Archive for August, 2010


Housing’s a wreck. Builders rally. Huh?

From www.cnn.com

chart_ws_stock_spdrsphomebuildersetf.top.png

 
Shares of Toll Brothers and other builders have rallied the past two days despite the fact that existing and new home sales plunged in July.
By Paul R. La Monica, editor at large August 25, 2010: 12:31 PM ET
NEW YORK (CNNMoney.com) — Stop me if you’ve heard this before. The housing market is still in shambles.

Existing home sales plummeted in July. New home sales sunk as well, hitting a record low. And even though luxury homebuilder Toll Brothers reported a surprise quarterly profit Wednesday, that was largely due to a tax break. Sales were down slightly from a year ago and orders dropped 16%.

Despite this, some investors appear willing to once again bet that the housing market has hit bottom. Shares of Toll Brothers (TOL) were up more than 2% in early afternoon trading.

The S&P SPDR Homebuilders (XHB) exchange traded fund, which holds other builders such as KB Home (KBH) and Pulte (PHM), as well as building materials makers and home improvement retailers, rose 1.5%.

It’s a strange reaction to say the least. The broad market is down because of more gloomy housing data. But the companies that are most directly tied to the health of the housing market are up?

It doesn’t make a heck of a lot of sense. It may be a case of traders betting for the umpteenth time that this is finally a bottom for housing.

That’s a mistake. Now that the tax credit for homebuyers has expired, it’s difficult to imagine what can juice the real estate market again in the near-term.

"The sales numbers have been uniformly and strikingly bad and it’s probably only a matter of time before prices start slipping again," said Zach Pandl, economist with Nomura Securities in New York. "It’s clear that the housing recovery was dependent on government aid. Without that, a recovery is not going to continue."

 

Pandl argues that the Federal Reserve and Treasury need to do more to help the housing market, such as making financing easier and continuing to do what they can to keep interest rates low.

But Steven Kyle, professor of applied economics at Cornell University in Ithaca, N.Y., argued that already super-low mortgage rates aren’t making much of a difference.

"The market has been propped up artificially. Interest rates are as low as you could want and we’re still not off to the races," he said.

Kyle added that there’s no reason to get excited about the prospects for housing until inventories decline further and home prices rise at a more steady, consistent rate.

So traders may be banking on the fact that the worst is really over for housing. But one fund manager who owns shares of Pulte said he’s holding the stock for the long haul, not because he expects immediate improvement on the horizon.

"Investors may be factoring in a lot of the bad news into the stock prices of the builders but I don’t think many people are looking for a turn in the market yet," said Craig Hodges, co-manager of the Hodges Pure Contrarian fund in Dallas. "Things will eventually get better but nobody knows when."

Still, even for a long-term housing bull, that lack of certainty is a big problem. Vicki Bryan, senior analyst who covers homebuilders for Gimme Credit LLC, a corporate bond research firm based in New York, said that people are clinging to the false hope that housing will improve before the economy.

But given the big glut of homes already out there and worries about more foreclosures as unemployment remains high, she said housing is going to lag, not lead a rebound.

"There is a lot of wrong-minded thinking. People are assuming that the housing market is going to lift the economy out of recession. But the economy is going to need to improve first," Bryan said. "We could scrape around at low levels for several years."

– The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney.com, La Monica does not own positions in any individual stocks.  To top of page

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Sunday, March 14, 2010

Teal and Orange – Hollywood, Please Stop the Madness

Those of you who watch a lot of Hollywood movies may have noticed a certain trend that has consumed the industry in the last few years.  It is one of the most insidious and heinous practices that has ever overwhelmed the industry.  Am I talking about the lack of good scripts?  Do I speak of the dependency of a few mega-blockbuster hits to save the studios each year, or of the endless sequels and television retreads?  No, I am talking about something much more dangerous, much deadlier to the health of cinema.

I speak of course, of THE COLOR GRADING VIRUS THAT IS TEAL & ORANGE!!!

This is the insidious practice of color-grading every movie with a simplified, distilled palette of teal and orange like this:

Or this:


Or this:

So how did we get here, you may ask. Well, it’s a sad and sordid tale my friend, the combination of new digital technology and a good idea gone bad.

The Cohen brothers ushered in the new era of digital color grading with their excellent 2000 film, "Oh Brother, Where Art Thou." This was the first feature film to be entirely scanned into a computer, a process known as "Digital Intermediary", or DI.  Once inside the computer, the colorist now had unheard of control over every element of the image.  Imagine tweaking an entire movie with the tools and precision that one has with their still images using Photoshop, and you get some idea of what power was unleashed.

But was that power used for good…  Nooooooooooooooo, or course it wasn’t!

Some unnamed yahoo decided that the only acceptable look for a movie these days is this:

This screenshot from the excellent color theory and exploration site, kuler, shows what happens when you apply complementary color theory to flesh tones.  You see, flesh tones exist mostly in the orange range and when you look to the opposite end of the color wheel from that, where does one land?  Why looky here, we have our old friend Mr. Teal.  And anyone who has ever taken color theory 101 knows that if you take two complementary colors and put them next to each other, they will "pop", and sometimes even vibrate.  So, since people (flesh-tones) exist in almost every frame of every movie ever made, what could be better than applying complementary color theory to make people seem to "pop" from the background.  I mean, people are really important, aren’t they?

(By the way, filmmaker and tech guru Stu Maschwitz does a great job of explaining the nuts and bolts of how this is done on his blog, ProLost.)

From this seemingly innocuous supposition was unleashed a monstrosity that would eventually lead to one of the worst films ever, and one of the worst examples of unchecked teal and orange stupidity:

Yes, Transformers 2.

This movie took this color-look to extremes that only Michael Bay could vomit up.  Behold!

 This last shot especially concerns me.  I mean look at how orange Shia’s face here is.  He should really have that looked at by a professional.  I mean, is it just me, or does he look like one of these unfortunate souls:

Take a look at a few trailers of current and upcoming movies and you can see that the look is now firmly entrenched:

Let’s see, summer blockbuster movie Iron Man 2:

Yup.   How about recent horror flick – Wolfman:

Check.  Now, Wolfman at least has the respectability to be a little more subtle in its palette, but it is still there nonetheless.  Also, sometimes it will trade off and do one shot all orange (or gold) and one shot all teal (or blue):

How about upcoming retread flick Tron?  Now this movie can look any way it wants – it’s set inside a computer for cripes-sake!  Imagine the limitless possibilities of fantastic color design:

Oh crap!  Well, what about the characters, what do they look like?


