Ear Ring

Cost Of Oil

The U.S. oil and gas industry's costs of finding resources rose 35 percent last year amid the wild rise and fall in commodity prices, an Ernst & Young study released Thursday showed.

The three-year average cost per barrel of oil equivalent, excluding acquisitions of proved reserves, was $27.22. But in 2008 that spiked to $51.96.

"This validates that finding oil and gas reserves is very, very expensive," said Marcela Donadio, oil and gas sector leader for the Americas. She noted that cost also demonstrates why some companies have delayed final investment decisions on costly expansions or new projects, such as those in Canada's oil sands or deep-water exploration.

The study examined U.S. exploration and production results for 40 companies from 2004 through last year. The companies, which include oil majors as well as large and small to midsize independents, collectively hold 70 percent of U.S. oil reserves and 61 percent of U.S. natural gas reserves.

Overall costs, including acquisitions, rose 35 percent last year to $132.1 billion, the study said.

But oil reserves fell 7 percent to 15 billion barrels, largely because regulatory reporting rules required companies to book reserves that can be produced economically at the closing price on the last trading day of the year.

Last year that price was $44.60 a barrel -- far below the year-end 2007 price of $95.

The same rule forced reductions of 6.7 trillion cubic feet of booked natural gas reserves as well. Even with those write-downs, gas reserves rose 4 percent overall amid the boom in shale production last year.

However, starting at the end of 2009, companies can book reserves based on average annual price rather than a one-day snapshot. In 2008, that average was about $99 a barrel.

So as prices recover alongside the economy, reserves that were written off can be restored to companies' books as they become economical to produce again, said Charles Swanson, managing partner of Ernst & Young's Houston office.

"It certainly was a year to remember," he said.

Source - Rigzone

Zig-Zag

World - Take The Dollar Down

China’s central bank renewed its call for a new global currency and said the International Monetary Fund should manage more of members’ foreign-exchange reserves, triggering a decline in the U.S. dollar.

“To avoid the inherent deficiencies of using sovereign currencies for reserves, there’s a need to create an international reserve currency that’s delinked from sovereign nations,” the People’s Bank of China said in its 2008 review released today. The IMF should expand the functions of its unit of account, Special Drawing Rights, the report said.

The restatement of Governor Zhou Xiaochuan’s proposal in March added to speculation that China will diversify its currency reserves, the world’s largest at more than $1.95 trillion. Chinese investors, the biggest foreign owners of U.S. Treasuries, reduced holdings in April after Premier Wen Jiabao expressed concern about the value of dollar assets.

“Zhou Xiaochuan sees the current international financial system is flawed, putting too much emphasis on the dollar as a reserve currency,” said Kevin Lai, an economist with Daiwa Institute of Research in Hong Kong.

President Barack Obama needs the support of China as the U.S. tries to spend its way out of recession. The Dollar Index that measures the currency’s performance against six trading partners fell as much as 0.8 percent to 79.779 at 1:11 p.m. in London. U.S. Treasuries were little changed with the 10-year yield at 3.53 percent.

‘Unlikely’ Shift

“It’s extremely unlikely the dollar will be replaced as the reserve currency,” said Glenn Maguire, chief Asia-Pacific economist at Societe Generale SA in Hong Kong. “A currency needs to be internationalized and that requires a fully convertible capital account, which China doesn’t have. The second is that it needs to be adopted.”

At the end of 2008 the dollar accounted for 64 percent of global central bank reserves, down from 73 percent in 2001, according to the IMF in Washington.

On June 13, Russian Finance Minister Alexei Kudrin reassured investors of the country’s confidence in the greenback by saying it was “still early to speak of other reserve currencies.” Brazilian Finance Minister Guido Mantega said on June 10 the government’s decision to switch some reserves into IMF bonds wasn’t aimed at weakening the dollar.

Federal Reserve holdings of Treasuries on behalf of central banks and institutions rose by $68.8 billion, or 3.3 percent, in May, the third most on record, Bloomberg data show.

Diversifying Holdings

China has started to pare its holdings, trimming them by $4.4 billion to $763.5 billion in April, the first monthly reduction since February 2008, according to U.S. Treasury Department data. Figures for May have yet to be released.

“There may be signs here of tensions mounting between the PBOC’s economic concerns over China’s holdings of dollars and the Chinese government’s diplomatic reasons for doing so,” Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London, wrote in an e-mail.

Russian President Dmitry Medvedev, Chinese President Hu Jintao, Indian Prime Minister Manmohan Singh and Brazilian President Luiz Inacio Lula da Silva called for a “more diversified” monetary system to reduce dependency on the greenback at a June 16 meeting in the Russian city of Yekaterinburg. In May, China and Brazil began studying a proposal to move away from the dollar and use yuan and reais to settle trade instead.

Group of 20

Group of 20 leaders on April 2 gave approval for the IMF to raise $250 billion by issuing Special Drawing Rights, or SDRs, the artificial currency that the agency uses to settle accounts among its member nations. It also agreed to put another $500 billion into the IMF’s war chest. This month, Russia and Brazil announced plans to buy $20 billion IMF bonds, while China said it is considering purchasing $50 billion.

“Special drawing rights of the IMF should be given full play, and the international body should manage part of its members’ reserves,” the central bank report said.

IMF First Deputy Managing Director John Lipsky said on June 6 it’s possible to take the “revolutionary” step of making SDRs a reserve currency over time.

SDRs were created by the IMF in 1969 to support the Bretton Woods exchange-rate system that collapsed in 1971. They act as a unit of account rather than a currency. The cash is disbursed in proportion to the money each member nation pays into the fund.

Widening the Basket

The value of SDRs are based on a basket of currencies, shielding them from swings in a single currency. One SDR is valued at $1.54. China is proposing the basket be broadened. The current weighting is: 44 percent for the dollar, 34 percent for the euro and 11 percent each for the yen and the pound. It doesn’t include the yuan.

The dollar’s dominance of global finance buffeted developing nations last year. Investors abandoned emerging markets after the September bankruptcy of Lehman Brothers Holdings Inc. eliminated demand for all but the safest, most easily traded assets, such as Treasuries and the dollar. A shortage of the U.S. currency forced central banks to pump reserves into their economies.

“The excessive reliance on the credit of several sovereign currencies have added to the extent of risks and crises,” the central bank report said. “A currency with stable value in the long term is required.”

Source - Bloomberg

Yellow

Special Living

The plans of a Swiss canton to attract the super-rich by offering them the chance to buy property in exclusive, previously out of bounds locations has sparked a political row and accusations that the country is encouraging apartheid of the rich and poor.

The canton of Obwalden is planning to launch "special living zones" for millionaires in an attempt to boost its tax take by luring the wealthiest residents. Like other cantons in the tax haven, Obwalden finds itself short of revenue because it has been competing with other jurisdictions to see who can offer the lowest rate of tax.

The result has been a drastic shortfall in tax revenues as people set up PO box companies to take advantage of the low rates, while contributing nothing to the local economies because they live elsewhere.

Obwalden's answer is to lift construction bans on land reserved for agricultural use, offering the rich the chance to secure property on protected land, with the promise of spectacular views of lake and alpine landscapes.

Details of Obwalden's plan, published in the Swiss press, suggest selling villas on an exclusive basis to those who pay high taxes or who create work in the area – "a sunny location, with low noise emissions, good amenities … as well as an unrestricted view that cannot be built on".

The homes would be constructed on land not usually accessible to ordinary citizens, leading to accusations that the policy discriminates against less wealthy inhabitants while rewarding the rich.

"These special living zones are nothing less than a form of apartheid," said Moritz Leuenberger, of the Social Democrats, who is Switzerland's environment and transport minister. "Is a racing car driver of so much more use than a nurse?" he asked, referring to the rich personalities such as Michael Schumacher who have moved to Switzerland to take advantage of its favourable tax laws.

Many argue that the drive to draw in the rich is destroying communities as normal earners are forced out by rising prices.

Obwaldeners are likely to get the chance to vote on the special zones policy in a referendum later this year.

Farmers and the Green party have joined the campaign to stop the special zones. But Obwalden's decision makers have hit back at the criticisms, arguing that those who have the money should have a wider choice.

"Swiss Railways offers a first class with more comfort and more space," said Obwalden's finance director, Hans Wallimann. "There's also the second class where I have less space, but I pay half the amount. Is that so unfair?"

Obwalden reduced its taxes by a quarter three years ago, bringing corporate tax down to 6.6% and local income tax down to 1.8% in reaction to pressure from its inhabitants – 90% voted in favour of the move in a referendum.

It also introduced a flat tax rate, meaning that a millionaire chief executive pays the same percentage of tax as a toilet attendant.

While on paper it appears that 400 new companies moved to the area as a result of the changes, most are nothing more than PO box companies. They fail to offer employment to locals or boost consumer spending in the region.

Source - Guardian

Eyes

Hope

THE loquats were ripe and just begging to be picked.

But there was a problem. Although the tree was planted on private property, the loaded branches hung over the street.

Did that make the fruit public property?

