From Terry Macalister of The Guardian (UK) yesterday:

Sir Richard Branson and fellow leading businessmen will warn ministers this week that the world is running out of oil and faces an oil crunch within five years.

The founder of the Virgin group, whose rail, airline and travel companies are sensitive to energy prices, will say that the coming crisis could be even more serious than the credit crunch.

“The next five years will see us face another crunch – the oil crunch. This time, we do have the chance to prepare. The challenge is to use that time well,” Branson will say.

“Our message to government and businesses is clear: act,” he says in a foreword to a new report on the crisis. “Don’t let the oil crunch catch us out in the way that the credit crunch did.”

Other British executives who will support the warning include Ian Marchant, chief executive of Scottish and Southern Energy group, and Brian Souter, chief executive of transport operator Stagecoach.

Their call for urgent government action comes amid a wider debate on the issue and follows allegations by insiders at the International Energy Agency that the organisation had deliberately underplayed the threat of so-called “peak oil” to avoid panic on the stock markets.

Ministers have until now refused to take predictions of oil droughts seriously, preferring to side with oil companies such as BP and ExxonMobil and crude producers such as the Saudis, who insist there is nothing to worry about.

But there are signs this is about to change, according to Jeremy Leggett, founder of the Solarcentury renewable power company and a member of a peak oil taskforce within the business community. “[We are] in regular contact with government; we have reason to believe their risk thinking on peak oil may be evolving away from BP et al’s and we await the results of further consultations with keen interest.”

The issue came up at the recent World Economic Forum in Davos where Thierry Desmarest, chief executive of the Total oil company in France, also broke ranks. The world could struggle to produce more than 95m barrels of oil a day in future, he said – 10% above present levels. “The problem of peak oil remains.”

Chris Skrebowski, an independent oil consultant who prepared parts of the peak oil report for Branson and others, said that only recession is holding back a crisis: “The next major supply constraint, along with spiking oil prices, will not occur until recession-hit demand grows to the point that it removes the current excess oil stocks and the large spare capacity held by Opec. However, once these are removed, possibly as early as 2012-13 and no later than 2014-15, oil prices are likely to spike, imperilling economic growth and causing economic dislocation.”

So what did the Saudis have to say about all this? Macalister noted:

But Saudi Arabia launched a counter-strike at Davos, insisting the issue was overblown. “The concern about peak oil is behind us,” said Khalid al-Falih, chief executive of Saudi Aramco.

Source:

“Branson warns that oil crunch is coming within five years”
Terry Macalister
The Guardian (UK), February 7, 2010

A new study suggests the U.S. housing market may be heading down that same path.

From MarketWatch’s Amy Hoak on Friday:

A recent research report predicts that home prices will fall another 10% this year. And after the housing downturn the country has been through, Americans could remain disillusioned about homeownership as a way to build wealth for years to come.

In his report “Housing in America: The Next Decade,” John K. McIlwain, senior resident fellow of the Urban Land Institute, said that home appreciation will slow considerably in the next decade, to about 1% or 2% annually. The homeownership rate, now at 67%, will fall to about 62%. It was 69% at the height of the housing boom.

The implications of rising numbers of foreclosures, the re-establishment of a private-market residential finance system, and shifts in housing demand will create a residential market that will look much different than the one prior to the recession, he predicted.

“The old ‘normal’ will not return,” McIlwain said in a news release.

For one, baby boomers, Generation Y and a growing population of immigrants all have characteristics that reflect a desire for pedestrian-friendly, transit-oriented, mixed-use environments — whether they decide to live in urban or suburban locations, he said.

Suburban development, he said, will have to adapt to those consumer desires, or will risk becoming obsolete.

“The suburban century is over. This is the urban century,” he said.

You can read the entire report here.

Obsolete?

Source:

“This week’s Real Estate stories”
Amy Hoak
MarketWatch, February 5, 2010

From USA Today’s Richard Wolf last night:

Social Security’s annual surplus nearly evaporated in 2009 for the first time in 25 years as the recession led hundreds of thousands of workers to retire or claim disability.

The impact of the recession is likely to hit the giant retirement system even harder this year and next. The Congressional Budget Office had projected it would operate in the red in 2010 and 2011, but a deeper economic slump could make those losses larger than anticipated.

“Things are a little bit worse than had been expected,” says Stephen Goss, chief actuary for the Social Security Administration. “Clearly, we’re going to be negative for a year or two.”

Since 1984, Social Security has raked in more in payroll taxes than it has paid in benefits, accumulating a $2.5 trillion trust fund. But because the government uses the trust fund to pay for other programs, tax increases, spending cuts or new borrowing will be required to make up the difference between taxes collected and benefits owed.

