So, at first, this post was provoked by the first article, in which the Saudis want compensation for the oil we fail to use. I found this absolutely outrages since it goes against the very idea of efficiency - what's the point in minimizing your consumption, if the money you pay are the same. Even if you don't pay them directly, but trough taxes, it's the same. It's disgusting and it's even more disgusting because it happens on such a major scale. We have the same problem in Bulgaria, with basic needs like electricity and water increasing their prices to compensate for improving insulation and efficiency, but this is a problem of a country still striving to become normal. But the request that Saudis make is much more than that - it's global! And even though their black-mailing isn't successful so far, the very idea that they put it forward and discuss it openly, is very worrying. Because it's simply wrong. Sure, we could compensate them if they don't have the means to change their income sources, but they make plenty of money selling oil. They can do everything they want, without any help, so why the fuck do they think we owe them even more money?! And anyway, it's like Microsoft wanting compensation from Linux users for not using Windows. It's ridiculous. You pay for what you need and use, not for what you don't need.
You think this is controversy, but wait there's more!
Like the earnings of the Federal Reserve during crisis. Is it just me that finds something wrong in this? Let's see, the whole world is on its knees, producers barely surviving, the banking system in USA needs tons of money to be saved and yet the Feds manage to earn billions? What kind of financial system exactly is this? Note the other news too - that price of stocks on the financial markets across the world drop, because of the eventual ban of risky investment by president Obama.
You remember my posts "health care or health joke?" ? What about the financial system we live in, is it normal? I'm not an economist, but in my mind, money are just a measure of the usefulness of your service to others. And the financial system is supposed to act like a healthy environment for your money, so that you and your money are safe, secure and well-fed and the society can continue functioning flawlessly. But what it turns out to be - a system in which the less paid you are, the more money it makes? The less secure the world, the richer it gets? And not only this, but obviously, the very idea of banning highly risky investments by big institutions, is shaking markets all over the world! You don't have to be a genius to know that something is very wrong here. It's like the system became a breathing organism, living according to its own rules, not necessarily compatible with ours . And that's true, of course, but the question is, are we happy with it or no? Is this the best we can come up with? I'm perfectly realist that in any system, someone will win/earn and someone will have to lose and will follow its own dynamics after getting enough density of resources. But for me, it's a measure of our civilization the efficiency of that system in terms of number of winners/number of losers + over all effect on human life. And so far, I'm not convinced this system is the best. It's like too many ghost appeared in it and they move uncontrollably (or maybe not) and such our money and our time and our energy, for the sake of the unknown beneficiary. And this isn't a conspiracy! It's reality. And this reality is under our control, if we want to change it. The question is do we want to?
P.S. More or less unrelated to this is the last article, in which the charges against the Blackwater guards who did a little carnage in Iraq were dismissed. So much about justice.
- Saudis Seek Payments for Any Drop in Oil Revenues
- Asia stocks slide on Obama plan
- Federal Reserve earned $45 billion in 2009
- Judge Drops Charges From Blackwater Deaths in Iraq
Saudis Seek Payments for Any Drop in Oil Revenues
By JAD MOUAWAD and ANDREW C. REVKIN, October 13, 2009Saudi Arabia is trying to enlist other oil-producing countries to support a provocative idea: if wealthy countries reduce their oil consumption to combat global warming, they should pay compensation to oil producers.
The oil-rich kingdom has pushed this position for years in earlier climate-treaty negotiations. While it has not succeeded, its efforts have sometimes delayed or disrupted discussions. The kingdom is once again gearing up to take a hard line on the issue at international negotiations scheduled for Copenhagen in December.
The chief Saudi negotiator, Mohammad al-Sabban, described the position as a “make or break” provision for the Saudis, as nations stake out their stance before the global climate summit scheduled for the end of the year.
“Assisting us as oil-exporting countries in achieving economic diversification is very crucial for us through foreign direct investments, technology transfer, insurance and funding,” Mr. Sabban said in an e-mail message.
Petroleum exporters have long used delaying tactics during climate talks. They view any attempt to reduce carbon dioxide emissions by developed countries as a menace to their economies.
Saudi Arabia is highly dependent on oil exports, which account for most of the government’s budget. Last year, when prices peaked, the kingdom’s oil revenue swelled by 37 percent, to $281 billion, according to Jadwa Investment, a Saudi bank. That was more than four times the 2002 level. At one point in 2008, the average gasoline price in the United States surpassed $4 a gallon.
A recent study by the International Energy Agency, which advises industrialized nations, found that the cumulative revenue of the Organization of the Petroleum Exporting Countries would drop by 16 percent from 2008 to 2030 if the world agreed to slash emissions, as opposed to the projection if there were no treaty.
But with oil projected to average $100 a barrel, the energy agency estimated that OPEC members would still earn $23 trillion over that period.
But not every oil-exporting country is falling in line with the Saudi position. Some have been trying a different approach that has earned the backing of environmental groups. For example, Ecuador, OPEC’s newest member, said last year that it was willing to freeze oil exploration in the Amazon forest if it got some financial rewards for doing so. source
Asia stocks slide on Obama plan
SINGAPORE (Reuters) - Asian stock markets skidded on Friday and commodity prices fell across the board after U.S. President Barack Obama proposed new restrictions on banks that spurred selling of risky assets.