In the end, with no one around to ask, Asiya Wadud decided the answer was yes. So she added them to a bag already heavy with Meyer lemons picked (with permission) from a yard a few blocks away. Then she headed off to check on some plum trees.

It was just another day of urban fruit foraging for Ms. Wadud, one of a growing number of people who looked around their cities, saw trees full of fruit and thought, “Delicious.”

A year and a half ago, Ms. Wadud, who studied urban sociology in college and bartended at Chez Panisse, began organizing a little neighborhood fruit exchange called Forage Oakland. She did it as much to build neighborhood relations as to get her hands on some of that fruit.

It works simply. A woman with a yard full of lemon trees, say, can share her bounty in exchange for a paper bag full of someone else’s persimmons when they come into season. So far, 200 people have signed up.

All over the country, the underground fruit economy is growing. At new Web sites like neighborhoodfruit.com and veggietrader.com, fruit seekers can find public mulberry patches in Pennsylvania and neighbors willing to trade blackberries in Oklahoma.

In Royal Oak, Mich., a woman investigated how to start a fruit exchange modeled after Fallen Fruit (fallenfruit.org), an arts group that designs maps of accessible fruit growing in Los Angeles neighborhoods.

In Alaska, cooks used Facebook to find willing donors of backyard rhubarb, the first dessert crop that grows after the long winter. In Columbia, S.C., university students pulled spare peaches from orchards and donated them to a local food bank.

Supporters of this movement hold two basic principles. One, it’s a shame to let fruit go to waste. And two, neighborhood fruit tastes best when it’s free.

“There have always been people harvesting fallen fruit,” Ms. Wadud said, “but there’s a whole new counterculture about gathering and eating public fruit. This tremendous resource is growing everywhere if people just start looking around.”

Jennifer Perillo, a mother and food writer who lives in Brooklyn, became an accidental neighborhood fruit forager last summer. She was driving to her mother’s house in Bensonhurst when she saw vibrant red balls hanging from a tree in someone’s yard. Cherries!

She saw a peach tree, too, and leaned over a fence for a sample. The owner was none too happy, but when she explained that she only wanted her children to taste a fresh Brooklyn peach, he gave her half a dozen.

Then she started looking for fruit in her own neighborhood, Carroll Gardens, finding apricots and figs in abundance. “Honestly, for years I walked around the neighborhood in my own world and I never noticed all of this before,” she said.

Three years ago, Katy Kolker had a similar experience in her northeast Portland, Ore., neighborhood. Fruit was going to waste, and she decided to do something about it.

She and some friends went to the home of a woman who had planted apple trees 30 years before, but was too old to pick them. They gathered nearly 200 pounds, gave some to the woman and went back to prune her trees.

That apple adventure inspired the Portland Fruit Tree Project, a database of more than 300 trees, each registered by the owner, who promises to call about two weeks before the fruit is ripe to arrange a harvest.

“A family can only really eat 20 pounds of fresh apples or so before they cry uncle,” Ms. Kolker said. “A fruit tree is really made for sharing with your neighborhood.”

This year, 20 picking parties are planned. Half the fruit goes to the people who pick, and half to a local food bank. Ms. Kolker reserves half of the dozen slots at each picking party for low-income people.

Hynden Walch, a voice-over actress for animated films, put together a more modest fruit program in her Los Angeles neighborhood. “I would walk up in the hills where I live and I would see all this incredible food just dying on the tree and rolling down the hill,” she said. Plus, her own seven fruit trees were going unpicked, which was an embarrassment.

Last August, she sent an e-mail message to her neighbors asking them to drop extra fruit and garden bounty at her house, where she would divide it up and give everyone back a bagful.

Since then, membership in her little Hillside Produce Co-operative has doubled, and other neighborhoods are copying her.

She recently filled bags with lemons, oranges, grapefruits, kumquats and loquat jam. The jam came from a chef who didn’t have fruit but had skills.

“Everyone’s contribution weighs the same,” she said. “A fig will get you a bag. In my gigantic idealism, where money isn’t the center of the universe, this is a small way I can right the balance of the world.”

For cooks, like Samin Nosrat, a cook at the restaurant Eccolo in Berkeley, free fruit is like a little kitchen miracle. She sneaks grape leaves to wrap sardines. Once, she stumbled upon so many fallen green walnuts on a sidewalk that she piled a bunch into a blanket she retrieved from her car, and made nocino, a walnut liqueur.

Ms. Nosrat calls it opportunistic cooking, which she means in the best way.

“It’s cooking from nothing,” she said.

As with content on the Internet, though, not everybody believes that fruit wants to be free.

Danila Oder, who works at a hospital in Los Angeles, learned that lesson a few years ago when she wrote a list of tips on making public fruit tree maps for Fallen Fruit.

A woman whose tree was included on one of the maps was furious that people were raiding her trees, even though some of her fruit was hanging over public space, making it legal to pick under California law.

Since then, Ms. Oder has wrestled with the issues of fairness and legality, which can vary by state and neighborhood. She has come to see that not everybody is respectful when it comes to the civic sharing of public fruit.

“If you let everyone know who’s got extra food, someone is going to break in or go over the fence,” she said.

Then there is the debate over whether money should be made from spare backyard fruit. Two new Web sites are trying to find a balance. The thousands of people who have registered on veggietrader.com can choose to swap or sell their backyard garden’s overflow, Craigslist style.

Neighborhoodfruit.com offers a swapping system and lists 5,000 public fruit trees around the country. The founders are considering charging a $4 finder’s fee for people who want to use the site, said Kaytea Petro, who helped start the project.

That sum could help pay for the Web site but still be affordable for people with low incomes, who might be able to sell pies or other items made with the fruit. The fee would be waived for people who give fruit away.

They might even add a V.I.P. service for “the super-fancy Slow Food people who really like the idea of extremely local food but don’t have time to go get it,” she said.

Of course, there are legal considerations. So the founders carefully worded their site user agreement. “If they register a tree with malicious intent, then they are liable,” Ms. Petro said.

Some money-for-fruit models are less ambitious. Jennifer Fisher, a stockbroker, sells the Santa Rosa plums that proliferate in her Berkeley backyard.

“It became this big ordeal to give away my plums every year,” she said.

She decided to set out a table of paper bags each holding a generous pound of plums. Next to them was a box where people could drop in a dollar per bag.

Last summer, she made $75, including the dollar she charged parents who wanted their three children to pick the fruit themselves. It’s not about the money, Ms. Fisher maintains. She just wants to make sure the plums go to people who really care about fruit.

“You could just give them away,” she said, “but if you sell them for a dollar a pound you know people are using them.”

Source - New York Times

Wish

Plotting Dollar's Demise

The leaders of Russia and China agreed to expand use of the ruble and yuan in bilateral trade to lessen dependence on the U.S. dollar a day after they took part in the first summit of the so-called BRIC countries.

“We agreed to take further steps in this direction, including, perhaps, by adjusting contracts and laws that already exist,” Russian President Dmitry Medvedev told reporters in the Kremlin today after talks with his Chinese counterpart Hu Jintao.

Russia, the world’s biggest energy supplier, wants to start selling oil to China in rubles, said Deputy Prime Minister Igor Sechin, who is also chairman of OAO Rosneft, Russia’s biggest oil company. Energy sales in rubles are a “strategic” issue for Russia, he said, adding that oil exports to China over the next 20 years will surpass $100 billion.

Brazil, Russia, India and China agreed yesterday to push for more clout in global financial institutions during what Medvedev called BRIC’s “historic” first summit in the Ural Mountains city of Yekaterinburg. China and Russia have called for a more diversified financial system to give emerging economies a bigger say in economic affairs, including the creation of alternatives to the U.S. dollar as a reserve currency.

‘Symbolic Value’

“Expanding the use of national currencies in mutual settlements is a separate, important task,” Medvedev said. China has the world’s biggest foreign-currency reserves, almost $2 trillion, while Russia is third with more than $400 billion.

The ruble weakened 0.1 percent to 31.2396 against the dollar in Moscow today after earlier strengthening as much as 0.4 percent. The yuan was little changed against the dollar on speculation China will prevent appreciation to avoid a prolonged slump in the nation’s exports.

It will take “at least a couple of years” to start converting the first contracts into domestic currencies, said Elina Ribakova, Citigroup Inc.’s chief economist in Moscow.

Today’s announcement has “important symbolic value,” she said. “If you take a 10- or 20-year perspective, trade between Russia and China will increase significantly.”

Total trade between the neighboring countries reached a record $56.8 billion last year, according to the Kremlin.

After today’s Moscow meeting, Russia and China signed an agreement worth $3 billion to cooperate in trade and investment in areas including light industries, high technology and energy.

U.S. Deficit

The dollar’s status has come into question as leaders of the BRIC nations consider substituting other assets for their dollar holdings amid a ballooning budget deficit that keeps the U.S. dependent on foreign financing. China alone owns about $744 billion of U.S. Treasury bonds among its $2 trillion of foreign- exchange reserves.