Experts say the trend points to a more basic problem for Social Security: looming retirements by Baby Boomers will create annual losses beginning in 2016 or 2017.

Source:

“Rash of retirements push Social Security to brink”
Richard Wolf
USA Today, February 8, 2010

In the fast-moving Information Age, we’re bombarded with so much real-time data that we lose sight of historical performance. Well, here’s some interesting facts that Washington and Wall Street probably wouldn’t want you to know about:

According to the Federal Reserve, trusting Wall Street’s recommendations to buy tech stocks at 500 to 1,000 times earnings cost investors $6.6 trillion when the tech bubble burst in 2000.

And according to the Fed’s latest figures, trusting the housing boom that Wall Street and Washington created cost investors another $15.5 trillion in 2007-2009. In sum…

So far in the 21st century alone, Washington and Wall Street have caused combined losses of a staggering $22.1 TRILLION of investors’ money!

-Martin D. Weiss, in the February 7 issue of Weiss Research’s Money And Markets

And here’s another finding about deficit forecasts that might cause concern:

Just a few short days ago, the Congressional Budget Office (CBO) became the first official D.C. source to open its bomb bay doors and let loose on all of us. The CBO’s projections: Instead of falling substantially from $1.4 trillion in 2009 (9.9 percent of GDP), the 2010 deficit would essentially hold steady at $1.35 trillion (9.2 percent of GDP).

The massive 2010 deficit would be followed by another $980 billion deficit in 2011 … $650 billion in 2012 … and $539 billion in 2013. Total red ink through 2020: $7,400,000,000,000!

As stunning as those figures are, long-term projections usually UNDERESTIMATE the deficit. Roughly 80 percent of the four-year deficit forecasts issued in the past three decades ultimately proved too optimistic, according to The New York Times.

Why?

Those forecasts rely on growth, revenue, and spending projections that don’t pass the test of time. Politicians just can’t help themselves — pandering, over-borrowing, and overspending is in their nature.

Just consider this: Two years ago, the CBO forecast the 2010 deficit would be $241 billion. Now the CBO is throwing that projection out the window and saying it’ll be more than FIVE AND A HALF TIMES AS BIG!

–Mike Larson, in the February 5 issue of Weiss Research’s Money And Markets

-Benjamin Franklin (American statesman, scientists, philosopher, printer, writer, and inventor. 1706-1790)

Nafeesa Syeed of the Associated Press wrote today:

Shoppers jammed aisles and emptied stores of milk, bread and shovels ahead of a monster snow storm bearing down Friday on the Mid-Atlantic, with 30 inches or more forecast for the nation’s capital. The federal government sent workers home early and subways ran light as people stayed home.

The region’s second snow storm in less than two months could be “extremely dangerous,” the National Weather Service said. Heavy, wet snow and strong winds would make travel hazardous as the storm gains strength into Friday night…

Residents in the Washington area scrambled for food and supplies, but many found they were too late.

Colleen Sport, who just moved to the area from Atlanta, was at the Home Depot in Falls Church, Va.

“I was looking for salt and shovels and of course they’re out,” said Sport, 42. “Now I’m just hoping to get shelving and work inside.”

In Alexandria, Va., James Ivery, 60, and his wife had already bought supplies but were back at a Harris Teeter supermarket Friday morning to get out of the house one last time before the storm. Many shelves and bins were emptied of milk, vegetables, eggs and cold cuts.

“It just seems like people are panicking. I don’t think it’s going to be too bad,” Ivery said. “As long as I got power and satellite service, I’ll be fine.”

Sounds like the same old story when it comes to preparing for inclement weather.

Or any other potential emergencies, for that matter.

Sad part is, I know some forecasters were warning about this storm a couple of days ago.

Well, here’s hoping everyone stays safe!

Source:

“Snow storm has Mid-Atlantic scrambling for staples”
Nafeesa Syeed
Associated Press, February 5, 2010

-Southwest Airlines commercial

From the “The Wealth Report” blog on the Wall Street Journal site today:

President Obama’s campaign to raise taxes on families earning more than $250,000 has sparked another round of “what counts as rich?”

Once again, those living in big cities–surrounded by huge wealth and huge prices–and those on the right say $250,000 a year is chump change. Those in the rest of the country and on the left say it is rich enough to be taxed.

But Republican National Committee Chairman Michael Steele has a new definition of rich–well above $1 million a year in income. During a joint appearance with Harold Ford Jr. at the University of Arkansas at Little Rock, Mr. Steele attacked the President’s tax increases on the so-called wealthy.

