Guest Post: US Midwest Hit By Perfect Gasoline Storm


Submitted by Daniel Graeber of OilPrice.com,

 

Retail gasoline prices in the U.S. Midwest were as much as 50 cents higher than in the rest of the country. By Monday, the price of a gallon of regular unleaded jumped 13 cents from last week in Detroit to settle at $3.99.  The spike in retail gasoline prices follows a series of pipeline spills in Wisconsin and refinery shutdowns in Chicago and elsewhere. The impact of the string of industrial incidents on consumers in the region may be short-lived, but retail prices rarely decline as fast as they increase.
 
The American Automobile Association, in its daily gasoline report, states a gallon of regular unleaded gasoline in Detroit cost $4.05, up from the $3.69 average just one week ago. Chicago drivers, meanwhile, were paying on average $4.39 per gallon, a 10 percent increase from last week. According to AAA, the national average for a gallon of regular unleaded is $3.62.  While that’s a far cry from the national spikes early this year, the regional blow has irked many area residents wary of high consumer prices and pipeline incidents.
 
An industry analyst said much of the region was hit by “a cluster of bad luck.” Last month, pipeline company Enbridge reported a leak on a pipeline in Wisconsin. A section of the Lakehead oil pipeline system ruptured there, cutting off oil supplies to Chicago-area refineries. U.S. Transportation Secretary Ray Lahood said the incident was “absolutely unacceptable” and forced Enbridge to keep the line closed until authorities review a restart plan for the entire 467-mile pipeline.
 
In Michigan, the state’s governor last month issued a fuel emergency in response to the rupture of pipeline that released 1,000 barrels of unleaded gasoline in eastern Wisconsin. Gov. Rick Snyder’s emergency declaration lifted the restrictions placed on long-haul truckers so they could deliver retail petroleum products. Less than two weeks later, Enbridge confirmed that 1,200 barrels of oil spilled from Line 14 in central Wisconsin. A nearby resident said the pipeline “blew like an oil well.”
 
Enbridge maintains that “better than 99.999 percent” of the time, there are no problems with its vast network of oil pipelines in the United States. When accidents do happen, however, they’re costly. Last year’s oil spill in Michigan, on the same network as the Wisconsin leak, was the costliest onshore incident in U.S. history and EPA authorities are still reporting sheen in some of the waterways soiled by the release. Refineries, meanwhile, have shut down at a time when the region is using “summertime gasoline,” a blend not manufactured very much outside of the Midwest.
 
Patrick DeHaan, a petroleum analyst at reporting Web site gasbuddy.com, told a Chicago newspaper that the regional spike in gasoline prices is temporary and likely “the last hiccup” for the summer. Nevertheless, gasoline prices rarely experience a 10 percent decline overnight.
 
“As we all know, (retail prices) only move down by pennies per day,” he said.

Powered by WPeMatico

On Wall Street Crime Pays – A 350% IRR To Be Exact


Previously we showed that when it comes to Wall Street’s returns, the 8% market return benchmark that every first year analyst finds in Ibbotson’s is for naive amateurs. With corporate lobbying returning anywhere between 5,900% and 77,500%, the real money is to be made in the buying and selling of politicians. Yet in our day and age, when information propagates rapidly and when political muppets can be exposed for the Wall Street purchased frauds they are, lobbying is getting increasingly more complicated. Which leaves one other high returning “investment“, which unlike lobbying is completely riskless when one is a Wall Street firm: crime. But not just any crime, the type of crime where a firm settles “without admitting or denying guilt” and in the process is slapped with a fine that barely covers the government’s legal fees. Case in point: U.S. v. Morgan Stanley, U.S. District Court, Southern District of New York Case #11-6875, where MS was punished with the epic disgorgement penalty of $4.8 million. Of course, the fact that Morgan Stanley, who did not admit wrongdoing, generated profits of $21.6 million, is merely a triviality. But a useful one: it allows to calculate that on Wall Street crime does pay, and the IRR is in give or take 350%.