Oh hell, I give up!

This infection would be ok if it was limited to only mindless summer action flicks but I’m afraid that’s not the case.  How about the fun new "Hot Tub Time Machine"?

Oh dang!  Well, surely in the 1980’s we will be free of this Teal and Orange universe… right?

Wow, I sure don’t remember 1980 looking like that.  In fact, nothing ever has looked like that because it’s physically impossible.  You see, in order to get flesh tones to look that warm and orangey, the entire image would look warm and orangey – like golden hour, just before sunset. And in order to get teals to look that blue and tealey, the entire image would look cold and blue – like at night.  Never in real-life shall the two meet – at least not in this exaggerated way:

Geez Chevy, what have they DONE TO YOUR FACE!!

Please people, spread the word and fight.  Fight against this horrible visual injustice.  If nothing is done, we will never see our friends green, or purple, or even red again.  Imagine a world without red people!  It could be right around the corner.  Our whole world will look like this:

AAAAAHHHHHHHH  I can’t take it any more!

Seriously, I weep for cinema of this dark age.  I think twenty years from now people will look at films of this era and say "My God – what were they smoking??!?"

I leave you with this last horrible thought.  What would art history look like if this virus had infected mankind hundreds of years ago?


UPDATE 4.6.10
I couldn’t help but notice this trailer for the new Nightmare on Elm Street:
It seems trailers really push this to extreme levels.
Oh and check out who the producer is…
Posted by Todd Miro at 10:36 PM

Albert Einstein: Plagiarist and Fraud


http://thetruthseeker.co.uk/article.asp?ID=13300
Ian Moseley – Altermedia August 17, 2010

Albert Einstein is today revered as “the Father of Modern Science”. His wrinkled face and wild hair has become a symbol for scientific genius and “his” famous E = mc^2 equation is repeatedly used as the symbol for something scientific and intellectual. And yet there has for years been mounting evidence that this “Father of Modern Science” was nothing but a con man, lying about his ideas and achievements, and stealing the work and the research of others.

The most glaring evidence against Einstein concerns “his” most famous equation. One website notes “The equation E=mc^2, which has been forever linked to Einstein & his Theory of Relativity was not originally published by Einstein. According to Umberto Bartocci, a professor at the University of Perugia and a historian of mathematics, this famous equation was first published by Olinto De Pretto …two years prior to Einstein’s publishing of the equation. In 1903 De Pretto published his equation in the scientific magazine Atte and in 1904 it was republished by the Royal Science Institute of Veneto. Einstein’s research was not published until 1905… Einstein was well versed in Italian and even lived in Northern Italy for a brief time.”

It is unheard of to pass over the original inventor of an equation and to give credit to someone, who claims to have derived it AFTER the equation and its derivation have been published. The equation “E=mc^2″ should be called the “De Pretto Equation” not the “Einstein Equation.”

This raises the question: “What sort of man was Einstein?” Is there evidence that he may have been prone to unethical behavior? One website reports “Einstein… was still far from the ideal husband. A year before they married, Maric gave birth to a daughter, Lieserl, while Einstein was away. The child’s fate is unknown – she is presumed to have been given up for adoption, perhaps under pressure from Einstein, who is thought to have never seen his first born. After the marriage, Mileva bore two sons but the family was not to stay together. Einstein began an affair with his cousin Elsa Lowenthal while on a trip to Berlin in 1912, leaving Mileva and his family two years later. Einstein and Mileva finally divorced in 1919, but not until after Einstein sent his wife a list of ‘conditions’ under which he was willing to remain married. The list included such autocratic demands as ‘You are neither to expect intimacy nor to reproach me in any way’. After the divorce, he saw little of his sons. The elder, Hans Albert, later reflected ‘Probably the only project he ever gave up on was me.’ The younger, Eduard, was diagnosed with schizophrenia and died in an asylum. Einstein married Elsa soon after the divorce, but a few years later began an affair with Betty Neumann, the niece of a friend… Accusations of plagiarism aren’t limited to Mileva – it’s also been claimed that Einstein stole the work of a host of other physicists. One question which may remain moot is quite how much Einstein drew from the work of Hendrik Lorentz and Henri Poincare in formulating the theory of special relativity. Elements of Einstein’s 1905 paper paralleled parts of a 1904 paper by Lorentz and a contemporary paper by Poincare. Although Einstein read earlier papers by the two, he claimed not to have seen these later works before writing the 1905 paper. One apparently damning fact is that the 1905 paper on special relativity had no references, suggesting that Einstein was consciously hiding his tracks.”

One source notes “David Hilbert submitted an article containing the correct field equations for general relativity five days before Einstein.” Another source notes “Einstein presented his paper on November 25, 1915 in Berlin and Hilbert had presented his paper on November 20 in Göttingen. On November 18, Hilbert received a letter from Einstein thanking him for sending him a draft of the treatise Hilbert was to deliver on the 20th. So, in fact, Hilbert had sent a copy of his work at least two weeks in advance to Einstein before either of the two men delivered their lectures, but Einstein did not send Hilbert an advance copy of his.” Apparently Hilbert’s work was soon to become “Einstein’s work.”

The historic record is readily available and the truth is known to many scientists and historians, even if they are afraid to say anything. The idea that light had a finite speed was proven by Michelson and Morley decades before Einstein. Hendrik Lorentz determined the equations showing relativistic time and length contractions which become significant as the speed of light is approached. These gentlemen along with David Hilbert and Olinto De Pretto have been airbrushed out of the picture so that Einstein could be given the credit for what they had done.

Einstein appeared to latch onto his first wife, a much more talented student three years his senior, to compensate for his own limited abilities. Another website notes: “…in 1927, H. Thirring wrote, ‘H. Poincare had already completely solved the problem of time several years before the appearance of Einstein’s first work (1905). . . .’ Sir Edmund Whittaker in his detailed survey, A History of the Theories of Aether and Electricity, Volume II, (1953), included a chapter entitled ‘The Relativity Theory of Poincare and Lorentz’. Whittaker thoroughly documented the development of the theory, documenting the authentic history, and demonstrated through reference to primary sources that Einstein held no priority for the vast majority of the theory. Einstein offered no counter-argument to Whittaker’s famous book. . .”

Einstein was a minor contributor at best and in any case an intellectual thief and pretentious braggart. Einstein was still alive when Whitaker’s book was published and he said NOTHING about it. No libel suit, no refutation, no public comment at all.