European shares <.FTEU3> were also expected to fall on the proposals, which would prevent banks or financial institutions that own banks from investing in, owning or sponsoring a hedge fund or private equity fund.
The restrictions could limit leverage in the financial system and the role of risk-taking by hedge funds, but analysts said passage of the proposals in the U.S. congress was not assured and it was too early to read too much into the market reaction.
Commodity prices fell because the proposed U.S. regulations were seen as diminishing capital flows from banks, which have provided liquidity for investors.Oil and copper languished near four-week lows, gold flirted with a three-week low and platinum lost ground, while agricultural commodities sagged.
U.S. stocks fell as much as 2 percent overnight, the worst one-day percentage fall since October, as financial shares in particular were hit by Obama's plan.
The rules would also bar institutions from proprietary trading operations, unrelated to serving customers, for their own profit. These bets have been enormously profitable for the banks but can hold huge risks for the financial system if they go wrong.
Global markets had already recoiled in recent weeks on fears that Chinese demand would slow as Beijing taps the brakes on its roaring growth to stave off inflation and keep the economy from overheating.Mixed data from the United States, meanwhile, have fueled concerns that the pace of its economic recovery may be slowing, and that corporate profits may not be as strong as first expected this year. source
Federal Reserve earned $45 billion in 2009
The Federal Reserve made record profits in 2009, as its unconventional efforts to prop up the economy created a windfall for the government.
The Fed will return about $45 billion to the U.S. Treasury for 2009, according to calculations by The Washington Post based on public documents. That reflects the highest earnings in the 96-year history of the central bank. The Fed, unlike most government agencies, funds itself from its own operations and returns its profits to the Treasury.
The numbers are good news for the federal budget and a sign that the Fed has been successful, at least so far, in protecting taxpayers as it intervenes in the economy -- though there remains a risk of significant losses in the future if the Fed sells some of its investments or loses money on its stakes in bailed-out firms.
This turn of events comes as the banks that benefited from the Fed's actions are under the microscope. Starting at the end of the week, major banks are expected to announce significant earnings and employee bonuses.
As it happens, the Fed's earnings for the year will dwarf those of the large banks, easily topping the expected profits of Bank of America, Goldman Sachs and J.P. Morgan Chase combined.
Much of the higher earnings came about because of the Fed's aggressive program of buying bonds, aiming to push interest rates down across the economy and thus stimulate growth. By the end of 2009, the Fed owned $1.8 trillion in U.S. government debt and mortgage-related securities, up from $497 billion a year earlier. The interest income on those investments was a major source of Fed profits -- though that income comes with risks, as the central bank could lose money if it later sells those securities to reduce the money supply.
The Fed also made money on its emergency loans to banks and other firms and on special programs to prop up lending, such as one that supports credit cards, auto loans, and other consumer and business lending. Those programs impose interest and fees on participants, with the aim of ensuring that the Fed does not lose money.
The Fed also charges fees for operating the plumbing of the financial system, such as clearing checks and electronic payments between banks.
From its revenue, the Fed deducts operating expenses, such as employee salaries, then returns to the Treasury almost all of the earnings that remain. The largest previous refund to the Treasury was $34.6 billion, in 2007.
"This shows that central banking is a great business to be in, especially in a crisis," said Vincent Reinhart, a resident scholar at the American Enterprise Institute and a former Fed official. "You buy assets that have a nice yield, and your cost of funds is very low. The difference is profit."
Fed officials do not make policy with an eye toward maximizing profits. They are charged by law with managing the nation's money supply to keep employment high and prices stable, and earnings fluctuate depending on a wide range of factors as they pursue that goal. In the crisis, the central bank's policy has been to create money and use it to buy a wide variety of assets, which in turn pay interest.In effect, the unprecedented range of actions taken to address the crisis has made the Fed's balance sheet more like that of a private bank. A firm such as Bank of America takes money from depositors, whom it pays little or nothing in interest, and lends it out at significantly higher rates. The Fed, similarly, takes money that banks keep on deposit, at a rate of 0.25 percent, and lends it to the U.S. government by buying Treasury securities and, lately, to home buyers and other private borrowers though more exotic investments.
While that resulted in higher earnings in 2009, it exposes the Fed to more risks down the road. source
Judge Drops Charges From Blackwater Deaths in Iraq
By CHARLIE SAVAGEWASHINGTON — In a significant blow to the Justice Department, a federal judge on Thursday threw out the indictment of five former Blackwater security guards over a shooting in Baghdad in 2007 that left 17 Iraqis dead and about 20 wounded.
The judge cited misuse of statements made by the guards in his decision, which brought to a sudden halt one of the highest-profile prosecutions to arise from the Iraq war. The shooting at Nisour Square frayed relations between the Iraqi government and the Bush administration and put a spotlight on the United States’ growing reliance on private security contractors in war zones.
Investigators concluded that the guards had indiscriminately fired on unarmed civilians in an unprovoked and unjustified assault near the crowded traffic circle on Sept. 16, 2007. The guards contended that they had been ambushed by insurgents and fired in self-defense.
The mass shooting eventually led Iraq to insist, during negotiations on a new status of forces agreement in 2008, on a provision that eliminated immunity from Iraqi law for American contractors. source
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