Russian central bank First Deputy Chairman Alexei Ulyukayev’s comment on June 10 that Russia may sell some of its U.S. bonds to buy International Monetary Fund notes helped push 10-year yields on Treasuries to the highest level since October.

Brazilian President Luiz Inacio Lula da Silva today denied that BRIC leaders discussed buying each other’s bonds at the Yekaterinburg summit, after Medvedev’s top economic adviser said the matter might be discussed.

Dollar bonds sold by China earned 11.4 percent in the past year, more than double the 4.6 percent for debt in yuan, JPMorgan Chase & Co. indexes show. Brazil’s U.S. currency bonds returned 3.6 percent as real-based notes lost 4.9 percent, and Russia’s dollar bonds outperformed with a 1.9 percent loss compared with a 7 percent drop in ruble debt. India doesn’t have dollar-denominated debt.

Source - Bloomberg

Perfection

US Economic Stats Lie

How’s the economy treating you? Chances are, your answer is colored largely by three things: whether you’re working (if you want to), how much you’re making and how quickly your expenses are rising. Economists rely heavily on the same factors to judge the nation’s health. At last count, 9.4% of the workforce is jobless. Compared with a year ago, the goods and services we produce are worth 5.7% less while the ones we buy are 0.7% cheaper.

Two bright people might see sharply different things in those numbers. To one, the shrinking economy is a healthy unwinding of past excess, for example, while to another it’s a dangerous downturn that calls for bold government action. But what if the numbers themselves are something we should be debating? In the alarming view of a vocal few, America’s economic measures are misstated -- rigged, really.

The accusation goes like this: Surveyors collect the nation’s data and statisticians compile and report it. Politicians naturally want the numbers to show improvement. Not being able to change the facts, they focus on the handling of facts, pressuring statisticians to change their measurements. It’s not quite one grand conspiracy but decades of minor ones compiled. Today’s reports are so perverted, the theory holds, that the numbers have detached from common experience.

Pollyanna Creep

If the theory has a chief architect, it is John Williams, a semi-retired grandfather of five living in Oakland, Calif. The son of a chainsaw importer, Williams sold the family business in the 1970s and began consulting for corporations, recalculating government economic data to arrive at what he says were more reliable measures, and with them, truer forecasts. Today Williams runs Shadow Government Statistics (ShadowStats.com) from his home. For $175 a year subscribers get economic data and analysis adjusted to back out the accumulated effects of what Williams has dubbed the Pollyanna Creep -- Pollyanna being the orphan protagonist of the 1913 children’s book who learns to play the “glad game” to find cheery perspectives on life’s sorrows. In other words, he provides figures he feels are properly miserable, to offset government ones he says are too prettied-up.

If Williams is right, unemployment is over 20%, gross domestic product is shrinking by 8% and consumer prices are jumping by nearly 7%. His forecasts border on apocalyptic. The government is creating so much new money, he says, that the all but inevitable result is hyperinflation, where “your highest denomination, the $100 bill, becomes worth more as toilet paper than money.” Buy physical gold, he advises.

Whether we believe the forecasts or not, the possibility of a Pollyanna Creep has serious implications. Social Security payments are just one benefit adjusted each year for increases in the cost of living. If the figures hadn’t been corrupted, says Williams, checks might be close to double what they are.

Williams has managed to attract plenty of press. A year ago, Harper’s magazine featured a cover drawing of a grinning Uncle Sam fondling numeral-shaped party balloons, with the headline, “Numbers Racket: Why the Economy is Worse Than We Know.” The story centered on Williams’ data. The San Francisco Chronicle followed with “Government Economic Data Misleading, He Says.” Last fall in the London Times: “Forget Short-Sellers and Manipulators, Pollyanna Creep Could Be the Culprit.”

Government statisticians are frustrated. “Economic Data Seems Accurate” doesn’t make for a catchy headline, so the press, they say, are too quick to give credence to conspiracy theories. “We go out of our way to be transparent,” says Thomas Nardone, who during 32 years at the Bureau of Labor Statistics helped implement many of the changes in calculating the unemployment rate. “We’d be remiss if we didn’t make changes,” he says. “I’ve never seen measurement changes that were politically motivated.”

Katherine Abraham served as commissioner of BLS during the Clinton administration. Commissioners, unlike the statisticians who work for them, are political appointees. Now a professor at University of Maryland, Abraham says she did see political pressure, but rarely, and never with results. Once, she says, a prominent lawmaker told her the BLS might get more funding if it would agree to propose changes that reduce the appearance of inflation. Abraham says she rebuffed the offer.

Decide for yourself. Here’s a roundup of measurement changes at the heart of Williams’ claims, along with responses from people who work closely with the measurements. I’ll focus on unemployment and inflation, but not GDP, since the chief flaw with it, according to Williams, is how problems with the inflation measure overstate real, or after-inflation, growth. (There’s a different case to be made -- that GDP measures some fairly undesirable things, like the cost of war and divorce lawyers, and so isn’t a great proxy for economic well-being -- but I’ll save that subject for another day.)

Disappearing Jobless?

About 13 million people were unemployed during the Great Depression, or around 25% of the work force, but those are fairly recent estimates. At the time, the government simply didn’t track data like it does today, which made it difficult to judge whether things were getting better or worse. Two main developments in the 1930s made tracking unemployment feasible. The first was an improvement in the way statistics are used to turn a relatively small sample into a faithful representation of the larger population. That allowed for the use of surveys. The second was the notion of basing one’s status as part of the unemployed work force on actions. Whether someone wants to work, after all, is a subjective thing. Whether they’re looking for work is not.

Today the BLS reports six measures of unemployment, called U-1 through U-6, for which the definition of unemployment gradually broadens. For example, 4.5% of the work force has been unemployed for 15 weeks or longer and is actively looking for work (U-1), while 15.8% is unemployed if we count those who say they want work but aren’t looking, and those who work part-time for lack of full-time options (U-6).

Williams takes issue with a 1994 change that coincided with a shift to computerized data collection from pencil and paper. Until then, a discouraged worker was someone who wanted to work but had given up looking because there were no jobs. The BLS tightened the restrictions with additional questions, which reduced the ranks of discouraged workers by half. As Williams puts it, “The Clinton administration dismissed to the non-reporting netherworld about five million discouraged workers.” Add those in, he says, and unemployment approaches Great Depression levels.

Nardone, the longtime BLS economist who today serves as assistant commissioner for current employment analysis, says the 25% unemployment rate often cited for the Great Depression is based on research that corresponds with today’s U-3, the unemployment rate most commonly reported by the media. It stands at 9.4%, recall -- not close to Depression-era levels. The 1994 changes did reduce the ranks of discouraged workers, but also introduced a new category: the marginally attached, who want jobs but aren’t looking for reasons like transportation problems and child-care requirements. The most commonly watched measure (now U-3, before the change U-5) is mostly unaffected, since it doesn’t include discouraged workers. The benefit of the changes, explains Steven Haugen, a BLS economist, is a less subjective measure of discouragement, and some additional ways to judge whether the nation is not only working, but working up to its ability. Williams says the change reduced the broadest measure of unemployment in a way that “doesn’t match with public perception, and for good reason.”

Rent, Geometry and Hedonism

The same agency that reports unemployment, the BLS, also reports the consumer price index. It tracks changes in the prices of more than 8,000 goods and services, from apples in New York to gasoline in San Francisco. There are several variants of the CPI index. For example, CPI-W weights things like fuel more heavily to better reflect the commutes of workers, and is the basis for Social Security adjustments. CPI-U, the measure most often reported in the media, includes items a typical urban consumer might buy, and determines adjustments to inflation-indexed Treasury bonds. Note that “core” inflation, which excludes food and fuel, isn’t used as the basis for any federal spending program (and isn’t called “core” by the BLS, which reports but doesn’t seem to especially prize the measure).

Most CPI criticism is based on three changes that affect all indexes. In 1983 the BLS replaced house prices with something called owners’ equivalent rent to measure the cost of shelter. Williams and other critics say it understates the cost, since house prices, until recently, had outpaced rents. John Greenlees, a BLS economist, says the new method is the most widely used among developed nations and is meant to fix a flaw in the old one. The CPI is supposed to measure things people buy to use, not things they invest in. For many people, houses are a little of both. The new measure attempts to isolate the portion of housing expenditures that best reflects the cost of living. Williams says the purchase price of housing is an important factor in determining a constant standard of living, and he doubts the ability of “the government to accurately calculate how much a person would pay to rent his own house.”

Another change: In 1999 the BLS adopted a geometric mean formula to replace its arithmetic mean one. The new method weights goods less as their prices rise, and is supposed to reflect patterns of consumer substitution. Critics say that treats consumers as if they’re no worse off when they switch to hamburger from steak. Greenlees says the analogy is flawed; the methodology allows substitution only between similar goods in the same region -- from steak in Chicago to a different type of steak in Chicago, and not to hamburger. The old measure was really an overstatement of price increases, one that assumed consumers don’t react at all to higher prices, he says. Also, the impact is relatively small. The BLS has continued to calculate prices under both methodologies and says over five years ended 2004 the new measure reduced CPI growth by 0.28 percentage points a year. Williams says geometric weighting has moved the CPI away from measuring a constant standard of living. He says that when the effects are combined with those of other changes, like increased price surveying among discount stores (which he contends offer poorer service and thus a lower standard of living than the shops they replaced) the overall impact is larger than the BLS states.

