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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth -- Ignore unavailable to you. Want to Upgrade?


To: Kenneth E. Phillipps who wrote (78435)9/19/2006 8:30:14 PM
From: Hope Praytochange  Respond to of 173976
 
crude oil ??? Oil’s Rout Outpaces Its Advance
By CLIFFORD KRAUSS
HOUSTON, Sept. 18 — Michael Rose, the director of the energy trading desk at Angus Jackson in Fort Lauderdale, Fla., has made a lot of money for his clients by riding energy prices up the escalator of recent years.

But with fading risks of supply disruptions from things like a hurricane in the Gulf of Mexico or the rise in tensions with Iran, he started changing his position earlier this summer.

“Crude is coming down because it was way too high,” Mr. Rose said. “We had so much fear put into this market, that somewhere between 10 and 20 dollars were fear premium.”

“The reality is it is today’s market,’’ he added in an interview on Friday as crude oil traded at its lowest levels since March. “And today the weather is nice and the Iranians are lowering their aggressive posture.”

As crude oil prices have plunged about 18 percent over the last six weeks, from nearly $77 a barrel to less than $63 last week, many traders like Mr. Rose say they have been dumping and selling short stocks and futures contracts. In many cases, traders are betting against the very bets they made only a few weeks ago.

As a result, some of those with the biggest bets may be caught in the cross-fire, just as Amaranth Advisors, a big hedge fund, appears to have been blindsided by the sudden drop in the price of natural gas.

It is hard to know whether the reversal is just temporary or reflects something more lasting. Oil prices rebounded slightly on Monday after BP announced that production from its hurricane-damaged Thunder Horse oil platform, the largest in the Gulf of Mexico, would not start until 2008. Light crude oil for October delivery closed Monday at $63.82 a barrel, up 0.77 percent, on the New York Mercantile Exchange.

But for now, traders and hedge fund managers have been selling faster than they bought earlier this year. Some of the selling may be overshooting, as traders try to unwind their futures contracts. But speculation by energy traders that the price of oil is going down, or at least settling at lower levels than expected a few weeks ago, appears to be spreading.

“If you are one of these black-box guys, the market looks like it is in bad shape,” said William Wallace, a trader on Nymex for Man Financial. “I would not at all be surprised if we give up some more ground.”

There are several reasons for the changing market. Oil companies that built up their inventories as prices rose are beginning to release those excess supplies to customers. Tensions in the Middle East have eased. Economic growth may be slowing. New drilling in the Gulf of Mexico suggests there are large deepwater reserves that seismic technology will make possible to tap.

Perhaps most of all, the surprisingly calm weather this hurricane season has alleviated fears of another serious production disruption like the one that followed Hurricane Katrina a year ago.

Phil Flynn, a vice president and senior market analyst at the Alaron Trading Corporation, a brokerage firm in Chicago, said the big losses at Amaranth from the fall of natural gas prices should be a cautionary tale for other hedge funds that invest in commodities like oil and gas.

“There is always the possibility of a sell-off that could put a fund in trouble,” he said. “A lot of these funds are trading markets that are very volatile, and usually the higher the price that any market goes, the higher the risk of correction.”

Mr. Flynn noted that trading volume for natural gas and crude oil set record last Tuesday, as a lot of commodity funds and traders exited positions before their options contracts became due on Friday and as they anticipated the expiration of the October futures contracts this week.

In a research note on Friday, Wells Capital Management predicted that oil prices would head for about $50 a barrel. “An oil crisis based on excessive oil dependence is hard to reverse, but one based on excessive risk premiums could quickly reverse,” it suggested.

The futures market can be fickle and those trading in it are still betting that prices next year will rise from current levels. The prices set for future delivery of a barrel of crude at different points next year average $67 to $68, and for 2008 the range is $69 to $70.

But traders note that the prices contracted for next summer now are about $12 below the delivery prices set only a few weeks ago.

Secretive and unregulated, and deploying proprietary trading systems, market speculators were blamed by some, including some oil industry executives, for driving prices higher than justified by supply-and-demand fundamentals.

