment bank said it would give the investors in those raisings extra compensation if it later issued equity at a lower price.
That meant that in this offering, more than half the shares or share proceeds will go to prior investors, with $2.5 billion paid to compensate Temasek, and another $2.4 billion paid as additional dividends to investors in convertible securities.
Temasek agreed to invest the $2.5 billion in the new offering, as a large part of its purchase of $3.4 billion of common stock in this deal.
PRIOR SALES
The Lone Star deal will result in a $4.4 billion write-down for Merrill and it will finance about 75 percent of the purchase price, Merrill said.
Merrill also said it agreed to help bail out bond insurer Security Capital Assurance Ltd by agreeing to accept a $500 million cash payment in exchange for canceling some credit default swaps and ending related litigation.
Merrill said the settlement, together with the potential settlement of other CDO hedges, will result in a $1.3 billion write-down.
Earlier this month, Merrill completed the sale of its 20 percent stake in Bloomberg LP, the news and financial data company, to Bloomberg Inc for $4.43 billion. Merrill also said then it was in talks to sell a controlling interest in a unit that provides services to mutual funds, in a deal that values the entire unit at $3.5 billion.
Assuming Merrill sells shares at its Monday closing price in the new offering, Temasek would have about 140 million new shares in Merrill. When combined with its prior holdings, it would have 226.645 million Merrill shares.
If this new offering leaves Merrill with about 1.528 billion shares, Temasek would own about 15 percent of Merrill, which may raise some concerns among U.S. politicians about the level of foreign ownership at one of the nation's best-known banks.
Temasek previously informally agreed to refrain from owning more than 10 percent of Merrill, according to a source familiar with the fund. A Temasek spokeswoman said on Tuesday that a portion of the deal is subject to regulatory approval.
Merrill declined to comment on specifics of the stock offering, such as the price. The company's market value was about $24 billion as of Monday's close, based on reported shares outstanding.
Given that Merrill's retail brokerage business has been estimated by analysts to be worth at least $25 billion, while its near-50 percent stake in asset management company BlackRock Inc is worth about $13 billion, its investment banking business has an implied negative value.
WRITE-DOWNS
Merrill Lynch agreed in January to sell about $6.6 billion of mandatory convertible preferred securities. Investors in about $5.4 billion of those convertibles have agreed to exchange their securities for about 195 million shares of preferred shares, Merrill announced on Monday. The other investors agreed to exchange their securities into a new mandatory convertible preferred security.
In Seoul, Korea Investment Corp (KIC) said it converted $2 billion worth of preferred Merrill shares into common stock.
Despite the latest write-downs, Merrill still has wide exposure to mortgage debt.
As of June 27, it said it had exposures of $33.7 billion to U.S. prime mortgages, $1.01 billion to U.S. subprime mortgages, $1.54 billion to "Alt-A" mortgages and $7.45 billion to non- U.S. residential mortgages.
William Smith, president of Smith Asset Management Inc in New York, said Merrill fetched a "horrendous" price for the CDOs in the sale announced on Monday.
"The problem here is with Thain. You can throw him into the credibility problem camp now," Smith said. "It's tough to call the bottom on these things because it seems like it's never ending, but this could be viewed as the watershed."
(Additional reporting by Doris Frankel in CHICAGO; Jonathan Spicer, Dan Wilchins and Lilla Zuill in NEW YORK; Kevin Lim and Louise Heavens in SINGAPORE and Kim Yeon-hee in SEOUL; editing by Jeffrey Benkoe, Andre Grenon & Ian Geoghegan)
Now make the connection to this: (see story below...I'm testing your worldly knowledge)Storm'n Norm'n
Southeast Asia
Dec 13, 2006
COMMENT Singapore's troubled Shin Corp deal By Thitinan Pongsudhirak
BANGKOK - No other country"s ruling family does it quite like the Lees of Singapore. National founder Lee Kuan Yew built a gleaming metropolis out of a swampy island in four quick decades of rapid economic growth. His son, current Prime Minister Lee Hsien Loong, has made a priority of carrying Singapore's economic-development miracle forward through diversifying its investment in the region.
The younger Lee's wife, Ho Ching, and brother, Lee Hsien Yang, spearhead Singapore's interlocking state-owned investment
vehicles, which are fortified and facilitated by a web of often-opaque cross-share holdings. Despite pockets of opposition disenchantment, few outsiders would dispute that Singapore is a place where things get done because of an enlightened consensus among its political elites, underpinned by the country's geographically and historically peculiar strengths.
But Singapore's state-engineered, elite-driven economic success at home has recently been embroiled in controversy and alleged scandal when venturing abroad. The most glaring example involves state-run Temasek Holdings' purchase last January of Thailand's Shin Corp, a communications conglomerate founded by recently deposed prime minister Thaksin Shinawatra and majority-owned by his family.
This year, Temasek's US$1.9 billion buyout of the Shinawatra family's 49.3% stake in Shin Corp added fuel to the fire of the popular protests that climaxed in the September 19 military coup that upended Thaksin's government. The controversial transaction apparently surpassed legal limits on foreign ownership of crucial national infrastructure, including telecommunications frequencies, which Shin Corp operated through a government concession.
Questions surrounding the legality of the transaction energized what at the time was a limited Bangkok-based protest movement against Thaksin into a nationwide coalition bent on ousting him from power.