This is what happened:

Morgan Stanley (MS) won approval of a $4.8 million accord with the U.S. over claims it helped manipulate electricity prices, in what the Justice Department called its first effort to get disgorgement from a financial firm that used derivatives to aid anticompetitive behavior.

 

In accepting the agreement, U.S. District Judge William Pauley in Manhattan turned aside complaints from a not-for- profit organization that Morgan Stanley didn’t admit wrongdoing. Pauley, citing the Justice Department, said the case marks the first time the government filed an antitrust suit against a financial firm involving derivative agreements.

 

Disgorgement of $4.8 million is a relatively mild sanction,” Pauley wrote. “But despite this court’s misgivings, the government’s decision to settle for less than full damages is entitled to judicial deference, particularly in view of the novelty of the government’s theory.”

The ever efficient US government did such a bang up job it could not even get Morgan Stanley to admit guilt. But at least it paid up… a full 25% of what it made in profit as a result of the crime:

Critics of the settlement sought an admission of wrongdoing by Morgan Stanley and said the New York- based firm should have been required to pay the full $21.6 million it earned to settle claims it aided efforts by Brooklyn, New York-based KeySpan Corp. to manipulate electricity prices.

Of course, by now a red light should be going off at the memory of a firm caught manipulating electricity prices and using any and all Wall Street inspired derivatives at its disposal to engage in anti-competitive behavior. The memory of course is of a firm called Enron, which promptly liquidated after being crucified in a court of public law. Naturally, when it comes to Wall Street corporations, which by now are fully in control not only of the legislative but the judicial branches, the best one can hope for is that the profit said firm makes at the final ruling is not enough to cover the deal team’s bonus… assuming 1,000,000% inflation.

As for the punchline:

This settlement should send a message to the financial services community that the antitrust division will vigorously pursue anyone who engages in anticompetitive conduct in the derivatives industry,” Gina Talamona, a Justice Department spokeswoman, said in an e-mail statement.

It is unclear if the proper response to this idiotic statement is crying or laughter.

Powered by WPeMatico

Europe's Scariest Chart In More Detail


While the surging unemployment rates across Europe are the most troublesome for politicians (and the extreme youth unemployment even more so), if we take a closer and more ‘local’ view of the stress, it is interestingly more regional than national. While Spain and Greece stand out, the unemployment rate, as analyzed in the chart below by Flute Thoughts blog, does not follow national borders. Northern Italy, for example, seems to have more in common with the German-speaking regions of Europe than with Southern Italy; France appears more peripheral than core; and the former eastern Germany still has not caught up with the west (so much for fiscal integration). Eastern Europe also has some striking differences as we suspect the ovals are slowly collapsing in on themselves as the reality of lower revenues from more unemployed procyclically pulls the euro-zone into depression.

 

 

Via Flute Thoughts: The European Unemployment Map

Yesterday I compared Italy and Spain, and noted that when it comes to unemployment the worst regions in Italy have roughly the same unemployment rate as the best regions in Spain. This led me on to making this map (using data from Eurostat) to show unemployment rates for all EU and EES regions

 

The map gives some hints about where there might be problems – the unemployed who have debts have more difficulties keeping up with their loan payments – the unemployed don’t pay very much in taxes and thus don’t contribute to the government coffers – the unemployed are rather more prone to engage in activities such as social unrest.

 

The biggest problem is obviously in Spain, which stands out like a sore thumb! Greece has nearly the same level of unemployment, but Spain is much larger. Add to this the fact that the Spaniards are up to their ears in debt after the popping of their monumental real estate bubble…

 

It’s also interesting to see how unemployment often does not follow national borders. Northern Italy, for example, seems to have more in common with the German-speaking area of Europe than with southern Italy. Sometimes, however, the national borders make a big difference, e.g. between Spain and Portugal.

