Read it and Weep

If at first you don't succeed, failure may be your style.
-- Quentin Crisp

What is amazing about the BP leak, assuming that the rock formation above the pool of oil beneath is intact and not also leaking from numerous locations, is the fact that little has been said about one aspect of how this happened.
The Cheney connection (Halliburton) to the oil business runs deep, as does the Bush family cash.
As the wildlife die, along with the ecosystems that are about to turn the Gulf into the new Dead Sea, remember that the $600,000 system which is required in Europe – but was excused here by that dynamic duo of legal crime – is the acoustic shutoff system for the blowout preventer.
Avoiding that price tag was a much-appreciated gift from Cheney and is directly attributed to his allowing rigs drilled in the U.S. to save that expense. Voila, environmental disaster.
As one commenter on Marketplace.com said:

"I practiced law before federal energy agencies for over 25 years... here is what happened.. George W. Bush appointed hand-picked oil and natural gas friendly and environmentally unfriendly cronies to the commissions/agencies (FERC/DOT/MMS, etc.) so that the oil and natural gas industry could do whatever it wanted to do.. I actually saw it happen... it used to be that the agencies were tough and required compliance - there were regular rate cases to make sure the big monopolistic pipelines weren't overcharging the public, investigations to make sure the pipes weren't violating safety and environmental regulations, etc. etc. Then, after W put his cronies in place, everything changed... no rate cases (allowing the big pipes to overrecover cost of service by hundreds and hundreds of millions of dollars from regular consumers like you and me); no checks on pipeline safety and environmental reports (which would uncover fraud); investigations into tariff violations blocked by commissioners (while the pipe presidents bragged about their "Commissioner Shields"); lawyers that tried to ensure management complied with rules fired; etc.,etc.... All of this was triggered by the oil and gas industry executives' desire to rob bigger and bigger bonuses from shareholders... remember those earning incentive clauses in their contracts!! Say what you will - -the truth is the truth..."


It has been estimated that this Gulf disaster is the equivalent of one Exxon Valdez spill, per week.

And, wait until Hurricane season!
Florida may be the tar ball capital of the world if, as is predicted, the plume (which stretches for 30 miles, 400 feet thick and several miles wide) continues to grow by upwards of 80,000 barrels of oil per day.
That’s nearly 3.5 million gallons of oil, per day. All headed towards Florida and wrapping around both coasts and on its way to the Carolinas. The Hamptons may be able to set fire to the waves next 4th of July.
And, there may be "fire sales" for beachfront property in Southampton if the plume makes a sharp left unexpectedly.

And, Palm Beach anyone? Madoff got out of town just in time.

Now, with Albany underwater by $10-15B, California desperate for $40B, Florida hinting that this BP thing will cost them $60B in lost tourism – Municipal Bonds about to tank (Warren Buffet) -- the Eurozone in disaster mode – and the Stock Market starting to resemble 1932 when the big drop occurred -- did anyone read Depression 2.0?

Villages and Counties are going to RAISE taxes. All of this while their bonds are in danger of defaulting. And, the Feds are going to print more money to give to States to keep them alive. Meanwhile, we continue to lose jobs and small businesses are being hounded out of existence by State workers trying to hold onto their jobs by taking in money in by any means necessary (fines, taxes, assessments, code violation fees) before they lose their jobs and their pensions are cut.

The piece de resistance was Governor Paterson’s decision to borrow money from the State pension – in order to pay the current obligations for THE PENSION. In New York, the only state that has this, taxpayers must guarantee the pension of civil service workers! While many states are rolling back pensions and obligations, New York simply borrows from Peter to pay Paul to pay Mary.

Makes you wonder when Alice will smash the mirror once getting through to the other side. It seems saner there.

Chapter 9

Spare no expense to save money on this one.

-- Samuel Goldwyn (1882 - 1974)
Coming to a bookstore near you?
No, actually, it’s a Bankruptcy Code for Villages, Towns and other Municipal entities that allows for reorganization because they cannot pay their debts. And, if Warren Buffett is right, it’s just around the corner for many local governments. Only $14 Billion has defaulted thus far, but the cost of Credit Default Swap insurance is rising rapidly on these bonds.

It’s a version of Russian Roulette that begets the question: do we bite the bullet now and reign in our expenses and employment structure, or do we throw caution to the wind and hope that Washington will bail us out? The other, more popular option for many local governments, to raise taxes, would create a new housing downdraft and the much-feared'double-dip.' The results of increased property taxes during the tail end of this Great Recession could easily force us into Depression 2.0, which some economists believe will hit this Fall. Housing and employment are shaky and even the now expired tax credit has had limited effects. The mid-range properties (condos in Manhattan and second homes in the Hamptons costing from $750,000 to $1.5 million) are not helped by $8,000.
No one wants to tighten their belt. And, that includes the local governments who would rather pass on the bill for keeping municipal employees at work and continues local building projects.

Watch for the vacant chair once the music stops.