Oil contracts held by hedge funds, the private firms run by traders who have large stakes in the risks and rewards of their clients, have doubled since 2001 as oil prices spiked. The growth in the number of big investors, like pension funds, in futures trading has led to large and rapid capital inflows into crude oil.

But traders say they were just responding to the uncertainty in the market and the fears that energy suppliers, already operating on a razor edge, might face a sudden disruption that would send prices sharply higher.

Still, the rise in oil prices from an average of $28 in 2003 has made commodity traders far superior performers than investors in the stock market. And for a while, that performance encouraged even more investors to pour even more money into oil futures.

Now some of the traders themselves wonder if they will drive prices too low by selling off once-profitable positions that are turning sour.

“On the way up, there is buying greed,” said Gary Pokoik, who manages Hedge Ventures Energy, a Los Angeles hedge fund. “And on the way down there is a selling panic. The drop could snowball.”

He added that the problems revealed at Amaranth could be repeated. “There is always a manager out there who uses a lot of leverage to make a call that goes sour,” he added. “When they are wrong, they get wiped out.”

Mr. Pokoik said that his modest-size fund, about $40 million, was tilted 70 percent toward long positions in energy stocks only two weeks ago, expecting prices to rise again. Now his portfolio is evenly split between long and short positions as he has begun to bet that stocks in the oil service sector will fall further.

For him the essential ingredient to energy price stability is good weather, with the possibility of more large drops in crude prices if the coming winter is warm.

Art Gelber, president of Gelber & Associates in Houston, a consulting firm that advises hedge funds, said there was a “change in psychology” in the oil market about two weeks ago right after Chevron announced the discovery of huge oil fields in deep waters of the Gulf of Mexico.

Even though those fields will not begin pumping oil for several years, he said “the fear of short supply due to Indian and Chinese demand as well as political instability has given way to optimism that we may have additional control over domestic supply.”

Traders, however, are also planning for the day when prices will rise again. “We will be long again when prices are a lot lower and Wall Street hates the group,” said Adam Newar, founder and manager of Eden Capital Management in Houston, a $220 million hedge fund that has been shorting a number of energy stocks the last four to six months.

But for the moment he is being cautious, taking careful bets on the other side of the action. “Oil,” he said, “can easily go into the 50’s here.”



To: Kenneth E. Phillipps who wrote (78435)9/20/2006 7:54:03 AM
From: Crimson Ghost  Respond to of 173976
 
What's Wrong With
American Foreign Policy?
In a word: Bush
What's wrong with American foreign policy is actually a lot more complicated than the subhead of this piece would have it, but I just couldn't resist the temptation: besides which, our president is a major cause – albeit not the only cause – of the dysfunction that afflicts us. A grand example of this is his recent speech to the United Nations General Assembly, in which he trotted out every neocon fantasy – and then some – in his effort to promote what he termed, on another occasion, his "global democratic revolution."

The remnants of the president's conservative fan club over at National Review, in the person of one Mario Loyola, hail Bush's oration as a triumph of "public diplomacy," but this kind of diplomacy is straight out of Bizarro World: it is designed, seemingly, to alienate the world's peoples, instead of drawing to them our banner and cause.

Off-putting right from the beginning, the president immediately launched into a reiteration of the 9/11 terrorist attacks – as if the rest of the world hadn't suffered equally, and then some, in the interim. How many have died in Iraq? They've suffered the equivalent of at least a dozen 9/11s, and probably far more. As if to add insult to injury, the president just had to drag in Lebanon:

"Since then, the enemies of humanity have continued their campaign of murder. Al-Qaeda and those inspired by its extremist ideology have attacked more than two dozen nations. And recently a different group of extremists deliberately provoked a terrible conflict in Lebanon. At the start of the 21st century, it is clear that the world is engaged in a great ideological struggle, between extremists who use terror as a weapon to create fear, and moderate people who work for peace."