Finally, in 1999 the BLS began using what it calls hedonic adjustments. Williams explains the approach with a dash of sarcasm: “That new washing machine you bought did not cost you 20% more than it would have cost you last year, because you got an offsetting 20% increase in the pleasure you derive from pushing its new electronic control buttons instead of turning that old noisy dial.” He calls the impact on CPI “substantial.” Greenlees says the name “hedonic” was an unfortunate choice, since the technique has little to do with making judgments about pleasure. It’s designed to measure the quality difference between goods when one is discontinued and must be replaced in the index with another that’s not quite the same. Adjustments can push the index in either direction, but Greenlees says the overall impact since the change has been a tiny increase in the CPI -- about 0.005% a year. Williams says some hedonic adjustments are indeed necessary, like when the size of a box of crackers changes from 12 ounces to 10 ounces. But more theoretical adjustments, he says, “overstate the quality of what the public is buying."

Source - Smart Money

Colour

The Taliban Responds

In the name of God, the Merciful, the Compassionate.

وَمِنَ النَّاسِ مَن يُعْجِبُكَ قَوْلُهُ فِي الْحَيَاةِ الدُّنْيَا وَيُشْهِدُ اللَّهَ عَلَى مَا فِي قَلْبِهِ وَهُوَ أَلَدُّ الْخِصَامِ (البقرة:204)

US President Obama has been trying to restore the dignity and credibility that America has lost since his election (as US president). Now he has turned to the Muslim world. Besides other preparations for this visit, the western media has been trying to mentally prepare Muslims for Obama`s speech for some weeks. The contents of the speech, which he delivered under the title “Address to the Muslim World” on Thursday afternoon (4 June) in Cairo, did not have anything which could play a crucial role in reducing the hatred between America and Muslims. Obama`s speech lasted for 48 minutes. However, he failed to deliver a clear and true message to the Muslim world. Obama`s speech mainly consisted of symbolic and political terms and its body was vague. Contrary to expectations, there was no sign of practical change in the hostile policy of America towards Muslims. The Supreme Council of the Islamic Emirate of Afghanistan regards Obama`s speech to the Muslim world as part of the US` misleading slogans and gives the following explanations about it:

1. Barack Obama claims good-will and tolerance towards Muslims at a time when their occupation forces are committing mass murder and disturbing and imprisoning Muslims in Afghanistan and Iraq. They violate their legal rights and mercilessly martyr them to defend their rights. They put them in the most hateful prisons of the world. Given these wild and illegal actions by Americans, Obama`s baseless speech has no importance.

2. As a groundless claimant, Barack Obama justified the occupation of Afghanistan and Iraq by Americans in his meaningless speech. He said the ongoing efforts of their crusader forces against the Muslim nations of these countries were a legitimate struggle to secure US interests. According to national and international laws, the occupation of independent countries and hostile war against their free nations cannot be called a legitimate war.

3. Barack Obama wants to create divisions among Muslims and the Muslim world and to separate Muslims from their real protectors and defence force (mojaheddin) (as published) in line with his hostile policy through such speeches. These Muslim nations have willingly trained and strengthened them (mojaheddin) with their support. He is trying to create divisions among Muslims and to exploit the divisions among them. However, the religious beliefs and relations of Muslims are not so weak that they can be broken by a few words of the supreme commander of the occupation forces like Obama. Today, all vigilant Muslims are engaged in jihad in one way or the other. Therefore, the US war against the mojaheddin is considered a war against all Muslim nations and Islam.

4. He claimed that Americans were not trying to permanently remain and establish military bases inside Afghanistan in Islamic countries like Iraq and Afghanistan and that it did not want to betray the nations of the world. This claim runs counter to the current facts and realities in the region because Americans are currently busy establishing major military bases and airports. They have established 12 new military airports. Some of them are very large where any kind of large military planes can land. This large number of airports and countless number of military bases are established at a time when they do not need even half of them given the number of their forces and daily military flights. This shows that Americans are intending to permanently remain in and occupy the region. Therefore, it is sending additional forces to the region. The countries and nations of the world, particularly the region should stay vigilant to foil their destructive plans in a timely fashion.

5. Obama said that the continuation of war in Afghanistan was costly and politically difficult for him and, therefore, if peace is ensured in the region, American forces will happily leave Afghanistan. It is quite funny that he links the end to the US occupation to the restoration of security in the region. The presence of Americans is the main cause of violence and the current problems in the region. Jihad and resistance against American forces will continue as long as they are present in Afghanistan. If Obama truly wants peace to be ensured in Afghanistan and the region, he should put an end to the (US) military presence and illegal occupation to pave the way for restoration of security. If foreign forces leave (Afghanistan), Afghans will have no intention to harm anyone. No one can use Afghanistan`s soil against the international community.

6. The issues of Middle East, particularly Palestine, were also part of Obama`s address. In his address to the Muslim world, he tried to change the mindset of Muslims (Pashto: la sara warozi) regarding Israelis. He emotionally started the story of the innocence of the Jews. He described Israel as the most innocent and worthy nation of the world and that Muslims, particularly Palestinians, should officially recognize it. He spoke on the holocaust and the massacre of 6m Jews. However, he summarized the nearly 70-year crises in Palestine in a few misleading words. Mass murders are committed every moment (in Palestine). He also instructed Arab leaders to improve their ties with Israel. However, he did not speak about those surrounded in Gaza or about the supply of medicines and basic food items to them. It seems that Obama did not come to the Muslim world with a friendly message, but with an arrogant notion to give instructions (to the Muslim world). He told Muslims what they should do in order to secure the interests of America and Israel. The Islamic Emirate of Afghanistan believes that Muslims` hatred will steadily rise towards America until a fundamental and true solution is found to these problems and practical steps are taken. This speech by Obama is another failed attempt to mislead the Muslim world. We call on the entire Muslim nation, particularly the oppressed (Pashto: mostazafo) Muslims to stress continuation of jihad against Americans to defend their soil and religious places. They should fight the infidel forces until they achieve their real freedom and independence.

It is worth pointing out that US President Barack Hasayn Obama delivered a long speech, entitled “A New Beginning” in the capital of Egypt, Cairo, yesterday (4 June) in which he stressed the fight against the Taleban and Al-Qa`idah in Afghanistan. By reading out a few verses from the Koran, he tried to persuade Muslims of the world that the ongoing US war is not against Islam, but terrorists. A number of Islamic countries and organizations have called Obama`s speech a positive step. However, a number of Islamic organizations of the world are suspicious of his intentions. Obama became the US president on 20 January 2009. He said he would change the international mindset regarding America during his election campaign. However, no practical step has been taken yet to truly change the world`s, particularly Muslims`, mindset about America because there are still US forces in Afghanistan and Iraq, and people are being killed daily there. Observers believe that America should take practical steps on Afghanistan and Iraq to ensure peace in the region and help people achieve their independence and freedom in practice.

The Supreme Council of Islamic Emirate of Afghanistan

May God give us strength.

Source - Information Clearing House

Yaay

Coconut Oil

In the past several years, coconut oil has become a sort of rising star in the world of health food. More and more homes have a jar of organic extra virgin coconut oil on their pantry shelf. But coconut oil is more than a healthy cooking alternative. There are endless ways to use coconut oil that extend far beyond the occasional cookie or stir-fry. Here are twelve creative uses for a classic health food:

Colds and Sore Throats - Coconut oil has antimicrobial properties that can help you recover from a cold. Mix it with warm tea and honey for a very soothing throat remedy.

Cuts and Scrapes - Coconut oil can be used as a topical cream for common cuts and scrapes, protecting against infection while conditioning the skin to heal faster. It may also prevent scarring.

Dandruff - Several times per week, coat your fingertips with coconut oil and massage it into your scalp for an easy dandruff cure. This is an effective yet gentle method, suitable for young children or babies with cradle cap, too.

Deodorant - You can use coconut oil by itself as a deodorant that leaves underarms feeling silky soft, or you can add baking soda and cornstarch for advanced odor protection.

Detoxification - There are many methods for detoxifying the body, but coconut oil is unique because it can provide energy while cleansing the body. One popular method is to take 1-2 tablespoon of coconut oil seven times per day for one to seven days to cleanse the body from toxins, impurities and candida.

Fungal Infections - Coconut oil contains strong antifungal agents, and can be used to treat fungal infections like athlete's foot, ringworm, thrush and vaginal yeast infections. You can use it internally and topically for these conditions.

Hair Conditioner - Apply a thin layer of coconut oil to your scalp and hair. Allow it to soak for several minutes and then wash as usual. There is no need to use other conditioners with this method, even after washing with shampoo.