 

Also note that France look a lot more like the central part of Italy than it looks like Germany when it comes to unemployment. Bienvenue au club PIIGSF, monsieur Hollande!

 

The difference in Germany between former East Germany and West Germany is still clearly visible, as the east still hasn’t caught up with the west.

 

Another striking difference is that between Czechia and Slovakia, where Czechia looks like Germany, but Slovakia (except the Brno region) has a high unemployment rate that increases towards the east.

Powered by WPeMatico

Guest Post: US Government Proposes Law Making It Illegal For Them To Kill You


Submitted by Simon Black of Sovereign Man blog,

Last Friday, US Congressman Dennis Kucinich introduced HR 6357, a bill which aims to ‘prohibit the extrajudicial killing of United States citizens’ by the federal government. In other words, in the Land of the Free, they need to pass a law to prevent the government from indiscriminately murdering its own citizens.

Now if this doesn’t give one reason to pause and consider the distortions of liberty that have taken place in western civilization, I don’t know what will. Think about it:

  • Does a free society send government hit men to eliminate anyone they perceive to be an enemy of the state?
  • Does a free society have hundreds of police agencies, each with the authority to deprive a man of his life, liberty and property in their sole discretion?
  • Does a free society have hundreds of thousands of laws, codes, rules, regulations, and policies which effectively criminalize nearly every aspect of one’s existence?
  • Does a free society lead the world in prison population?
  • Does a free society hunt down criminals and terrorists by treating its citizens like criminals and terrorists?
  • Does a free society tell its citizens what foods they are / are not allowed to consume?
  • Does a free society steal your money at gunpoint to buy bombs that they drop by remote control on brown people in faraway lands?
  • Does a free society debase its currency and plunder the purchasing power of its citizens?
  • Does a free society saddle unborn generations with obligations they never signed up to bear?
  • Does a free society award near total control of the economy, the money supply, and everything tied to it, to a tiny elite few?
  • Does a free society brainwash its citizens into believing that they live in a free society? (at least the Chinese know they’re not free…)

Ask yourself, are you really living in a free society? Are you free? If not, why not? What else could possibly be more important?

It takes courage to answer honestly. But once you realize the truth and begin to see the system for what it is, it can be a liberating and life-changing experience.

You’ll find that there are places where you can live free in this world. There are ways to preserve your dignity, your , your livelihood. You’ll find that you can build great camaraderie and mutual trust with like-minded souls because you share the same values, not the same color passport.

My guess is that you’re reading this because you’ve already started down the road to freedom. But you might feel alone… intellectually isolated in a sea of automatons.

You’re not alone. More and more people are waking up every day and beginning to realize the incredible fraud that has been perpetrated against them. When enough of them figure it out, this system will be finished.

That’s why I fundamentally believe that today is one of the most exciting times to be alive since the French Revolution. And we’re just getting warmed up.

If you have any friends or loved ones who still exemplify that self-deluded, bombastic serf mentality, I encourage you to pass this along to them… and challenge them to answer honestly.

Powered by WPeMatico

Gold And Grand Theft Economics


The tectonic battle between a market trying to deflate its debts and the central banks attempting to reflate the impaired assets to maintain the status quo is becoming increasingly violent. In a brief clip, Santiago Capital’s Brent Johnson explains the fallacy of fiat money, the dynamics of the velocity of money in a ‘troubled’ economy, the ‘we are going to give the banks a lot of money’ plans, and the inevitable ‘there’s no more money’ moment when the inflationary and deflationary tremors come unstuck and become shock-waves. There will be no warning, no bell-ringing at the onset of the end of the monetary system itself as he notes the slate of Stability & Growth Pacts (EU) and The Recovery and Reinvestment Act (US) will inevitably be seen as the greatest unauthorized transfer of wealth in history – and being exposed to gold stored outside of the banking system, there is a protected route as the world staggers from tremor to tremor.

Powered by WPeMatico

Gossip and views about privacy, gold, wealth, asset preservation