Politics and Economics - Sept 15
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Many more articles are available through the Energy Bulletin homepage
IMF: risk of global crash is increasing
Philip Thornton, The Independent
Financial markets have failed to price in the risk that any one of a host of threats to economic stability could materialise and deliver a massive shock to the world economy, the International Monetary Fund warned yesterday.
The world's chief financial watchdog said the financial system had so far proved resilient in the face of recent price falls but warned the risk of a crash had increased. And when it comes to worrying about a crash in the financial markets that could deliver a body blow to the world economy, it seems that all roads lead to the US.
The IMF highlighted five major risks, all but one of which can be attributed to a greater or lesser extent to the economy and foreign policies of the US administration. Not that the politically savvy IMF phrases it exactly like that.
Its message coincided with a stark warning from HSBC, one of the world's largest investment banks, that it had put the US on alert for "recession risk".
(13 Sept 2006)
Similar article at International Herald Tribune.
Java-Bali electricity supply reduced
Muhammad Fasabeni, Tempo (Indonesia)
Jakarta: PT PLN (Persero), the state electricity company, has reduced its electricity supply for the Java-Bali system to 300 megawatts, or half of its initial capacity.
The reason for this is that oil usage during the first half of this year was already 56 percent of the stipulated quota of around 9.2 million kilo liters that the government stipulated.
Muljo Adji, the General Manager of Provisioning and Center for Java and Bali Load Controller, has said that electricity supply is being reduced to alleviate the usage of oil-based fuels.
“Instead of blacking out customers' electricity, we have reduced the supply as of late August of this year,” he said today in Jakarta. ..
(11 Sept 2006)
America's unreal estate problem
Max Fraad Wolff, Asia Times
American "castles" (homes) are middle-class walls of separation from poverty and want. As goes the house, so goes the family's ability to fend off tough times and leverage past wealth for new opportunities. ..
During the first quarter, the median ratio of old-to-new interest rates was 0.98, which means that one-half of US borrowers who were refinancing mortgages ended up with a new loan with a rate that was 2% higher than the old rate. 
Thus refinancing is clearly driven by the need for cash from appreciated housing more than rate changes, which should be a discouraging sign. Such refinancing reached record levels across the first quarters of 2006 and accounted for just under half of the mortgages owned by Freddie Mac (the Federal Home Mortgage Corp). Seventeen consecutive interest-rate hikes were no match for the needs and wants of US homeowners. ..
(9 Sept 2006)
The Valley of the Shadow of Debt
Carolyn Baker, From The Wilderness
In a recent conversation with a friend, a married mother of three, she anxiously confided that although she has never been scared about money in her entire adult life, she now, in her mid-forties, finds herself feeling terrified. “Sometimes I wonder,” she said tentatively, “if it’s our own fault or if it’s the world we now live in. I’ve never worked harder in my life, but I’ve never found myself and my family falling so far behind financially.”
Readers of From The Wilderness and the writings of Catherine Austin Fitts are no doubt hearing similar anguish issuing from the mouths of friends and family, and in all likelihood, thinking similar thoughts, but they know that the frightening quagmire of debt in which millions of Americans are entrenched is not predominantly about frivolous over-consumption or latte-induced destitution. Here are some very sobering statistics1. My intention is not to bore you with them, but to offer a reality check
(11 Aug 2006, but apparently just released for public viewing)
Also just released at FTW: The Global Elite Abandon The Neo-cons.
Ford announces plan to axe 14,000 jobs
Mark Tran, The Guardian
The stricken US car giant Ford today unveiled plans to slash its salaried staff by 14,000 - one-third of the salaried workforce. The second biggest car company in the US also said it would offer early retirement to its entire 75,000-strong US hourly workforce.
The company's third restructuring in five years replaces the initial Way Forward plan, announced in January, which called for the cutting of up to 30,000 jobs and the closure of 14 plants by 2012. ..
(15 Sept 2006)
Gulf oil find won't alter prices now
Matt Kempner, Cox News Service/Detroit News
How should consumers plug the news into their energy consumption decisions? Here's what some petroleum watchers have to say about the discovery's impact on American consumers. ..
Q . Will the Chevron find push oil prices down years from now when the field is producing?
A . "This find alone isn't going to make any difference to prices," [said Adam Sieminski, economist at Deutsche Bank]. "It's a combination of this one and the next one and the next one."
Q . Given the prospects for big oil reserves in the Gulf, is it worthwhile for consumers to find ways to cut their energy use, perhaps buying hybrid cars or smaller traditional vehicles?
A. Sieminski said he doesn't think news of the Chevron find should factor into those consumer decisions. "There are probably lots of good reasons why consumers and drivers ought to be considering those things anyway. The risk of higher prices is still real."
(11 Sept 2006)
Contributor Ken Clark writes: The initial giddy rush on this discovery seems to be wearing off. This story even gets many of the details right.
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