Einstein was the first great fraudster and idea-thief in modern science. His theft of Olinto De Pretto’s equation E = mc^2 gave him considerable scientific credibility which he built a career on. De Pretto was not a career physicist and spent his life as an industrialist, passing away in 1921. De Pretto had published his equation twice before Einstein and was no doubt amazed that someone could claim credit for his work. Einstein used and eventually discarded his first wife, Mileva, who was a much more brilliant student than Einstein and is suspected of writing much of Einstein’s early work. (She may have been reluctant to expose Einstein since he was still the father of her children.) David Hilbert’s work on the equations for Special Relativity was submitted for publication before Einstein and was sent to Einstein as correspondence. Einstein claimed credit for the equations which Hilbert derived. (David Hilbert passed away in 1943.)

Some university professors have stolen work from their graduate students and it would be interesting to see if any of Einstein’s students complained of such thievery. A plagiarist seldom stops plagiarizing especially when he keeps getting away with it. Complaints against Einstein however seem to disappear down the Orwellian memory hole. Einstein is clearly a sacred cow to many. A few have even used the word “heresy” to describe serious well-documented criticism and charges of plagiarism against Einstein. The truth eventually wins out and Einstein will someday be best known as a great fraud instead of a great physicist

Vast solar system found 127 light years away

 
A vast solar system of seven planets orbiting a sun-like star has been discovered 127 light years from Earth.

An artist’s impression of the HD 10180 planetary system in the southern constellation of Hydrus 127 light years away


A close up of the region around the star HD 10180

The planetary system is believed to be the largest ever detected beyond the sun.

Astronomers have confirmed the presence of five planets and have tantalising evidence of two more.

The distance of the planets from their parent star follow a regular pattern, similar to that seen in our own solar system.

”We have found what is most likely the system with the most planets yet discovered,” said Dr Christophe Lovis, who led the European southern Observatory (ESO) scientists.

”This remarkable discovery also highlights the fact that we are now entering a new era in exoplanet research: the study of complex planetary systems and not just of individual planets.

”Studies of planetary motions in the new system reveal complex gravitational interactions between the planets and give us insights into the long-term evolution of the system.”

The parent star, known as HD 10180, lies in the southern constellation of Hydrus 127 light years away.

Astronomers patiently studied it for six years using a planet-finding instrument called the HARPS spectrograph, attached to ESO’s 3.6 metre (11.8ft) telescope at La Silla, Chile.

From 190 individual HARPS measurements, they were able to detect tiny wobbles in the star’s motion caused by the gravitational tugs of its planets.

The five strongest signals corresponded to planets with Neptune-like masses, between 13 and 25 times that of the Earth.

These planets, with orbit periods ranging from six to 600 days, are separated from their star at 0.06 to 1.4 times the distance between the Earth and sun.

Dr Lovis added: ”We also have good reasons to believe that two other planets are present. One would be a Saturn-like planet (with a minimum mass of 65 Earth masses) orbiting in 2,200 days. The other would be the least massive exoplanet ever discovered, with a mass of about 1.4 times that of the Earth.

”It is very close to its host star, at just 2 per cent of the Earth-sun distance. One ‘year’ on this planet would last only 1.18 Earth days.”

The planet would be rocky, like the Earth, but probably far too hot to sustain life.

With at least five Neptune-sized planets circling inside an orbit equivalent to that of Mars, the HD 10180 system has a more populated inner region than our solar system.

So far astronomers have found 15 systems containing at least three planets.

The last record holder was 55 Cancri, which has a total of five planets including two gas giants.

The Best High School Valedictorian Speech

August 01, 2010

Written by Erica Goldson

© The Daily Mail
The 2010 Graduating Class of Coxsackie-Athens High School.

Comment: The following speech was delivered by top of the class student Erica Goldson during the graduation ceremony at Coxsackie-Athens High School on June 25, 2010
 
 
 

Here I stand

There is a story of a young, but earnest Zen student who approached his teacher, and asked the Master, “If I work very hard and diligently, how long will it take for me to find Zen? The Master thought about this, then replied, “Ten years . .” ?The student then said, “But what if I work very, very hard and really apply myself to learn fast — How long then?” Replied the Master, “Well, twenty years.” “But, if I really, really work at it, how long then?” asked the student. “Thirty years,” replied the Master. “But, I do not understand,” said the disappointed student. “At each time that I say I will work harder, you say it will take me longer. Why do you say that?” ?Replied the Master, “When you have one eye on the goal, you only have one eye on the path.”

This is the dilemma I’ve faced within the American education system. We are so focused on a goal, whether it be passing a test, or graduating as first in the class. However, in this way, we do not really learn. We do whatever it takes to achieve our original objective.

Some of you may be thinking, “Well, if you pass a test, or become valedictorian, didn’t you learn something? Well, yes, you learned something, but not all that you could have. Perhaps, you only learned how to memorize names, places, and dates to later on forget in order to clear your mind for the next test. School is not all that it can be. Right now, it is a place for most people to determine that their goal is to get out as soon as possible.

I am now accomplishing that goal. I am graduating. I should look at this as a positive experience, especially being at the top of my class. However, in retrospect, I cannot say that I am any more intelligent than my peers. I can attest that I am only the best at doing what I am told and working the system. Yet, here I stand, and I am supposed to be proud that I have completed this period of indoctrination. I will leave in the fall to go on to the next phase expected of me, in order to receive a paper document that certifies that I am capable of work. But I contest that I am a human being, a thinker, an adventurer – not a worker. A worker is someone who is trapped within repetition – a slave of the system set up before him. But now, I have successfully shown that I was the best slave. I did what I was told to the extreme. While others sat in class and doodled to later become great artists, I sat in class to take notes and become a great test-taker. While others would come to class without their homework done because they were reading about an interest of theirs, I never missed an assignment. While others were creating music and writing lyrics, I decided to do extra credit, even though I never needed it. So, I wonder, why did I even want this position? Sure, I earned it, but what will come of it? When I leave educational institutionalism, will I be successful or forever lost? I have no clue about what I want to do with my life; I have no interests because I saw every subject of study as work, and I excelled at every subject just for the purpose of excelling, not learning. And quite frankly, now I’m scared.

John Taylor Gatto, a retired school teacher and activist critical of compulsory schooling, asserts, “We could encourage the best qualities of youthfulness – curiosity, adventure, resilience, the capacity for surprising insight simply by being more flexible about time, texts, and tests, by introducing kids into truly competent adults, and by giving each student what autonomy he or she needs in order to take a risk every now and then. But we don’t do that.” Between these cinderblock walls, we are all expected to be the same. We are trained to ace every standardized test, and those who deviate and see light through a different lens are worthless to the scheme of public education, and therefore viewed with contempt.