Lip Balm - Lip moisturizers are filled with chemicals, and natural products are often pricey. If you need a moisturizer for your lips, try coconut oil in a commercial lip balm container.

Make-up Remover - Coconut oil is a very effective make-up remover, so you can toss out all the chemical-laden products from the drug store. It's also a natural moisturizer, so it won't cause dryness or irritation.

Skin Conditions - Since coconut oil is moisturizing, antimicrobial, antifungal and anti-inflammatory, it's a great natural remedy for all kinds of skin problems ranging from eczema to acne to diaper rash.

Sun screen - Coconut oil provides effective and natural sun protection without exposing your body to the toxic chemicals and metals in conventional sun block. Coconut oil protects against free radicals, which provides added protection against skin cancer.

Toothpaste - Mix an equal amount of coconut oil and baking soda for an all-natural, fluoride-free toothpaste. Add spearmint or peppermint oil with stevia for a fresh, sweet flavor.

Source - Natural News

Nuzzle

Reject GM Crops

On May 19th, the American Academy of Environmental Medicine (AAEM) called on “Physicians to educate their patients, the medical community, and the public to avoid GM (genetically modified) foods when possible and provide educational materials concerning GM foods and health risks.”[1] They called for a moratorium on GM foods, long-term independent studies, and labeling. AAEM’s position paper stated, “Several animal studies indicate serious health risks associated with GM food,” including infertility, immune problems, accelerated aging, insulin regulation, and changes in major organs and the gastrointestinal system. They conclude, “There is more than a casual association between GM foods and adverse health effects. There is causation,” as defined by recognized scientific criteria. “The strength of association and consistency between GM foods and disease is confirmed in several animal studies.”

More and more doctors are already prescribing GM-free diets. Dr. Amy Dean, a Michigan internal medicine specialist, and board member of AAEM says, “I strongly recommend patients eat strictly non-genetically modified foods.” Ohio allergist Dr. John Boyles says “I used to test for soy allergies all the time, but now that soy is genetically engineered, it is so dangerous that I tell people never to eat it.”

Dr. Jennifer Armstrong, President of AAEM, says, “Physicians are probably seeing the effects in their patients, but need to know how to ask the right questions.” World renowned biologist Pushpa M. Bhargava goes one step further. After reviewing more than 600 scientific journals, he concludes that genetically modified organisms (GMOs) are a major contributor to the sharply deteriorating health of Americans.

Pregnant women and babies at great risk

Among the population, biologist David Schubert of the Salk Institute warns that “children are the most likely to be adversely effected by toxins and other dietary problems” related to GM foods. He says without adequate studies, the children become “the experimental animals.”[2]

The experience of actual GM-fed experimental animals is scary. When GM soy was fed to female rats, most of their babies died within three weeks—compared to a 10% death rate among the control group fed natural soy.[3] The GM-fed babies were also smaller, and later had problems getting pregnant.[4]

When male rats were fed GM soy, their testicles actually changed color—from the normal pink to dark blue.[5] Mice fed GM soy had altered young sperm.[6] Even the embryos of GM fed parent mice had significant changes in their DNA.[7] Mice fed GM corn in an Austrian government study had fewer babies, which were also smaller than normal.[8]

Reproductive problems also plague livestock. Investigations in the state of Haryana, India revealed that most buffalo that ate GM cottonseed had complications such as premature deliveries, abortions, infertility, and prolapsed uteruses. Many calves died. In the US, about two dozen farmers reported thousands of pigs became sterile after consuming certain GM corn varieties. Some had false pregnancies; others gave birth to bags of water. Cows and bulls also became infertile when fed the same corn.[9]

In the US population, the incidence of low birth weight babies, infertility, and infant mortality are all escalating.

Food designed to produce toxin

GM corn and cotton are engineered to produce their own built-in pesticide in every cell. When bugs bite the plant, the poison splits open their stomach and kills them. Biotech companies claim that the pesticide, called Bt—produced from soil bacteria Bacillus thuringiensis—has a history of safe use, since organic farmers and others use Bt bacteria spray for natural insect control. Genetic engineers insert Bt genes into corn and cotton, so the plants do the killing.

The Bt-toxin produced in GM plants, however, is thousands of times more concentrated than natural Bt spray, is designed to be more toxic,[10] has properties of an allergen, and unlike the spray, cannot be washed off the plant.

Moreover, studies confirm that even the less toxic natural bacterial spray is harmful. When dispersed by plane to kill gypsy moths in the Pacific Northwest, about 500 people reported allergy or flu-like symptoms. Some had to go to the emergency room.[11],[12]

The exact same symptoms are now being reported by farm workers throughout India, from handling Bt cotton.[13] In 2008, based on medical records, the Sunday India reported, “Victims of itching have increased massively this year . . . related to BT cotton farming.”[14]

GMOs provoke immune reactions

AAEM states, “Multiple animal studies show significant immune dysregulation,” including increase in cytokines, which are “associated with asthma, allergy, and inflammation”—all on the rise in the US.

According to GM food safety expert Dr. Arpad Pusztai, changes in the immune status of GM animals are “a consistent feature of all the studies.”[15] Even Monsanto’s own research showed significant immune system changes in rats fed Bt corn.[16] A November 2008 by the Italian government also found that mice have an immune reaction to Bt corn.[17]

GM soy and corn each contain two new proteins with allergenic properties,[18] GM soy has up to seven times more trypsin inhibitor—a known soy allergen,[19] and skin prick tests show some people react to GM, but not to non-GM soy.[20] Soon after GM soy was introduced to the UK, soy allergies skyrocketed by 50%. Perhaps the US epidemic of food allergies and asthma is a casualty of genetic manipulation.

Animals dying in large numbers

In India, animals graze on cotton plants after harvest. But when shepherds let sheep graze on Bt cotton plants, thousands died. Post mortems showed severe irritation and black patches in both intestines and liver (as well as enlarged bile ducts). Investigators said preliminary evidence “strongly suggests that the sheep mortality was due to a toxin. . . . most probably Bt-toxin.”[21] In a small follow-up feeding study by the Deccan Development Society, all sheep fed Bt cotton plants died within 30 days; those that grazed on natural cotton plants remained healthy.

In a small village in Andhra Pradesh, buffalo grazed on cotton plants for eight years without incident. On January 3rd, 2008, the buffalo grazed on Bt cotton plants for the first time. All 13 were sick the next day; all died within 3 days.[22]

Bt corn was also implicated in the deaths of cows in Germany, and horses, water buffaloes, and chickens in The Philippines.[23]

In lab studies, twice the number of chickens fed Liberty Link corn died; 7 of 20 rats fed a GM tomato developed bleeding stomachs; another 7 of 40 died within two weeks.[24] Monsanto’s own study showed evidence of poisoning in major organs of rats fed Bt corn, according to top French toxicologist G. E. Seralini.[25]

Worst finding of all—GMOs remain inside of us

The only published human feeding study revealed what may be the most dangerous problem from GM foods. The gene inserted into GM soy transfers into the DNA of bacteria living inside our intestines and continues to function.[26] This means that long after we stop eating GMOs, we may still have potentially harmful GM proteins produced continuously inside of us. Put more plainly, eating a corn chip produced from Bt corn might transform our intestinal bacteria into living pesticide factories, possibly for the rest of our lives.

When evidence of gene transfer is reported at medical conferences around the US, doctors often respond by citing the huge increase of gastrointestinal problems among their patients over the last decade. GM foods might be colonizing the gut flora of North Americans.

Warnings by government scientists ignored and denied

Scientists at the Food and Drug Administration (FDA) had warned about all these problems even in the early 1990s. According to documents released from a lawsuit, the scientific consensus at the agency was that GM foods were inherently dangerous, and might create hard-to-detect allergies, poisons, gene transfer to gut bacteria, new diseases, and nutritional problems. They urged their superiors to require rigorous long-term tests.[27] But the White House had ordered the agency to promote biotechnology and the FDA responded by recruiting Michael Taylor, Monsanto’s former attorney, to head up the formation of GMO policy. That policy, which is in effect today, denies knowledge of scientists’ concerns and declares that no safety studies on GMOs are required. It is up to Monsanto and the other biotech companies to determine if their foods are safe. Mr. Taylor later became Monsanto’s vice president.

Dangerously few studies, untraceable diseases

AAEM states, “GM foods have not been properly tested” and “pose a serious health risk.” Not a single human clinical trial on GMOs has been published. A 2007 review of published scientific literature on the “potential toxic effects/health risks of GM plants” revealed “that experimental data are very scarce.” The author concludes his review by asking, “Where is the scientific evidence showing that GM plants/food are toxicologically safe, as assumed by the biotechnology companies?”[28]

Famed Canadian geneticist David Suzuki answers, “The experiments simply haven’t been done and we now have become the guinea pigs.” He adds, “Anyone that says, ‘Oh, we know that this is perfectly safe,’ I say is either unbelievably stupid or deliberately lying.”[29]

Dr. Schubert points out, “If there are problems, we will probably never know because the cause will not be traceable and many diseases take a very long time to develop.” If GMOs happen to cause immediate and acute symptoms with a unique signature, perhaps then we might have a chance to trace the cause.