“Trust me,” Mr. Steele said, “after taxes, a million dollars is not a lot of money.”

That didn’t go down so well with the crowd of Arkansas college students…

The quote is a small volley in the war over wealth being waged in Washington. But it also points to a broader cultural divide between those in Richistan and those in everyday America.

In Mr. Steele’s circles, it would be perfectly acceptable to say that $1 million in pre-tax income isn’t big money. And it isn’t relative to the cost of homes on Park Avenue, mansions in Palm Beach, Fla., and Aspen, Colo., or the cost of a household staff, private school, overseas vacations and donations to charities and political candidates. If Mr. Steele had made that remark at a black-tie affair at the Metropolitan Opera, he would have gotten vigorous nods of approval.

But the million-dollar poverty plea doesn’t play as well in Little Rock–or anywhere else outside Richistan.

Barenaked Ladies, “If I Had $1,000,000” (1992)
YouTube Video Link

Source:

“A Million a Year ‘Is Not a Lot of Money’”
Wall Street Journal (“The Wealth Report” blog), February 5, 2010

Source: Bureau of Labor Statistics
Horizontal axis shows months. Vertical axis shows the ratio of that month’s nonfarm payrolls to the nonfarm payrolls at the start of recession. Note: Because employment is a lagging indicator, the dates for these employment trends are not exactly synchronized with National Bureau of Economic Research’s official business cycle dates.

From Reuters’ John Parry on Wedensday:

If the U.S. economy grows anemically, already stretched government finances will be crimped, potentially putting downward pressure on the top Aaa U.S. rating, said Moody’s Investors Service on Wednesday.

“Economic growth is very important to our assessment (of the sovereign rating),” said Steven Hess, senior credit officer in the sovereign risk group with Moody’s Investors Service in New York.

The Obama administration has based its projections of reducing the budget deficit over time on solid economic growth forecasts, but Hess warned that productivity might be lower than before the global financial crisis.

“Right now we are semi-optimistic that the U.S. will regain its previous dynamism, but if it doesn’t, then we have to think about what that implies for government finances,” Hess said in a telephone interview with Reuters.

“The implications would not be good if the U.S. were in for anemic growth for some time to come because the government could have problems for revenue growth,” Hess added.

According to the article, the White House expects that the budget deficit for the fiscal year ending September 30 will amount to 10.6% of gross domestic product. However, they also project deficits should fall to 3.9% by 2014. Parry added:

If the Obama administration’s budget projections for rising interest payments on government debt are realized, “at some point, we don’t know when, there would be downward pressure on the U.S. rating,” Hess said.

Source:

“Anemic growth could threaten US Aaa rating–Moody’s”
John Parry
Reuters, February 3, 2010

-House Minority Leader John Boehner (R-Ohio), as quoted by the Washington Post last night

From MarketWatch’s Robert Schroeder yesterday:

The U.S. government would be allowed to go $1.9 trillion deeper into debt under legislation approved in the House of Representatives on Thursday, which boosts the overall debt limit to $14.3 trillion, but also includes a budget-control mechanism known as “pay as you go.”

The House approved legislation increasing the debt limit on a procedural vote of 217-212, following a tight vote of 60-39 in the Senate last week. It now goes to President Barack Obama for his signature.

The “pay-as-you-go” mechanism requires that any increases in spending be offset with cuts elsewhere in federal outlays. The language was attached to curb future deficits, and the debt-limit measure including the pay-as-you-go mechanism was voted on separately. It passed 233 to 187.

The U.S. is facing a record $1.6 trillion deficit in fiscal 2010 and Obama and legislators are under intense pressure to stanch the flow of the red ink.

Obama said in a statement on Thursday afternoon that the budget rules will hold the government to a “simple but bedrock principle” of spending only if it saves.

“The passage of statutory PAYGO today will help usher out an era of irresponsibility and begin putting the country back on a fiscally sustainable path,” said Obama.

PAYGO sounds good— in theory. However, skeptics are claiming that Congress can easily break the rules by declaring some sort of spending “emergency,” like extending jobless benefits, for example.

Source: Associated Press

Source:

“House sends $1.9 trillion debt-limit increase to Obama”
Robert Schroeder
MarketWatch, February 4, 2010

Many legal experts predict that the court will strike down Chicago’s handgun ban.

Even if that happens, no one expects a dramatic spike in the number of handguns in Chicago. Daley and the City Council most likely will replace the ban with tight regulations.

Which would keep the status quo, or as the Tribune’s Steve Chapman wrote back in November:

In Chicago, only criminals and aldermen are armed. Forgive me for being redundant.