H. L. Mencken wrote in The American Mercury for April 1924 that the aim of public education is not “to fill the young of the species with knowledge and awaken their intelligence. … Nothing could be further from the truth. The aim … is simply to reduce as many individuals as possible to the same safe level, to breed and train a standardized citizenry, to put down dissent and originality. That is its aim in the United States.”

Comment: The full passage reads: “The aim of public education is not to spread enlightenment at all; it is simply to reduce as many individuals as possible to the same safe level, to breed and train a standardized citizenry, to down dissent and originality. That is its aim in the United States, whatever pretensions of politicians, pedagogues other such mountebanks, and that is its aim everywhere else.”

To illustrate this idea, doesn’t it perturb you to learn about the idea of “critical thinking.” Is there really such a thing as “uncritically thinking?” To think is to process information in order to form an opinion. But if we are not critical when processing this information, are we really thinking? Or are we mindlessly accepting other opinions as truth?

This was happening to me, and if it wasn’t for the rare occurrence of an avant-garde tenth grade English teacher, Donna Bryan, who allowed me to open my mind and ask questions before accepting textbook doctrine, I would have been doomed. I am now enlightened, but my mind still feels disabled. I must retrain myself and constantly remember how insane this ostensibly sane place really is.

And now here I am in a world guided by fear, a world suppressing the uniqueness that lies inside each of us, a world where we can either acquiesce to the inhuman nonsense of corporatism and materialism or insist on change. We are not enlivened by an educational system that clandestinely sets us up for jobs that could be automated, for work that need not be done, for enslavement without fervency for meaningful achievement. We have no choices in life when money is our motivational force. Our motivational force ought to be passion, but this is lost from the moment we step into a system that trains us, rather than inspires us.

We are more than robotic bookshelves, conditioned to blurt out facts we were taught in school. We are all very special, every human on this planet is so special, so aren’t we all deserving of something better, of using our minds for innovation, rather than memorization, for creativity, rather than futile activity, for rumination rather than stagnation? We are not here to get a degree, to then get a job, so we can consume industry-approved placation after placation. There is more, and more still.

The saddest part is that the majority of students don’t have the opportunity to reflect as I did. The majority of students are put through the same brainwashing techniques in order to create a complacent labor force working in the interests of large corporations and secretive government, and worst of all, they are completely unaware of it. I will never be able to turn back these 18 years. I can’t run away to another country with an education system meant to enlighten rather than condition. This part of my life is over, and I want to make sure that no other child will have his or her potential suppressed by powers meant to exploit and control. We are human beings. We are thinkers, dreamers, explorers, artists, writers, engineers. We are anything we want to be – but only if we have an educational system that supports us rather than holds us down. A tree can grow, but only if its roots are given a healthy foundation.

For those of you out there that must continue to sit in desks and yield to the authoritarian ideologies of instructors, do not be disheartened. You still have the opportunity to stand up, ask questions, be critical, and create your own perspective. Demand a setting that will provide you with intellectual capabilities that allow you to expand your mind instead of directing it. Demand that you be interested in class. Demand that the excuse, “You have to learn this for the test” is not good enough for you. Education is an excellent tool, if used properly, but focus more on learning rather than getting good grades.

For those of you that work within the system that I am condemning, I do not mean to insult; I intend to motivate. You have the power to change the incompetencies of this system. I know that you did not become a teacher or administrator to see your students bored. You cannot accept the authority of the governing bodies that tell you what to teach, how to teach it, and that you will be punished if you do not comply. Our potential is at stake.

For those of you that are now leaving this establishment, I say, do not forget what went on in these classrooms. Do not abandon those that come after you. We are the new future and we are not going to let tradition stand. We will break down the walls of corruption to let a garden of knowledge grow throughout America. Once educated properly, we will have the power to do anything, and best of all, we will only use that power for good, for we will be cultivated and wise. We will not accept anything at face value. We will ask questions, and we will demand truth.

So, here I stand. I am not standing here as valedictorian by myself. I was molded by my environment, by all of my peers who are sitting here watching me. I couldn’t have accomplished this without all of you. It was all of you who truly made me the person I am today. It was all of you who were my competition, yet my backbone. In that way, we are all valedictorians.

I am now supposed to say farewell to this institution, those who maintain it, and those who stand with me and behind me, but I hope this farewell is more of a “see you later” when we are all working together to rear a pedagogic movement. But first, let’s go get those pieces of paper that tell us that we’re smart enough to do so.

Harvard University fund sells all Israel holdings

No reason for the sale was mentioned in the report to the SEC.

Hillel Koren

In another blow to Israeli shares, the Harvard Management Company notified the US Securities and Exchange Commission (SEC) on Friday that it had sold all its holdings in Israeli companies during the second quarter of 2010. No reason for the sale was mentioned. The Harvard Management Company manages Harvard University’s endowment. Harvard Management Company stated in its 13-F Form that it sold 483,590 shares in Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) for $30.5 million; 52,360 shares in NICE Systems Ltd. (Nasdaq: NICE; TASE: NICE) for $1.67 million; 102,940 shares in Check Point Software Technologies Ltd. (Nasdaq: CHKP) for $3.6 million; 32,400 shares in Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) for $1.1 million, and 80,000 Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) shares for $1.8 million.

Harvard Management Company’s 13-F Form shows some interesting investments. Its two largest holdings, each worth $295 million, are in iShares ETFs, one on Chinese equities, and the other on emerging markets. Harvard also owns $181 million in a Brazilian ETF.

Stocks, Housing and Economy, Mass Delusion American Style

Aug 14, 2010 – 01:04 PM

By: James_Quinn

"Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one." – Charles Mackay- Extraordinary Popular Delusions and the Madness of Crowds

The American public thinks they are rugged individualists, who come to conclusions based upon sound reason and a rational thought process. The truth is that the vast majority of Americans act like a herd of cattle or a horde of lemmings. Throughout history there have been many instances of mass delusion. They include the South Sea Company bubble, Mississippi Company bubble, Dutch Tulip bubble, and Salem witch trials. It appears that mass delusion has replaced baseball as the national past-time in America. In the space of the last 15 years the American public have fallen for the three whopper delusions:

  1. Buy stocks for the long run
  2. Homes are always a great investment
  3. Globalization will benefit all Americans

Bill Bonner and Lila Rajiva ponder why people have always acted in a herd like manner in their outstanding book Mobs, Messiahs and Markets:

"Of course, we doubt if many public prescriptions are really intended to solve problems. People certainly believe they are when they propose them. But, like so much of what goes on in a public spectacle, its favorite slogans, too, are delusional – more in the nature of placebos than propositions. People repeat them like Hail Marys because it makes them feel better. Most of our beliefs about the economy – and everything else – are of this nature. They are forms of self medication, superstitious lip service we pay to the powers of the dark, like touching wood….or throwing salt over your shoulder. "Stocks for the long run," "Globalization is good." We repeat slogans to ourselves, because everyone else does. It is not so much bad luck we want to avoid as being on our own. Why it is that losing your life savings should be less painful if you have lost it in the company of one million other losers, we don’t know. But mankind is first of all a herd animal and fears nothing more than not being part of the herd."