Al-Qaeda may indeed have attacked more than two dozen nations, as the president avers, but these attacks pale, in terms of ferocity and casualties, in comparison to those launched by the U.S. We invaded a country – Iraq – that had never attacked us and represented no credible military threat either to us or to our allies. We also invaded Afghanistan, and that's another war we are losing – in part because, as even President Karzai, our ally, points out, we keep brutalizing those we have supposedly come to "liberate."

As for the president's remarks on Lebanon, he doesn't say who or what made the Lebanese conflict so "terrible," but the merciless cruelty of an Israeli assault that left thousands of unexploded cluster bombs in its wake was condemned by nearly every nation on earth – except, naturally, for the United States of America. That he dares even mention the word "extremism," while simultaneously sanctioning the virtual destruction of the Middle East's only Arab democracy on account of the kidnapping of a few Israeli soldiers, is another Bizarro World antic from the clown in chief.

Odder still is the president's conception of the "great ideological struggle" supposedly taking place between advocates of 9th century medievalism hiding in caves and the most powerful, the richest, and arguably still the freest country on earth, one with a combined "defense" budget that equals the budgets of the world's top 10 spenders on military items. Yes, it's true, the psychopathic cult of al-Qaeda and its allies "use terror as a weapon to create fear" – but so, in at least one important sense, does the Bush administration. This, after all, is the same administration that conjured visions of an Iraqi nuclear attack if we didn't invade and occupy that country with dispatch: "we cannot wait for the final proof, the smoking gun, that could come in the form of a mushroom cloud." The same people bullied Congress into passing the "PATRIOT" Act unread, and now maintain that unless we torture people halfway to death we'll live in the shadow of terror forever. If this isn't using terror as a weapon to create fear, then one wonders what would qualify.

The real howler, however, is the president's description of the other side of the ideological divide in this grand world-historical struggle: the "moderate people who work for peace." That's him and his friends in the War Party, in case you missed it. You know: those famous "moderates" in the White House and the upper civilian reaches of the Pentagon who want to effect a radical transformation of the Middle East, exporting "democracy" – at gunpoint – to a region that has no liberal tradition. Moderation is precisely what the makers of our foreign policy lack, and this is especially true, it seems, when it comes to the president, who, as I have said before, is more neoconish than the most radical neocons. Here, after all, is a man who once proclaimed

"It is the policy of the United States to seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world."

If that is "moderate," then I'm Richard Perle.

This self-designation of Bush and his fellow global revolutionaries as exemplars of moderation is a new tack, and the president tries it on for size with limited success:

"Algeria has held its first competitive presidential election, and the military remained neutral. The United Arab Emirates recently announced that half of the seats in its Federal National Council will be chosen by elections. Kuwait held elections in which women were allowed to vote and run for office for the first time. Citizens have voted in municipal elections in Saudi Arabia, in parliamentary elections in Jordan and Bahrain, and in multiparty presidential elections in Yemen and Egypt."

Let's take at least some of these presidential talking points one-by-one:

Algeria – Although widely touted in advance as a sterling example of the "democratization" trend supposedly inspired by Bush and his fellow ideologues, the sweeping "victory" by President Abdelaziz Bouteflika, longtime strongman and virtual dictator of the country, was viewed by many with deep suspicion, and the opposition immediately charged fraud. Pre-election polls showed El Presidente coming in around fourth place, so his stunning 85 percent vote total came as quite a surprise – although not to those hopeless cynics (er, realists), such as myself, who don't plan on seeing a Jeffersonian republic arise in the desert sands of North Africa anytime soon.
UAE – The United Arab Emirates is a federation of absolute monarchies, presided over by the emir in chief. The Federal National Council, which will now – yippee! – have half its members elected, instead of appointed by royal decree, is a purely consultative body. All power is safely ensconced in the hands of the emirs, chiefly the emir of Dubai.
Kuwait – So Kuwait held elections in which women were allowed to vote. Welcome to the 20th century, folks – but, hey, didn't the same thing occur in occupied Palestine, without much controversy? In Palestine, 139 women ran for office, with 52 getting elected to the lower branch of the legislature and two elevated to the higher chamber. Bush didn't mention this great advance for democracy, perhaps because Hamas came out the clear winner. And, yes, you could say that the victory of Hamas in Palestine was inspired by American actions in Iraq and elsewhere – albeit not in the way Bush means us to understand.
Which brings me to the utter disconnect between what Bush says and what his actions accomplish in the real world. He claims to champion the forces of "moderation," while launching a "global revolution" that rivals the dreams of Alexander, Napoleon, and Lenin all rolled into one. He claims to be fighting terrorism, even as his foreign policy – indeed, his every pronouncement on the subject – does more to recruit for the terrorist cause than all the propaganda put out by al-Qaeda since its founding. Without the invasion of Iraq, the occupation of Afghanistan, the blind support for Israel's rape of Lebanon, and the posturing, threats, and swaggering declarations of unremitting hostility aimed at Iran and Syria, al-Qaeda would be a small worldwide network of sociopathic ideologues, isolated from and largely hated by their Muslim brethren. Instead, bin Laden is a hero to millions of misguided people, due largely to George W. Bush's foreign policy of unrelenting aggression.