This is precisely what happened during a US epidemic in the late 1980s. The disease was fast acting, deadly, and caused a unique measurable change in the blood—but it still took more than four years to identify that an epidemic was even occurring. By then it had killed about 100 Americans and caused 5,000-10,000 people to fall sick or become permanently disabled. It was caused by a genetically engineered brand of a food supplement called L-tryptophan.

If other GM foods are contributing to the rise of autism, obesity, diabetes, asthma, cancer, heart disease, allergies, reproductive problems, or any other common health problem now plaguing Americans, we may never know. In fact, since animals fed GMOs had such a wide variety of problems, susceptible people may react to GM food with multiple symptoms. It is therefore telling that in the first nine years after the large scale introduction of GM crops in 1996, the incidence of people with three or more chronic diseases nearly doubled, from 7% to 13%.[30]

To help identify if GMOs are causing harm, the AAEM asks their “members, the medical community, and the independent scientific community to gather case studies potentially related to GM food consumption and health effects, begin epidemiological research to investigate the role of GM foods on human health, and conduct safe methods of determining the effect of GM foods on human health.”

Citizens need not wait for the results before taking the doctors advice to avoid GM foods. People can stay away from anything with soy or corn derivatives, cottonseed and canola oil, and sugar from GM sugar beets—unless it says organic or “non-GMO.” There is a pocket Non-GMO Shopping Guide, co-produced by the Institute for Responsible Technology and the Center for Food Safety, which is available as a download, as well as in natural food stores and in many doctors’ offices.

If even a small percentage of people choose non-GMO brands, the food industry will likely respond as they did in Europe—by removing all GM ingredients. Thus, AAEM’s non-GMO prescription may be a watershed for the US food supply.

International bestselling author and independent filmmaker Jeffrey M. Smith is the Executive Director of the Institute for Responsible Technology and the leading spokesperson on the health dangers of GMOs. His first book, Seeds of Deception is the world’s bestselling book on the subject. His second, Genetic Roulette: The Documented Health Risks of Genetically Engineered Foods, identifies 65 risks of GMOs and demonstrates how superficial government approvals are not competent to find most of them. He invited the biotech industry to respond in writing with evidence to counter each risk, but correctly predicted that they would refuse, since they don’t have the data to show that their products are safe.

[1] http://www.aaemonline.org/gmopost.html

[2] David Schubert, personal communication to H. Penfound, Greenpeace Canada, October 25, 2002.

[3] Irina Ermakova, “Genetically modified soy leads to the decrease of weight and high mortality of rat pups of the first generation. Preliminary studies,” Ecosinform 1 (2006): 4–9.

[4] Irina Ermakova, “Experimental Evidence of GMO Hazards,” Presentation at Scientists for a GM Free Europe, EU Parliament, Brussels, June 12, 2007
[5] Irina Ermakova, “Experimental Evidence of GMO Hazards,” Presentation at Scientists for a GM Free Europe, EU Parliament, Brussels, June 12, 2007

[6] L. Vecchio et al, “Ultrastructural Analysis of Testes from Mice Fed on Genetically Modified Soybean,” European Journal of Histochemistry 48, no. 4 (Oct–Dec 2004):449–454.

[7] Oliveri et al., “Temporary Depression of Transcription in Mouse Pre-implantion Embryos from Mice Fed on Genetically Modified Soybean,” 48th Symposium of the Society for Histochemistry, Lake Maggiore (Italy), September 7–10, 2006.

[8] Alberta Velimirov and Claudia Binter, “Biological effects of transgenic maize NK603xMON810 fed in long term reproduction studies in mice,” Forschungsberichte der Sektion IV, Band 3/2008

[9] Jerry Rosman, personal communication, 2006

[10] See for example, A. Dutton, H. Klein, J. Romeis, and F. Bigler, “Uptake of Bt-toxin by herbivores feeding on transgenic maize and consequences for the predator Chrysoperia carnea,” Ecological Entomology 27 (2002): 441–7; and J. Romeis, A. Dutton, and F. Bigler, “Bacillus thuringiensis toxin (Cry1Ab) has no direct effect on larvae of the green lacewing Chrysoperla carnea (Stephens) (Neuroptera: Chrysopidae),” Journal of Insect Physiology 50, no. 2–3 (2004): 175–183.

[11] Washington State Department of Health, “Report of health surveillance activities: Asian gypsy moth control program,” (Olympia, WA: Washington State Dept. of Health, 1993).

[12] M. Green, et al., “Public health implications of the microbial pesticide Bacillus thuringiensis: An epidemiological study, Oregon, 1985-86,” Amer. J. Public Health 80, no. 7(1990): 848–852.

[13] Ashish Gupta et. al., “Impact of Bt Cotton on Farmers’ Health (in Barwani and Dhar District of Madhya Pradesh),” Investigation Report, Oct–Dec 2005.

[14] Sunday India, October, 26, 2008

[15] October 24, 2005 correspondence between Arpad Pusztai and Brian John

[16] John M. Burns, “13-Week Dietary Subchronic Comparison Study with MON 863 Corn in Rats Preceded by a 1-Week Baseline Food Consumption Determination with PMI Certified Rodent Diet #5002,” December 17, 2002 http://www.monsanto.com/monsanto/content/sci_tech/prod_safety/fullratstudy.pdf

[17] Alberto Finamore, et al, “Intestinal and Peripheral Immune Response to MON810 Maize Ingestion in Weaning and Old Mice,” J. Agric. Food Chem., 2008, 56 (23), pp 11533–11539, November 14, 2008

[18] See L Zolla, et al, “Proteomics as a complementary tool for identifying unintended side effects occurring in transgenic maize seeds as a result of genetic modifications,” J Proteome Res. 2008 May;7(5):1850-61; Hye-Yung Yum, Soo-Young Lee, Kyung-Eun Lee, Myung-Hyun Sohn, Kyu-Earn Kim, “Genetically Modified and Wild Soybeans: An immunologic comparison,” Allergy and Asthma Proceedings 26, no. 3 (May–June 2005): 210-216(7); and Gendel, “The use of amino acid sequence alignments to assess potential allergenicity of proteins used in genetically modified foods,” Advances in Food and Nutrition Research 42 (1998), 45–62.

[19] A. Pusztai and S. Bardocz, “GMO in animal nutrition: potential benefits and risks,” Chapter 17, Biology of Nutrition in Growing Animals, R. Mosenthin, J. Zentek and T. Zebrowska (Eds.) Elsevier, October 2005

[20] Hye-Yung Yum, Soo-Young Lee, Kyung-Eun Lee, Myung-Hyun Sohn, Kyu-Earn Kim, “Genetically Modified and Wild Soybeans: An immunologic comparison,” Allergy and Asthma Proceedings 26, no. 3 (May–June 2005): 210-216(7).

[21] “Mortality in Sheep Flocks after Grazing on Bt Cotton Fields—Warangal District, Andhra Pradesh” Report of the Preliminary Assessment, April 2006, http://www.gmwatch.org/archive2.asp

[22] Personal communication and visit, January 2009.

[23] Jeffrey M. Smith, Genetic Roulette: The Documented Health Risks of Genetically Engineered Foods, Yes! Books, Fairfield, IA USA 2007

[24] Arpad Pusztai, “Can Science Give Us the Tools for Recognizing Possible Health Risks for GM Food?” Nutrition and Health 16 (2002): 73–84.

[25] Stéphane Foucart, “Controversy Surrounds a GMO,” Le Monde, 14 December 2004; referencing, John M. Burns, “13-Week Dietary Subchronic Comparison Study with MON 863 Corn in Rats Preceded by a 1-Week Baseline Food Consumption Determination with PMI Certified Rodent Diet #5002,” December 17, 2002 http://www.monsanto.com/monsanto/content/sci_tech/prod_safety/fullratstudy.pdf

[26] Netherwood et al, “Assessing the survival of transgenic plant DNA in the human gastrointestinal tract,” Nature Biotechnology 22 (2004): 2.

[27] See memos at www.biointegrity.org

[28] José Domingo, “Toxicity Studies of Genetically Modified Plants : A Review of the Published Literature,” Critical reviews in food science and nutrition, 2007, vol. 47, no8, pp. 721-733

[29] Angela Hall, “Suzuki warns against hastily accepting GMOs”, The Leader-Post (Canada), 26 April 2005.

[30] Kathryn Anne Paez, et al, “Rising Out-Of-Pocket Spending For Chronic Conditions: A Ten-Year Trend,” Health Affairs, 28, no. 1 (2009): 15-25

Source - Jeffrey M. Smith

Chill

Where Is Oil Headed?

Oil's surge to near $70 a barrel has stoked fresh debate about what's driving the market -- and where prices may be headed if the economy is turning up. Edward Silver, a former Times staff writer who keeps a close eye on the energy market, offers some context on the latest price action, and the global supply/demand equation:

The world consumes 30 billion barrels of oil a year. Without it, our food doesn’t make it to the supermarket and our flights to Hawaii are grounded. Too bad the price is set by such a moody bunch.