Stocks for the Long Run
The book Stocks for the Long Run was written by Jeremy Siegel in the mid-1990’s. The premise is that if you just buy and hold stocks over a 20 to 30 year period, you will always make money. This was exactly what the Wall Street witch doctors ordered. They pounded this message into the brains of every American incessantly in their advertising campaigns, literature and propaganda. It became an unquestioned truth. Just one problem. It isn’t the truth. Valuations matter. The Dow Jones was at the same level in 1982 as it was in 1966. On an inflation adjusted basis, the Dow did not get back to the 1966 level until 1990. That is 24 years of no return in the stock market. The American public ignored the true facts and piled into equities during the late 1990s. The result was one of the greatest examples of mass delusion in history. The internet bubble drove the NASDAQ market to a peak of 5,048 in March 2000. Today it sits at 2,180. Ten years after the bubble burst, the NASDAQ is still down 57% from its peak.

Delusional Americans all over the country believed in the new internet paradigm. Fools thought "bricks and mortar" retailers were dead. Morons quit their jobs so they could get rich day trading. Wall Street hucksters took advantage of this hysteria by attaching .COM to every ridiculous IPO they shilled to the American public. Wall Street knew these companies were pieces of crap, but they churned out the IPOs as quickly as possible while the getting was good. The Wall Street oligarchs made billions and the delusional American public got screwed. You would think that average Americans would have learned their lesson after this experience. They did not. They continued to buy into the Wall Street lies about stocks being a sure path to riches. The fact is that the S&P 500 is currently at the same level it was in March 1998. On an inflation adjusted basis, it is 25% below the level of 1998. You don’t hear this information on CNBC because the oligarchs that control the media need the delusion to continue in order to harvest more riches from the ignorant masses.

Home Sweet Home
“The continuing shortages of housing inventory are driving the price gains. There is no evidence of bubbles popping.” – David Lereah – Chief Economist for National Association of Realtors – 2005

“We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though.” – Ben Bernanke – 2005

“House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals.” – Ben Bernanke – 2005

Why was it that two supposedly brilliant, highly trained economists, with countless degrees and high paying positions could be so very wrong? Were they just mistaken or were they purposefully encouraging a national delusion? With the bursting of the internet bubble in 2000 – 2002, Americans immediately proceeded to the next bubble. Alan Greenspan was an almost God like figure in the early 2000s. He had "saved" the economy countless times during his 15 year reign of terror at the Federal Reserve. When he spoke, the American people listened. After the internet bubble and 9/11, he proceeded to reduce interest rates to 1% for an extended period of time. He then gave the all clear sign to Americans to take out adjustable rate mortgages. Lastly, Mr. Free Markets decided that banks and mortgage brokers could police themselves. The result was the greatest housing bubble in US history and a near collapse of the worldwide financial system.

Sane economists like Robert Shiller saw it for what it was. He calmly pointed out that home prices had pretty much tracked inflation for over 100 years. A 100% increase in home prices over the course of 3 years was irrationally exuberant. He was scorned and ridiculed by the delusion propagators at the NAR, the cheerleaders on CNBC, the Wall Street money changers, the Federal Reserve stuffed suits, and the corrupt politicians in Washington DC. The usual drivel about positive demographics, low interest rates, strong income growth, and limited land to develop were spewed out by the corporate media complex. The beneficiaries of this mass delusion were the Wall Street banks that created mortgage products and derivatives faster than Obama spreads our wealth around.

Mass delusion is always encouraged by those who benefit most from the mass delusion. David Lereah has admitted that he lied about the housing bubble because he was employed by realtors. Realtors made millions in commissions. Appraisers made millions in fees by inflating appraisals. Mortgage brokers made millions by encouraging people to lie on mortgage applications. Wall Street whores made billions by creating toxic packages of mortgages and selling them to Irish nuns, old ladies and clueless municipal administrators. The ratings agencies made hundreds of millions in fees for slapping AAA ratings on toxic derivatives. Politicians got rich from political "contributions" from Fannie Mae, Freddie Mac, Wall Street, and the NAR. Any reasonable human being could look at the chart above and see that this would end badly, but Americans wanted to be deluded. They choose to believe. The housing market has now been falling for five years, with another five years to go. Ben Bernanke has reduced interest rates to zero. I wonder how that will work out.    

Who Benefited from Globalization?

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” – Mark Twain

From the time that Bill Clinton signed the NAFTA agreement in 1994, globalization has been touted by those in power as beneficial to all Americans. How could free markets and free trade be a bad thing? Corporate America, Wall Street, and the mainstream corporate media have blared the propaganda of globalization benefits from their loudspeakers. In theory, globalization appears to be a positive concept. It describes a process by which regional economies, societies, and cultures have become integrated through a global network of communication, transportation, and trade. The truth is that globalization is not inherently good or inherently bad. The idea is that each country has its own strengths and weaknesses. Each country will take advantage of their strengths and rely on other countries to help mitigate their weaknesses. This will result in increased trade, a larger world market, and economic progress for all. One small problem. Trade is not really free. Every country on earth protects various industries. Every country on earth manipulates their currency in order to get an edge. Every country on earth invokes tariffs to protect their national interests.

Bill Bonner and Lila Rajiva address the difficulties of globalization and "free trade" in Mobs, Messiahs and Markets:

"Unfair trade is yet another of the dodgy slogans festooning the spectacle of globalization like tinsel slithering around a pole dancer. How can different regulations and practices in different countries constitute unfairness? Isn’t the essence of trade that different countries have different things to offer – whether cheap labor, or better technology, or more bountiful natural resources, or more welcoming business environments? If all countries had exactly the same things to offer each other, there would be no reason to trade at all. But what "fair" trade advocates are really advocating, of course, is unfair trade! They want to make sure their foreign competitors divest themselves of the very advantages that they bring to trading."