The entire Tribune piece about McDonald v. City of Chicago can be read here.

Source:

“The Public Face Of Gun Rights”
Colleen Mastony
Chicago Tribune, January 30, 2010

Two for you tonight.

From USA Today’s Liisa Rajala on Wednesday:

Gravel roads, once a symbol of quaint times, are emerging as a sign of financial struggle in a growing number of rural towns.

High costs and tight budgets have prompted communities in Maine, Michigan, Indiana, Pennsylvania and Vermont to convert or consider converting their cracked asphalt roads back to gravel to cut maintenance costs, officials in those states say.

New technology allows asphalt to be recycled into a durable gravel-like surface that is cheaper to maintain and adequately prevents potholes and mud, said David Creamer, a field operations specialist at the Center for Dirt and Gravel Road Studies at Pennsylvania State University.

Thirty-eight counties in Michigan replaced a total of 100 miles of asphalt roads with gravel because of decreasing funds in 2008-09, said Monica Ware, a spokeswoman for the County Road Association of Michigan.

In Montcalm County, Mich., 10 miles were converted to cut patching costs in 2009, said Randy Stearns, managing director of the county’s road commission. He cited one road that cost a combined $39,244 in 2008 and early 2009 for patching, but only $7,300 to crush into gravel. More roads may be converted this summer, he said.

A 2006 study by the University of Minnesota’s Center for Transportation Studies found gravel is cost-effective when daily traffic averages 200 vehicles or less.

Next up? Horse-drawn carriages.

And here’s something news website WhatReallyHappened.com picked up on yesterday.

Sounds like the IRS is acquiring some serious hardware to make someone’s day…

Acquiring Shotguns
Solicitation Number: TIRWR-10-Q-00023
Agency: Department of the Treasury
Office: Internal Revenue Service (IRS)
Location: Field Operations Branch Western (OS:A:P:B:W)

Notice Type:
Combined Synopsis/Solicitation
Original Posted Date:
February 2, 2010

The Internal Revenue Service (IRS) intends to purchase sixty Remington Model 870 Police RAMAC #24587 12 gauge pump-action shotguns for the Criminal Investigation Division. The Remington parkerized shotguns, with fourteen inch barrel, modified choke, Wilson Combat Ghost Ring rear sight and XS4 Contour Bead front sight, Knoxx Reduced Recoil Adjustable Stock, and Speedfeed ribbed black forend, are designated as the only shotguns authorized for IRS duty based on compatibility with IRS existing shotgun inventory, certified armorer and combat training and protocol, maintenance, and parts.

Submit quotes including 11% Firearms and Ammunition Excise Tax (FAET) and shipping to Washington DC.

Jealous, Sarah?

Sources:

“Tight times put gravel on the road”
Liisa Rajala
USA Today, February 3, 2010

The number of U.S. homes listed for sale rose in January compared to December after 18 consecutive months of decline, according to data released on Thursday by real estate brokerage ZipRealty.

The increase in listings from a survey of Multiple Listing Services can be attributed to the extension and expansion of U.S. home buyer tax credits, which is prompting sellers to list their homes sooner rather than wait for spring, the peak home buying season, according to Emeryville, California-based ZipRealty.

It may also be indicative of banks starting to put foreclosed properties up for sale.

The total number of single-family homes and condos listed for sale increased in January from December by 2.9 percent, bringing the total number of active listings in the 27 major U.S. metropolitan markets to 567,265, the company said.

The rise means more than 15,000 additional homes were listed for sale in January in these markets.

Increased supply could negatively impact the hard-hit U.S. housing market, which remains highly vulnerable to setbacks.

Source:

“US Home Listings Up in January, First Rise in 18 Months”
Reuters, February 4, 2010

It makes me shiver when I imagine any of you bitter renter peons using the word “think”. It is almost certain that all of you are lacking 2 fundamental things (not necessarily in that order):

1. A brain to think with

2. Home ownership (requiring a brain)

Renters just don’t get it. Renting a shit-hole 1BR apartment is not an achievement it is a statement of utter incompetency and lack of character.

Since I’m an employer I always look at the employment applications looking for housing status. If you’re over 25 and rent you can forget about getting hired! You sorry ass dip-shit imbeciles. You really don’t get it. I might as well talk to the garbage can. Unf*cking believable!!!

Of course, shortly after this comment was made, housing went south.

And, despite the claim of this individual, it became readily-apparent that possession of a brain was not a prerequisite for “owning” a house.

In fact, if some of those reports about loose lending are true, having a pulse most often sufficed.

Remember Me?