Notwithstanding their implicit role in Thaksin's political demise and Thailand's long and costly political crisis, Singapore's Lees have remained remarkably defiant. Rather than owning up to Temasek's apparent misjudgment, both Prime Minister Lee and his father Minister Mentor Lee have remained adamant that the government-owned holding company is a by-the-books business enterprise that made a sound investment decision through its purchase of Shin Corp - even as the conglomerate's shares have nosedived amid the political furor sparked by the deal.
Ho Ching, Temasek's executive director, has kept a low profile amid the loss-making deal and allowed her husband and father-in-law to take the lead in commenting on it. In a break from the region's ethic of non-interference in other countries' internal affairs, Prime Minister Lee said in a recent speech to the Asian-European Editors' Forum that the September 19 putsch was a "setback" for Thailand's democracy - a peculiar assertion from the leader of an authoritarian country that recently jailed a political opposition figure for merely speaking in public without a government permit.
Lee justified his assessment on Thaksin's electoral successes, but his comments, like Temasek's fateful acquisition decision, missed the essence of the Thai political crisis. It was the steady erosion of Thaksin's political legitimacy through a long trail of constitutional violations, government corruption, and abuse of state power that finally triggered his downfall. His systematic undermining of independent institutions designed to check and balance elected governments threatened Thailand's ambitious democratic-reform drive.
Thaksin was often lauded, and his tactics often mirrored Singapore's soft authoritarian brand of governance. With similar bravado, the elder Lee followed his son's remark at the recent conference with his insistence that the Temasek-Shin Corp transaction, which after a subsequent tender offer for outstanding shares took Temasek's holding to 96% of the Thai conglomerate, was "completely above board". Significantly, that assertion will be tested in Thai, not Singaporean, courts.
Dodgy deal The circumstances surrounding the transaction are complicated, and seemingly constructed to obfuscate who held what and in what amount. To finalize the deal, Temasek set up a proxy company known as Kularb Kaew, nominally a majority Thai-owned company that bought a stake in Shin Corp with loans provided by Temasek. Critics contend that the shareholding structure could represent a violation of Thailand's foreign-business law and its 49% foreign-shareholding limit for telecommunications ventures.
The scrutiny Temasek's maneuvers have received has understandably sent ripples through other foreign ventures in Thailand, some of which have used similar shareholding structures. The Temasek deal and the recent leniency Thai authorities have demonstrated in enforcing the Foreign Business Act poses a conundrum for Thailand's new government - one that if handled badly could affect broad investor confidence in the Thai economy.
A potential legal ruling against Temasek's nominee shareholding structure, depending on the details of the decision, could set a legal precedent that unravels other established foreign investments. It may yet be argued that the Temasek-Shin Corp deal represents a peculiar case, because of the state concessions that Thaksin's family ostensibly sold to a foreign entity.
A drawn-out legal battle would put Temasek back in the middle of the various conflict-of-interest allegations leveled against Thaksin's government during anti-government protests, and would likely raise hard questions about the circumstances surrounding Shin Corp's and its subsidiaries' skyrocketing profits and share values during Thaksin's five-year political tenure.
Temasek has belatedly established a corporate office in Bangkok, presumably to mount a public relations drive and to prepare a legal defense in protection of its financially damaged assets. Shin Corp's share price has gone into a tailspin since the January transaction, and proposed massive fines against the company's iTV subsidiary raise doubts about the conglomerate's financial future under Temasek's ownership.
Moreover, the Temasek-Shin Corp saga has put broad Thailand-Singapore relations at risk. Singapore is currently one of Thailand's leading foreign investors, highlighted by big joint ventures in the banking sector. Despite Prime Minister Lee's ironic remarks on the state of Thai democracy, he recently deemed it appropriate to raise the Temasek deal during his recent personal meeting with military-installed Prime Minister Surayud Chulanont.
Surayud, known for his efforts as army commander to push the military out of business, rightly confined the Temasek-Shin Corp case to the judicial process. That is, Thai courts, rather than the Prime Minister's Office, will have the final say on the legality of Temasek's investment decision.
If Singaporean leaders hope to repair the damage done to Singapore Inc's reputation in Thailand and maintain cordial commercial ties, they could at least own up to the fact that the Temasek-Shin Corp deal had an unintended impact on Thailand's political stability. A Teflon attitude that Singapore's ruling elite can do no wrong, as regularly impressed upon the island republic's own population, will unfortunately only exacerbate the damage done.
Thitinan Pongsudhirak is director of Chulalongkorn University"s Institute of Security and International Studies based in Bangkok, Thailand. The views expressed are his own.
(Copyright 2006 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)
Do something for his country? Yeah, I bet! He’s still going to cast his vote for Obama. It’s written all over his face!
I was a poll watcher at the 2006 elections in Greene County Alabama…to make a long story short…the vote was a joke. A pre-determined joke! I still have my notes and I can name names including the local judge who did not do her job when discrepancies were identified to her. I even hung up on her after telling her to get down here and do your job…she never showed up and the voting went on…what a joke…and to top it all off it was sponsored by the Alabama Democratic Party…
Do something for his country? Yeah, I bet! He’s still going to cast his vote for Obama. It’s written all over his face!
I was a poll watcher at the 2006 elections in Greene County Alabama…to make a long story short…the vote was a joke.
A pre-determined joke! I still have my notes and I can name names including the local judge who did not do her job when discrepancies were identified to her. I even hung up on her after telling her to get down here and do your job…she never showed up and the voting went on…what a joke…and to top it all off it was sponsored by the Alabama Democratic Party…