"We notice, for instance, that when Americans in Detroit lose jobs to other Americans in California, they might grumble a bit. But, by and large, they accept it as part of the nature of things. They move, or retrain, or change jobs. But when they lose their jobs to Japanese in Osaka or Indians in Bangalore, then a cry goes up. Unfair trade, howl the trade unions; race to the bottom, scold the social activists; yellow – or brown – peril, shriek the xenophobes and racists."

It seems the American middle class was sold a false bill of goods. They bought the Big Lie that globalization would benefit them. They bought into the delusion that even though their high paying manufacturing jobs sailed away to China and India, they could maintain their lifestyle through brain work, easy credit, cheap goods made in China by the people who took their jobs, and the ever increasing value of their homes. Noam Chomsky notes the fallacy of this delusion:

"The dominant propaganda systems have appropriated the term "globalization" to refer to the specific version of international economic integration that they favor, which privileges the rights of investors and lenders, those of people being incidental."

Again, one must seek out who benefits from the delusion of globalization. The crony capitalists, Wall Street oligarchs, and corporate fascists who control the puppet strings in this country have benefited greatly from the Big Lie. Over 5 million manufacturing jobs have been off-shored since 2000. These good paying jobs are never coming back. Millions of service sector jobs continue to be shipped overseas. The global conglomerates like GE, HP, Oracle, IBM, and Boeing continue to rake in billions of profits, distributing millions to its high paid executives, while gutting middle class America. The ruling oligarchs convinced Americans to take advantage of cheap goods and easy credit, to buy electronics, cars, appliances, new kitchens, and take the vacations of their dreams. This Big Lie has left the American consumer with $2.5 trillion of non-mortgage debt and the lowest level of home equity in history. Retailers like Wal-Mart, Target, Home Depot, and Best Buy reaped billions in profits as Americans whipped out one of their 10 credit cards to buy HDTV’s, economy bags of tube socks, iPads, iPods, stainless steel refrigerators, and Dell computers. Small town America’s mom and pop economy was gutted by Big Box retailers selling the globalization delusion. The biggest beneficiaries of the globalization delusion were the Wall Street banks. They control 80% of credit card market and have reaped billions in interest at rates exceeding 20%, while sucking $20 billion per year in late fees from the clueless public. Wall Street bankers have rewarded themselves for their brilliance in destroying the middle class by reaping multi-million dollar bonus packages.

Vincible Ignorance

“Most ignorance is vincible ignorance. We don’t know because we don’t want to know.” – Aldous Huxley

Based on all available evidence, it seems the American public wants to be misled. They have chosen ignorance over knowledge and understanding. They want to believe their corrupt leaders. They want to believe that things always work out in the long run. They want to believe that the economy is about to get better. They don’t want to think about unsustainable debt, unfunded liabilities, saving for retirement, or Simon Cowell leaving American Idol. Americans desperately want to be deluded into another bubble, but there are no evident bubbles left to blow. The existing American delusion is that the current fiscal path will not lead to the utter destruction of our once great Republic.


  
America resembles a 40 year old aging baseball icon with two bad knees, a pot belly, receding hairline and delusions that he is still the ball player he was at 24. He doesn’t realize that his skills are shot, as he flails at curveballs in the dirt thrown by 21 year old kids. The rest of the league knows he is washed up, but he refuses to accept reality. America isn’t even running on fumes at this point. It is running on delusions. Politicians think they have saved the country from a Depression by adding $3 trillion to the National Debt and allowing Wall Street banks to pretend they are solvent. Americans have been deluded by the ruling oligarchs that a $700 billion bank bailout, an $800 billion pork filled stimulus plan, the Federal Reserve buying $1.2 trillion of toxic mortgages, and the Treasury forcing taxpayers to pick up a $400 billion tab for Fannie Mae and Freddie Mac’s bad loans has actually solved a problem created by too much debt.
The American herd has gone mad. A few people have regained their senses, but the vast majority still exhibits the behavior of sheep being led to slaughter. The ruling oligarchs have utter contempt for the average American, but they fear the masses. In order to retain their power and wealth, they gladly hand out two years of unemployment payments, food stamps, and welfare payments to keep the masses sedated. The working middle class foots the bill. Corruption abounds and is sustained by the passage of more laws and regulations. The sociopathic powers that control the levers of power in this country need to be brought to justice if this country has any chance at survival. The den of vipers and thieves have trampled on the Constitution, speculated with the country’s funds, risked blowing up the financial system, committed fraud on a massive scale, and continue to rape and pillage the American citizens. Vincible ignorance by the American people is no longer a legitimate excuse. The criminals on Wall Street and Washington DC must be routed out and Americans must awaken from their delusional state before it is too late. I weep for the liberty of my country. 

And you run and you run to catch up with the sun, but it’s sinking
Racing around to come up behind you again
The sun is the same in a relative way, but you’re older
Shorter of breath and one day closer to death

                                          Pink Floyd – Time

Join me at www.TheBurningPlatform.com to discuss truth and the future of our country.

By James Quinn

quinnadvisors@comcast.net

James Quinn is a senior director of strategic planning for a major university. James has held financial positions with a retailer, homebuilder and university in his 22-year career. Those positions included treasurer, controller, and head of strategic planning. He is married with three boys and is writing these articles because he cares about their future. He earned a BS in accounting from Drexel University and an MBA from Villanova University. He is a certified public accountant and a certified cash manager.

As The Economic Team Bails, The System Fails To Create Jobs (Again)

AS THE OBAMA ECONOMIC TEAM BAILS, THE SYSTEM FAILS TO GENERATE JOBS. ARE THE CAUSES, UM, "STRUCTURAL?"
By Danny Schechter

In Washington, the Obama economic team has sprung a leak. First, Budget Director Peter Orszag, the calculating numbers savant, bailed. And now, "distinguished" economist Christina Romer, the only woman in that inner circle boys club has quit too. (Would you want to be around Larry Summers all day long?)

Why this crew of losers wasn’t fired eludes me despite their claims of having prevented a worst collapse. No doubt, they know more than they are saying, and, perhaps, now that they are no longer selling, they may be willing to do some telling on just how bad it is and what went wrong.

Who’s next? Could Ben Bernanke be leaving the Fed for Fed-Ex?