I won't go into the presidential hectoring of the various peoples of the region, mostly rhetorical boilerplate of the sort we've come to expect from White House speechwriters, except for this:

"To the people of Lebanon: Last year, you inspired the world when you came out into the streets to demand your independence from Syrian dominance. You drove Syrian forces from your country and you reestablished democracy. Since then, you have been tested by the fighting that began with Hezbollah's unprovoked attacks on Israel. Many of you have seen your homes and communities caught in crossfire. We see your suffering, and the world is helping you to rebuild your country, and helping you deal with the armed extremists who are undermining your democracy by acting as a state within a state. The United Nations has passed a good resolution that has authorized an international force, led by France and Italy, to help you restore Lebanese sovereignty over Lebanese soil. For many years, Lebanon was a model of democracy and pluralism and openness in the region – and it will be again."

Yes, some of the Lebanese people – with some very numerous exceptions – insisted Syrian troops exit, leaving the door wide open for the Israelis to re-invade, as they did about a year and a half later. Bush's blithering about Hezbollah's "unprovoked attack" must have had quite an impact on the Lebanese delegation, which was no doubt wondering about all those unprovoked Israeli attacks on civilian targets in Lebanon, including fuel tanks, electrical and water facilities, and residential areas (including Christian towns and villages). They weren't "caught in crossfire," but were deliberately targeted by the Israelis, who sought to make their point to all the peoples of the region by means of terror. And as for that "state within a state" the president denounces – it is Hezbollah, and not the UN or the U.S., that is rebuilding the ruined cities and villages of Lebanon. Finally, if the president is so eager to champion "Lebanese sovereignty over Lebanese soil," then why did he give the green light to Israeli aggression – and even rush military aid to the aggressors? If Lebanon becomes, once again, a model of democracy and pluralism in the region, it will be no thanks to this president and his foreign policy.

There is a distinctly Soviet – i.e., unconsciously comic, albeit sinister – tone to this presidential peroration. It has all the charm and grace of a Stalinist ode to the collective farm's new tractor, and the same respect for facts. Let the president warble on all he likes about the "progress" toward "democracy" being made in, say, Egypt – but anyone who follows these things knows perfectly well that the "elections" held there were a farce. The main rival to President Hosni Mubarak was jailed, and his followers beaten in the streets. Some "democracy"!

In this same spirit, Bush regales us with tales of the great "progress" being made in Iraq and Afghanistan, even as those two countries are ripped apart by rising anti-American insurgencies. It is, frankly, embarrassing to have to listen to an American president utter such nonsense aloud on the world stage, all the while preening and lecturing the assembled delegates as if he were some sort of Universal Hegemon, the Emperor of the Earth. If you're an American, the overweening arrogance of Bush's act is breathtakingly painful to watch. One dares not imagine how the rest of the world takes it.

Justin Raimondo



To: Kenneth E. Phillipps who wrote (78435)9/20/2006 8:46:27 AM
From: jlallen  Respond to of 173976
 
What falsehoods?

Be specific.

J.