Crude gained 3.2% to $68.44 a barrel in futures trading last week, but prices seesawed along the way. Again, bulls won the tussle. An $85-a-barrel yearend forecast from Goldman Sachs and more hints of economic recovery -- including surprising strength in Chinese manufacturing -- overshadowed flush oil stockpiles and other dismal data indicating a weak appetite in the United States, which still devours almost a quarter of global output.

Even before the economic signs turned more encouraging, oil was sizzling. Prices have more than doubled since crude visited the low-$30s in February. The falling dollar has helped, as some investors have turned to raw materials as a hedge against the greenback's slide.

Clearly, instability is in the DNA of our primary energy source. Only a year ago, oil was on an epic ascent, driven by exuberant traders to a peak of $147 a barrel in July. The industry was vilified. Priuses were sold out. Some analysts set targets of $200 a barrel.

Yet in short order, the recession and credit crunch rewrote the script for the rest of 2008. Those traders turned morose, vaporizing almost 80% of the commodity’s value in five chaotic months. Big oil companies and the petrostates of the world have been grappling with a surplus and paring production to shore up the market.

Demand for crude, however, is considerably less volatile than the price. Even as the rally unfolded this spring, commentators often repeated the view that higher prices made no sense because use of the fuel had collapsed. But "collapsed" doesn’t describe a world market that will shrink a measly 3% this year to 83.2 million barrels a day, according to the International Energy Agency.

Though fewer Americans took long car trips over Memorial Day weekend, China’s 8-million-barrel-a-day habit will see a dent of only 70,000 a day this year, the IEA says. In fact, the Asian giant burned more oil this April than last April. And all those tankers filled with surplus crude that bearish observers point out? Combined, these floating warehouses hold just over a single day’s worth of global use.

Wall Street, bullish oil traders and the Obama administration all are betting that the U.S. economy will look better in the second half than in the first half, of course. In its mid-May report, the Energy Department assumes the beginnings of a recovery in consumption. It forecasts only a slight pullback in U.S. oil use this year, to 18.9 million barrels a day from 19.4 million in 2008,and an uptick in 2010.

Even if U.S. oil demand doesn't rebound -- and greener cars, biofuels and conservation measures boost the chance that it won't -- the action is in the developing world. Masses continue to leave the land for the cities, where they become bona fide fossil fuel consumers. Fortunately or unfortunately, entrepreneurs and governments are trying to make that status affordable for them. Tata Motors, for its part, intends to put India’s Everyman behind the wheel of its $2,000 Nano car.

An internal-combustion engine in every Asian garage? To put it mildly, that would more than make up for the gas Americans didn’t use over Memorial Day.

Where the crude will come from to satisfy these new wants is a puzzle. Most of the cheap and easy oil has been extracted. For much of this decade, when demand already was pushing the supply envelope, drillers ventured into fields and waters that required high expense and high technology to yield their riches. Now, many of those projects have shut down.

At the same time, OPEC has taken oil off the market, and some analysts believe worldwide drilling has dwindled more than 30% from a year ago. On the face of it, that seems out of whack with the modest scale of the current oversupply, and could worsen a squeeze in the years ahead.

Even a glut doesn’t change the nature of a finite resource -- just how fast it’s depleted. One reason oil companies journeyed to second-tier sources is that formerly prolific fields are drying up. The most spectacular example: Mexico’s relatively young Cantarell field. Only a few years ago, it provided more than 2 million barrels a day, but 2009 estimates have tumbled into the 600,000 range.

If the realities of geology are disturbing, geopolitics present another kind of risk. In Nigeria, a guerrilla war poses a chronic threat to exports, and saber rattling in the direction of Iran still dependably hikes the price of crude.

Thinking about the future puts oil's price swings in better perspective. Few commodities are as vital, and none are as problematic. (Does that make it priceless, or worthless?) To investors seeking a natural or "fair" value for the stuff, wake up and smell the exhaust: As a practical matter, there is none, largely because of all the uncertainties in the outlook. And if there were, the momentum players who rule this murky market would pay it no mind.

But this much seems clear: The move from $33 to $68 a barrel -- during a time of surplus -- offers just a whiff of what will happen when supply tightens up again. If the recession passes and scarcity sets in, the return of energy angst, here and around the globe, will make for giddy prices in the oil market.

Source - Los Angeles Times

Zero

China Seeks To Monopolize Global Resources

The Chinese acquisition of stakes in Australian rare earth miners Lynas Corporation and Arafura Resources has “caught the rest of the world sleeping,” said Rod McIllree, managing director at Australian-based Greenland Minerals & Energy (GME).

Following two acquisitions in the past six months for an aggregate USD 163m, Korean, Japanese and Western players may find themselves locked out of the sector, McIllree told mergermarket. Speculation is rife as to what this may mean for the high tech and green industries that rely on rare earth metal resources. With over 90% of the global rare earth resource held by Chinese companies, the country’s monopoly looks unchallenged. The recent Australian acquisitions have brought China control of the majority of the rare earth deposits outside China.

Rare Earth metals are a collection of 17 different metals that occur within the same ore deposits. While China currently produces 95% of the worlds rare earth supply, the metals are also found in the US, Indonesia, Australia and South Africa. Rare earth metals are needed for the manufacturing of wind turbines, plasma televisions, mobile phones, hybrid car batteries meaning the Chinese monopoly could shift the high-tech manufacturing industry bases from Japan and Korea to China.

Acquisitions of Australian rare earth miners are strongly backed by the Chinese Government, a China-based industrial banker said. Since 2004, or even earlier, the Chinese government has treated rare earth resources as strategic. In order to protect the resources available to China, the government employs a three-pronged strategy; rare earth exports are restricted, imports encouraged, and outbound rare earth acquisitions actively encouraged.

GME’s Rod McIllree, said the recent Chinese acquisitions highlighted the importance of the industry. With its multi-commodity ore body, GME is one of the last independent rare earth miners. Companies like GME that lack multi-commodity ore bodies including minerals such as iron ore alongside rare earths will find it hard to operate outside of China’s influence because most of the technology needed for refinement is only produced in China, he said. Japanese, US and European players now face higher barriers to entry which may prevent them from regaining a foothold.

However, Australian-based Lynas, despite now being majority owned by China Nonferrous Metal Mining Co (CNMC), will not sell resources exclusively to China, Vice President Matthew James said. CNMC is on board as an investor, not a buyer of rare earth; it differs in operation to Chinalco, James noted.

Arafura, which recently sold a stake to East China Exploration (ECE), was unavailable for comment.

Japanese and Korean players voice fears

The Chinese Government’s protective moves over rare earth are likely to impact Korean high-tech industries in the next couple of years, said Daehyun Kim, chief executive of Saebo Energy, the privately-held Korean rare earths material developer.

The technology gap between Korean high-tech companies and their Chinese peers is expected to close in four or five years. Moreover, China’s export quota and pricing policies will place significant pressure on Korean companies who will find their competitive prices at stake when faced with rising competition from China in the global market, Kim added

Unlike large, Korean electronic products makers such as Samsung and LG, small to medium sized businesses in Korea would suffer from limited supply or higher prices of rare earth resources. Samsung and LG have been purchasing rare earth from Japanese suppliers which boast top-tier technology for rare earth extraction. These two industry giants, at least, can afford the high prices commanded by Japanese suppliers

The South Korean Government must secure rare earth resources and invest in the development of extraction technologies if it wants to ensure the competitiveness of Korea’s hi-tech industries, Kim said.

The current economic downturn presents an attractive opportunity for Japanese firms to invest in rare metal mining rights, industry and government sources said. However, privately-owned Japanese companies are at a disadvantage when competing with state-owned Chinese companies. The Chinese have easy access to government capital while the risk assessment for a Japanese company can take much longer. Additionally, the Chinese government, in its determination to increase rare earth resources, is also less risk averse.

A source at Sojitz, a leader in rare metal imports, agreed that the Japanese companies are unable to compete. Unlike the worry-free Chinese, listed Japanese trading and mining companies have to consider the impact on their share price if they overpay for assets.

Rare earth prices have been on the increase again since this March, having fallen 50% year on year, making the assets attractive assuming the economy improves. While the government-owned Japan Bank for International Development will guarantee project financing, the difficulty lies in assessing the right price. Asset valuations for metals such as nickel have been driven up by Chinese acquisitions rather than demand, the Sojitz source noted.

Japanese Government-owned institutions are watching with concern as the Chinese Government-owned companies continue their shopping spree in countries like Australia, sources at Japan Oil, Gas and Metals National Corporation (JOGMEC) said. JOGMEC, which finances prospection and exploration projects, is actively seeking to support Japanese companies that want to invest in natural resources which will supply to Japanese industry. JOGMEC, whose budget increased to over JPY 30bn this year, prefers to invest in low risk countries like Australia but investments will have to be made where the deposits were found.