Economist Max Wolfe has none of the political restraints of power. At the news of another 131, 000 jobs gone, at all the talk of permanent unemployment as the "new normal," he sighed with a tinge of optimism:

"We have been in the present labor market swoon since December 2007. We are 30 months into the process. Nearly everything is not getting worse fast. Most economic indicators have seen slow, uneven progress. We are a weary nation and hope, is running low. All lethality is dosage and we have received a massive dosage- an overdose- of bad economic news since the winter of 2007. Things are getting ever so slightly less bad in the aggregate.

"The sheriffs of this rough economic neighborhood are running low and out of ammunition. The populace is fed up. Our Sheriffs are The Treasury and The Fed and they have spent, cut taxes, slashed rates, bought securities and ballooned their balance sheets. They have made the bad less worse, but not appreciable better enough for many. All that economic toxin still pumps the blood of this economy. Now, the state is having a contractionary direct impact on employment."

"Contractionary? I am a first-time contractionary word user so I will leave it to Stephen Colbert to take that term apart, but it can’t be a good thing.

The bigger surprise is being buried. The more serious problem is more systemic and rooted in the structure of our economy. These structural problems used to be referenced to show how deep the rot goes and why more fundamental reforms are needed, but now, as Paul Krugman has argued, this very idea is now being used to encourage acceptance of the problems because they are beyond repair, as in, "we can’t change that because it is, so, um, "structural!") Thus, the existing power relations can’t be questioned because they are the existing power relations

Makes sense, doesn’t it?

Part of the problem is that while the livelihoods of workers and homeowners are sinking, the economic and political elite is doing just fine, as the Automatic Earth Website explains:

"Perhaps what we witness is an ongoing and deepening chasm that divides the world of finance and politics on the one hand and the world of everyday people on the other, as Rasmussen Reports indicates: 67% of Political Class Say U.S. Heading in Right Direction, 84% of Mainstream Disagrees. This chasm was greatly facilitated by governments relying on policies based on the notion that too-big-to-fail -financial- institutions needed to be bailed out at any cost. Later in the year, as a direct consequence of these policies, we will see another round of insane banker and trader bonuses, just as citizens’ sentiments and incomes fall, and unemployment and poverty keep rising."

When you create and enable a casino economy, the public becomes a player too, taking risks they shouldn’t at the behest of bankers and finance companies who assure them all is fine.

Last week, Countrywide, the country’s mortgage fraud factory, reached a settlement with the SEC for more than Goldman Sachs settled its last complaint for a whopping $600 million. Their shark-in-chief, Anthony Mozillo, still facing a criminal investigation, later said he was pleased when the federal regulators admitted that the investors were not defrauded, because they knew what kind of projects they were funding. How reassuring!

So the circle of complicity widens. We now learn that the companies and individuals that invested in the subprime/subcrime mortgages KNEW people were being ripped off but did it anyway because there was so much money to be made.

And because security laws only protect investors, who were defrauded, many have no case. What about the borrowers, the homeowners now facing foreclosure? They are apparently not worthy of protection. This is comparable to the Madoff investors who profited in his illegal scheme and knew his returns were too good to be true but shoveled money to him anyway. They became partners in the ponzi, not just "victims" trying to be made whole.

Is anything changing? The banks say they will not change the way they finance mortgages so it is still buyer beware. The Wall Street Journal reports another instant crash of the markets is possible. And General Motors that was down and on the way out is back thanks to the government’s largesse but sniping at its rescuers, insisting an end to government ownership would be good for their image and "employee morale." Huh?

"We want the government out period," blusters GM’s ungrateful CEO Edward E. Whitacre Jr. This same company recently spent $3.5 billion buying a new subprime lending company to replace GMAC, the GM lender whose bad loans sunk GM. On top of that, these geniuses just produced The Volt electric car that sells for $40,000, hardly a brilliant move in this economy. Of course they blame all their problems on the government, never themselves.

Like so many others, they seem to be banging on Obama, everyone’s target of choice. If that’s your inclination, let’s blame him also for what he has not done.

He hasn’t led a consistent push back against Wall Street, perhaps because he hopes in vain that big business will create private sector jobs and wants to show naysayers how pro-business he really is. This has turned him into an inversion of FDR.

As Ezra Klein of the Washington Post observed: "The reality is that America’s supposedly anti-business president has led an extremely pro-business recovery.

Businesses are sitting on about $2 trillion in cash reserves. Business spending jumped 20 percent last quarter, and is up by 13 percent against 2009. The Obama administration has dropped taxes for small businesses and big ones alike."

So much for that canard.

Is there anything to be done? There is no shortage of proposals for jobs programs and taxes on transactions, for tougher rules on derivatives, and imposed compensation limits. In most cases the US, with pressure from Wall Street and its political allies, has opted for easily maneuvered around and malleable regulations.

One small reform has been proposed by the much-maligned Ralph Nader for those of us who live in the appropriately named "Empire State, " one that currently shelters a Wall Street where hedge fund managers make billions.

Nader notes, "Low-moderate and middle-income New Yorkers already pay a higher percentage of family income in state and local taxes than do the richest one percent of New Yorkers!

Surprisingly, there is a simple way to eliminate the state deficit and
prevent tens of thousands of layoffs and large service cutbacks.

What most New Yorkers do not know is that for about a century there has been a state stock transfer tax on purchases of securities. This year, this tax, similar to ones imposed in 30 other countries, will amount to about $16 billion. Amazingly, since 1979, this tax has been instantly rebated by New York State back to the brokers or clearinghouses who paid it. A 100% rebate every year for the bailed out industry that caused the recession and its immense human damage."

Putting a stop this sleazy practice could be as important in phasing out the Bush tax cuts but so far it’s not on anyone’s agenda, Dems, Repugs or Media.

Maybe because they think of it as "structural."

News Dissector Danny Schechter made Plunder The Crime of Our Time, a DVD and companion book on the financial crisis as a crime story. (Plunderthecrimeofourtime.com Comments to Dissecto@mediachannel,org

Economic Disaster in Progress!

Disaster in progress


By The Mogambo Guru

Hossein Askari is a professor of international business and international affairs at George Washington University, and Noureddine Krichene is an economist with a PhD from UCLA, which I mention to establish their credentials, since some bozo from the Federal Reserve created a stir when he said, with a sniff of condescension and smugness, that nobody should comment about economics unless they have a PhD in economics from a "proper" university, because we unwashed huddled masses are "dangerous" and a "threat to society".

He says this because, see, we drooling lay persons are all too, too stupid to comprehend something that is actually simplicity itself: when the supply of money grows faster than the stock of goods and services, the money will diffuse through the stock of goods and services with the result of higher prices for goods and services.