Anyway, with all the carnage in housing, it should come as no surprise to anyone that America’s “homeowners” are disappearing, having been transformed into renter “peons” once more. From the Wall Street Journal’s Jeff Bater and Sara Murray yesterday:

The percentage of Americans who owned their homes fell at the end of 2009 to the lowest point in nearly a decade, a reflection of continuing troubles in the housing market even as the sector showed signs of stabilizing…

Some 67.3% of Americans owned their homes in the fourth quarter of last year, based on seasonally adjusted data, the Commerce Department said Tuesday. That is the lowest percentage since the second quarter of 2000, when the same share of Americans owned homes.

“The home-ownership data I think really just underscores how this country as a whole became obsessed with getting people into homes,” said Mike Larson, real-estate and interest-rate analyst at Weiss Research Inc., an investment-research firm. “You can do all kinds of things to get people into a house, which we did; the real problem is making it so they can stay there.”

The home-ownership rate reached a high of 69% in 2004 as low interest rates and easy credit prompted large numbers of families to stop renting and purchase homes. But the rate began to fall two years later as some homeowners struggled to make their mortgage payments and eventually lost their homes to foreclosure. Between 2007 to 2009, nearly four million homes were lost to foreclosure. And home ownership rates are now moving closer to the level that was common in the 1990s…

The decline in home ownership reached all regions of the U.S. but was most pronounced in the South, where the level fell to 69.1% from 69.8% a year ago.

Source:

“Home-Ownership Level Falls to 67.3%”
Jeff Bater, Sara Murray
Wall Street Journal, February 3, 2010

Especially as a new warning from U.S. intelligence officials establishes a timeframe within which to expect an attempted terrorist attack against the United States.

The Wall Street Journal’s Siobhan Gorman and Evan Perez reported today:

The U.S.’s top intelligence officials said Tuesday that an attempted al Qaeda attack on the U.S. in the next three to six months was “certain.”

An official also said the Nigerian who allegedly attempted to blow up an airliner on Christmas Day was again cooperating with federal investigators. Republicans have accused the administration of squandering a chance to gain valuable intelligence from the suspect by using the civilian court system to charge him, instead of declaring him an enemy combatant and subjecting him to more interrogation.

Al Qaeda remains a significant threat to the U.S., the officials said, and the group’s recent evolution in tactics includes dispatching individuals who can enter the U.S. without arousing suspicion, such as the man accused of attempting the Christmas Day attack.

Such tactics have created “a new degree of difficulty” for U.S. spies seeking to thwart the next attack, Director of National Intelligence Dennis Blair told the Senate Select Committee on Intelligence.

Al Qaeda will remain intent on attacking in the U.S. at least until Osama bin Laden and his second in command, Ayman al Zawahiri, are killed or captured, Mr. Blair said.

Al Qaeda’s many affiliates are also of great concern to the spy agencies. The Yemeni affiliate, which is believed to have directed the attempted Christmas Day attack, will continue to attempt additional attacks on the U.S., Mr. Blair said.

Militant groups in Pakistan are also coordinating their attacks with al Qaeda, which has led to an increase in terrorist attacks inside Pakistan as well as rising concerns the groups may expand their ambitions to attack outside Pakistan, officials said.

From what I’ve gathered in my research, other experts believe it doesn’t really matter if bin Laden or al Zawahiri are dead or alive. The threat will continue to be real, regardless.

Om January 27, 2010, I wrote that attempted terrorist attacks may include the use of weapons of mass destruction, or WMDs. From that post:

This ought to keep a few people awake tonight. From UPI yesterday:

A report by a former top CIA official says al-Qaida still has a goal of attacking the United States with chemical, biological or perhaps nuclear weapons.

The report by a former senior CIA official Rolf Mowatt-Larssen, who led the agency’s search for weapons of mass destruction, indicated al-Qaida’s leaders were willing to wait for years to get the kinds of weapons that could inflict massive destruction, The Washington Post reported Tuesday.

Unfortunately, the nation might not be ready for such an attack. Also from that same post:

From the Associated Press on Tuesday:

The U.S. isn’t prepared for a biological terrorist attack, a congressionally mandated panel said in a report released Tuesday.

The Commission on the Prevention of Weapons of Mass Destruction Proliferation gave the Obama administration a failing grade for its efforts to prepare for and respond to a biological attack, such as the release of deadly viruses or bacteria.

Wonderful.

Image from Islamist web site calling for
WMD attack upon America

Source:

“Officials Warn al Qaeda ‘Certain’ to Try Attack Soon”
Siobhan Gorman, Evan Perez
Wall Street Journal, February 3, 2010