A source at Nippon Export and Investment Insurance (NEXI), which provides insurance on foreign investments made by Japanese companies, echoed JOGMEC’s concerns. While the Japanese Government’s financial aid is welcome, it will not be enough to help the Japanese compete effectively with their Chinese peers. NEXI does not have a fixed budget. It is willing take on a portion of the project financing risk by providing insurance not only on project financing but also for natural resource deposits and against country risk for up to 15 years.

However, those defending the Chinese position argue that one of the purposes of the Chinese acquirers of rare earth in Australian is to serve their Korean and Japanese clients because China has restrictions on rare earth and other resource exports. More generally, they note that while in the past Chinese companies had been out-bid by cash-rich Japanese bidders, the situation has now reversed because the Chinese government has now recognized its need to purchase overseas resources.

China relentless

Chinese outbound acquisitions or co-development of overseas rare earth mines is encouraged and guided by the Chinese Government, said a source at Inner Mongolia Baotou Steel Rare Earth Hi-tech [Bao Gang Xi Tu], one of China’s largest rare earth mine developers. Acquisition financing can be raised through state-owned banks, guaranteed by the Government.

Rare earth mines in Australia are prime targets given their quality and the nation’s low risk profile. The rare earth arm of Baotou signed an agreement with Arafura to co-develop an Australian rare earths mine at Nolans in late 2008.

Although China is home to the largest rare earth reserves in the world, it is still actively seeking chances to acquire overseas mines, a Chinese based analyst said. The purpose is to assure resources for the green energy, high-tech and defense industries. China is not the only country aggressively seeking to expand its rare earths resources; the US and Russia have similar policies, the analyst noted; the only difference is that China is leading the race.

Source - Financial Times

Dialogue

Goodbye, GM

I write this on the morning of the end of the once-mighty General Motors. By high noon, the President of the United States will have made it official: General Motors, as we know it, has been totaled.

As I sit here in GM's birthplace, Flint, Michigan, I am surrounded by friends and family who are filled with anxiety about what will happen to them and to the town. Forty percent of the homes and businesses in the city have been abandoned. Imagine what it would be like if you lived in a city where almost every other house is empty. What would be your state of mind?

It is with sad irony that the company which invented "planned obsolescence" -- the decision to build cars that would fall apart after a few years so that the customer would then have to buy a new one -- has now made itself obsolete. It refused to build automobiles that the public wanted, cars that got great gas mileage, were as safe as they could be, and were exceedingly comfortable to drive. Oh -- and that wouldn't start falling apart after two years. GM stubbornly fought environmental and safety regulations. Its executives arrogantly ignored the "inferior" Japanese and German cars, cars which would become the gold standard for automobile buyers. And it was hell-bent on punishing its unionized workforce, lopping off thousands of workers for no good reason other than to "improve" the short-term bottom line of the corporation. Beginning in the 1980s, when GM was posting record profits, it moved countless jobs to Mexico and elsewhere, thus destroying the lives of tens of thousands of hard-working Americans. The glaring stupidity of this policy was that, when they eliminated the income of so many middle class families, who did they think was going to be able to afford to buy their cars? History will record this blunder in the same way it now writes about the French building the Maginot Line or how the Romans cluelessly poisoned their own water system with lethal lead in its pipes.

So here we are at the deathbed of General Motors. The company's body not yet cold, and I find myself filled with -- dare I say it -- joy. It is not the joy of revenge against a corporation that ruined my hometown and brought misery, divorce, alcoholism, homelessness, physical and mental debilitation, and drug addiction to the people I grew up with. Nor do I, obviously, claim any joy in knowing that 21,000 more GM workers will be told that they, too, are without a job.

But you and I and the rest of America now own a car company! I know, I know -- who on earth wants to run a car company? Who among us wants $50 billion of our tax dollars thrown down the rat hole of still trying to save GM? Let's be clear about this: The only way to save GM is to kill GM. Saving our precious industrial infrastructure, though, is another matter and must be a top priority. If we allow the shutting down and tearing down of our auto plants, we will sorely wish we still had them when we realize that those factories could have built the alternative energy systems we now desperately need. And when we realize that the best way to transport ourselves is on light rail and bullet trains and cleaner buses, how will we do this if we've allowed our industrial capacity and its skilled workforce to disappear?

Thus, as GM is "reorganized" by the federal government and the bankruptcy court, here is the plan I am asking President Obama to implement for the good of the workers, the GM communities, and the nation as a whole. Twenty years ago when I made "Roger & Me," I tried to warn people about what was ahead for General Motors. Had the power structure and the punditocracy listened, maybe much of this could have been avoided. Based on my track record, I request an honest and sincere consideration of the following suggestions:

1. Just as President Roosevelt did after the attack on Pearl Harbor, the President must tell the nation that we are at war and we must immediately convert our auto factories to factories that build mass transit vehicles and alternative energy devices. Within months in Flint in 1942, GM halted all car production and immediately used the assembly lines to build planes, tanks and machine guns. The conversion took no time at all. Everyone pitched in. The fascists were defeated.

We are now in a different kind of war -- a war that we have conducted against the ecosystem and has been conducted by our very own corporate leaders. This current war has two fronts. One is headquartered in Detroit. The products built in the factories of GM, Ford and Chrysler are some of the greatest weapons of mass destruction responsible for global warming and the melting of our polar icecaps. The things we call "cars" may have been fun to drive, but they are like a million daggers into the heart of Mother Nature. To continue to build them would only lead to the ruin of our species and much of the planet.

The other front in this war is being waged by the oil companies against you and me. They are committed to fleecing us whenever they can, and they have been reckless stewards of the finite amount of oil that is located under the surface of the earth. They know they are sucking it bone dry. And like the lumber tycoons of the early 20th century who didn't give a damn about future generations as they tore down every forest they could get their hands on, these oil barons are not telling the public what they know to be true -- that there are only a few more decades of useable oil on this planet. And as the end days of oil approach us, get ready for some very desperate people willing to kill and be killed just to get their hands on a gallon can of gasoline.

President Obama, now that he has taken control of GM, needs to convert the factories to new and needed uses immediately.

2. Don't put another $30 billion into the coffers of GM to build cars. Instead, use that money to keep the current workforce -- and most of those who have been laid off -- employed so that they can build the new modes of 21st century transportation. Let them start the conversion work now.

3. Announce that we will have bullet trains criss-crossing this country in the next five years. Japan is celebrating the 45th anniversary of its first bullet train this year. Now they have dozens of them. Average speed: 165 mph. Average time a train is late: under 30 seconds. They have had these high speed trains for nearly five decades -- and we don't even have one! The fact that the technology already exists for us to go from New York to L.A. in 17 hours by train, and that we haven't used it, is criminal. Let's hire the unemployed to build the new high speed lines all over the country. Chicago to Detroit in less than two hours. Miami to DC in under 7 hours. Denver to Dallas in five and a half. This can be done and done now.

4. Initiate a program to put light rail mass transit lines in all our large and medium-sized cities. Build those trains in the GM factories. And hire local people everywhere to install and run this system.

5. For people in rural areas not served by the train lines, have the GM plants produce energy efficient clean buses.

6. For the time being, have some factories build hybrid or all-electric cars (and batteries). It will take a few years for people to get used to the new ways to transport ourselves, so if we're going to have automobiles, let's have kinder, gentler ones. We can be building these next month (do not believe anyone who tells you it will take years to retool the factories -- that simply isn't true).

7. Transform some of the empty GM factories to facilities that build windmills, solar panels and other means of alternate forms of energy. We need tens of millions of solar panels right now. And there is an eager and skilled workforce who can build them.

8. Provide tax incentives for those who travel by hybrid car or bus or train. Also, credits for those who convert their home to alternative energy.

9. To help pay for this, impose a two-dollar tax on every gallon of gasoline. This will get people to switch to more energy saving cars or to use the new rail lines and rail cars the former autoworkers have built for them.

Well, that's a start. Please, please, please don't save GM so that a smaller version of it will simply do nothing more than build Chevys or Cadillacs. This is not a long-term solution. Don't throw bad money into a company whose tailpipe is malfunctioning, causing a strange odor to fill the car.

100 years ago this year, the founders of General Motors convinced the world to give up their horses and saddles and buggy whips to try a new form of transportation. Now it is time for us to say goodbye to the internal combustion engine. It seemed to serve us well for so long. We enjoyed the car hops at the A&W. We made out in the front -- and the back -- seat. We watched movies on large outdoor screens, went to the races at NASCAR tracks across the country, and saw the Pacific Ocean for the first time through the window down Hwy. 1. And now it's over. It's a new day and a new century. The President -- and the UAW -- must seize this moment and create a big batch of lemonade from this very sour and sad lemon.

Yesterday, the last surviving person from the Titanic disaster passed away. She escaped certain death that night and went on to live another 97 years.

So can we survive our own Titanic in all the Flint Michigans of this country. 60% of GM is ours. I think we can do a better job.

Yours,
Michael Moore
MMFlint@aol.com