Seems simple to me! But then I am not a Federal Reserve hotshot with a PhD in economics from an "acceptable" university to wave in anyone’s face, and neither do I subscribe to the idiotic neo-Keynesian econometric crapola that fascinates the Federal Reserve and mainstream academia, a theoretical monstrosity which has resulted in the horrific economic mess we are in, and from which there is, alas, no escape.

In fact, I am absolutely sure that there is No Freaking Way (NFW) to prevent the collapse, being, as it is, just the collapse of yet another of history’s dismal experiments with boom economies built on fiat money and huge debts, because if there WAS a way out of the mess caused by too much money and too much government spending, then there would be no such thing as economics!

I mean, if there was a Mysterious Magical Way (MMW) to painlessly erase all debts and liabilities, then everyone could always spend as much as they liked! And people would always say, "Party on, dudes!" And verily they would party on, because when things finally got really bad and everyone is choking on their debts, the government could wave the MMW wand and make all the bad things go away and life would be wonderful again!

I am, personally, like all economists, secretly looking for that MMW because then I would be forever famous! Famous! And maybe people would like me! And maybe I could get a better job than the crummy one I have now! And maybe people wouldn’t call me "idiot" and "lunatic" all the time!

Askari and Krichene don’t actually call me an idiot or a lunatic, or even refer to me at all, but they do seem to note that everybody is looking for that MMW, to painlessly erase all debts and liabilities, in their essay on atimes.com titled "The Volcker-Bernanke puzzle" (Asia Times Online, July 30, 2010).

They, unfortunately, start right out with a glaring need for some Serious Mogambo Editing (SME) when they write, "Assuming Fed chairman Ben Bernanke succeeds in reverting the US economy to full employment and rapid growth", which my keen editor’s eye clearly sees should more correctly say, "If, against all odds, common sense and 4,500 years of history, clueless Fed chairman Ben Bernanke actually succeeds in reverting the US economy to full employment and rapid growth, then it will truly be a miracle, especially since The Fabulous Mogambo (TFM) just spent several introductory paragraphs saying it was freaking impossible."

They ignored my editing suggestion, and went on to write that, in the aftermath of such a miracle, "then economic historians will be facing a difficult puzzle that could be coined the Volcker-Bernanke puzzle".

So there is going to be a puzzle! I love puzzles! I especially like those big wooden puzzles that only have four pieces, with little handles on each one, and when you finally get all the pieces in place, it makes a picture of a duck or a dog or a sailboat!

I love these puzzles because they don’t take long, and so you can soon get back to doing important things, like writing hate mail to the Federal Reserve ("Dear Monetary Halfwits, I hate you because you have been so consistently wrong about everything and now we are freaking doomed with your stupid expansion of the money supply!")

Alas, it was not to be that kind of puzzle. Instead, they are referring to the paradox that exists by first noting, "Paul Volcker, Fed chairman from August 1979 to August 1987, got the US economy out of 11-12% unemployment by pushing money market rates to 19%."

The paradox comes in when comparing the actions of Bernanke, Fed chairman since 2006, who "pushed unemployment from 4% to 10% through aggressive monetary policy with near-zero interest rates, massive monetary injection, and buying all toxic bank loans."

Well, as far as puzzles go, I guess university professors get a big yuck out of these kinds of intellectual puzzles, but I admit that I am just a dumb guy who doesn’t get it. I just don’t.

They helpfully try to help me see the humor when they explain, "Somehow, either extreme, very tight or very loose monetary, could be followed by policymakers to solve the unemployment problem and propel the economy back to prosperity. It makes no difference which extreme is adopted!"

I admit that it does seem somehow funnier when they explain this puzzling paradox thing, but I’m not sure.

I am sure, however, that deep down inside me there is a cynical, paranoid part of me that interprets the joke as a reminder to buy as much gold, silver and oil as you can, which will protect you against the terrifying and economy-rending inflation in prices that is sure to come as a result of such insane over-creation of new money by the Federal Reserve and the equally-insane borrowing-and-spending by the Obama administration, which is not really funny, either.

Or maybe the joke of the puzzle is that while others are whining and crying that everything is in ruins and all their wealth is gone, eaten up by losses, inflation and taxes, those who buy gold, silver and oil will be grinning goofily with gratifying glee and gluttonous greed that, "Whee! This investing stuff was easy!"

Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter – an avocational exercise to heap disrespect on those who desperately deserve it.

An AUTOPSY of the BP Gulf Oil Well at the Macondo Prospect

 

Many have been asking about the current state of the previously gushing BP Oil Well at the Macondo Prospect in the Gulf of Mexico. The following questions have been coming fast and furiously since the well was capped.

Is it still leaking at the wellhead? Has the wellhead been pierced? Are there other wells leaking in the region?

Are there methane seeps in the area around the well? Are there other leaks in the area coming from this well?

Has the well been breached? Is it beyond repair? How deep are the leaks and breaches?

Has the well-casing been compromised? Has the well-bore lost its integrity? Did the methane explosion undermine the foundation of the wellhead?

Why was the cementing plan not executed according to industry SOP’s? Has the pressure (high psi) forced effluent through cracks and fissures in the cement?

Is BP considering a nuclear option?! Are the relief wells about this? If so, what are the potential consequences should BP execute such a plan?

What is the purpose of the upcoming top kill operation by BP, and will it work? What is the likelihood of success of the relief wells?

What are the prospects of this well ever being permanently sealed? Should BP have ever drilled this well in the first place? Why has so much gone wrong with the entire process of drilling, and then capping this seemingly untamable oil gusher?

For the first time we have received a pictorial rendition of what may have occurred over the several stages of developing the Macondo Prospect oil well. Full credit goes to BK Lim for publishing these revealing diagrams on alternative news websites. It is quite consistent with reports and assessments that we have received over the past three and a half months since the sinking of the Deepwater Horizon.

Again, we express our deepest gratitude to BK Lim for these diagrammatic portrayals of the well gone bad at the Macondo Prospect.

Dr. Tom Termotto, BCIM
National Coordinator
Gulf Oil Spill Remediation Conference (International Citizens’ Initiative)

Tallahassee, FL
OilSpillSolution@comcast.net
http://oilspillsolutionsnow.org/
SKYPE: Gulf_Advocate

Diagrammatic Illustration of BP’s Deepwater Horizon Blowout

By BK Lim

http://bklim.newsvine.com/_news/2010/07/30/4781973-why-is-bps-macondo-blowout-so-disastrous-beyond-patch-up-


















All diagrams created by BK LIM