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The Pentagong Show

The Pentagong Show
United State of Terror: Is Drone War Fair?

Wednesday, January 28, 2009

Capitalism is Criminality: POP go the weasels.

Agape World Inc. of Long Island, N.Y., and Carolina Development from Orange County, Ca. The two faux firms fleeced some 2,500 investors for over $430 million.

Valero Energy said it would close an entire US refinery this quarter as it slashes petrol production and sharply reduces capital spending to manage the economic slowdown, the Financial Times is reporting.

The biggest US refiner has 15 refineries across the country. It said that in addition to shutting its large Texas City refinery, it would close the fluid catalytic cracking unit, which primarily produces petrol, at its Corpus Christi East Plant.
“The sluggish economy is clearly a headwind against demand growth for refined products,’’ said Bill Klesse, Valero’s chairman and chief executive.

Valero Energy Corp (VLO.N) could permanently shut those of its 15 North American refineries it no longer wants to own but may not be able to sell in the current economic downturn, Chairman and Chief Executive Bill Klesse said on Tuesday.

"If you don't want them and you can't sell them, I guess the answer would be yes," Klesse said to an analyst who asked if undesirable refineries might be permanently shut.

Valero has identified its Memphis and Aruba refineries as plants it would like to sell.

Valero also cut its estimate for 2009 capital spending to $2.7bn from its previous estimate of $3.5bn. Analysts had been expecting more than $4bn in capital spending for 2009. The company said that the cut in planned expenditure would have an impact on discretionary projects at many of its refineries.

US drilling services company Rowan Companies Inc. announced today that the company is canceling the construction of one jackup and suspending the construction of two others. In an unscheduled report to investors, Rowan announced a plan to reduce the company's expenditures through newbuild plan revisions. These newbuild construction revisions have allowed Rowan to keep its estimated 2009 capex between $550 to $575 million.

Although, with the banking collapse being all the rage, and decoupling theories finally receiving their deserved scorn, with some left over for the debunking of the theory that the CRE (commercial real estate) bubble would sustain the economy, no mention has been made of the Capex (capital expenditure) boom that was predicted to uphold the economies of the world as the dis-credit-ed bubble and its concomitant housing bubble lost hot air.

These articles, together with many others appearing in the last weeks and months, of major corporations cutting back on capex spending in the face of recessionary forces, should debunk the myth of capex spending coming to the economy's rescue.

Meanwhile, at the banks: "The situation is so extreme and beyond what we've seen in past cycles that management teams are becoming reluctant to predict the relationship between unemployment and credit losses," said Kevin Fitzsimmons, analyst at Sandler O'Neill & Partners.

The Washington Independent notes that Analysts Fear $1 Trillion Credit Card Market Could Be Next Crash.

According to a Bloomberg analysis incorporating data from the Treasury Department and Federal Deposit Insurance Corp. (FDIC) and interviews with regulatory officials and others:

* $300 billion has been spent on Fannie Mae, Freddie Mac (FRE), American International Group Inc. (AIG) and Bear Stearns Cos. (now part of JP Morgan Chase & Co. (JPM).
* $300 billion on Citigroup.
* $700 billion on TARP - though not on what TARP was intended for.
* $800 billion on Fed-directed asset-backed debt-purchase programs.
* $1.4 trillion on FDIC bank guarantees.
* $2.3 trillion on Fed commercial paper programs.
* And $2.2 trillion on other Fed lending and government commitments.

That totals a little bit more than $8.5 trillion.

Throwing good taxpayer money after badly wasted taxpayer money will not fix anything. But throwing out overly leveraged, overly greedy, overly dependent banks and bankers is a good start. But not Iceland's proven.

It must be recognized and acknowledged that Capitalism is Criminality...there is no difference,
it's merely sanctioned by government, making the behavior un-criminal, legally.

Whereas elevating greed to the height of virtue while simultaneously putting in strong regulations and JAIL-time penalties is one thing, to elevate Greed while removing those penalties and stoking it to a hot flame of mania isn't just inviting criminality, it's sanctioning it, even enforcing it. Because when your competitors take advantage of the lax environment, thereby making outsize profits that consequently entices your shareholders to become their shareholders, you are not fulfilling your fiduciary responsibilities and the sacrosanct marketplace will destroy you.

So for all the sanctimonious denial and hypocritical "How could anybody see this coming?", every economist who actually was one knew this. But every economist simply rolled over and became just a toady for their so-called educational institution or government agency that was raking in the dough as they promised their regulators juicy, multi-million dollar jobs after they've finished what they maddeningly refer to as government "service".

Such service in a restaurant would amount to you seating yourself, getting up and getting your own food and drink, clearing your own table, seating the next patron and then leaving your credit card with the Maitre d'.

"Forty percent of the world's wealth was destroyed in last five quarters. It is an almost incomprehensible number," said Stephen Schwarzman, chairman of the leading private equity company Blackstone Group.

Stephen Roach, Morgan Stanley's Asia chairman, agreed the next three years would be tough:

"The concept of a vigorous 'V'-shaped recovery is for business cycles of the past but not for this post-bubble, post-crisis business cycle. It is going to be a long slog in 2010, in 2011," he told Reuters.

The UK's third largest supermarket chain, Sainsbury's Supermarkets, announced plans today to use its unsold food in Scotland to power a biomass plant near Motherwell, about 15 miles southeast of Glasgow.

The chain's 28 stores in Scotland send 42 metric tons of waste to landfills each week. The effort would divert the waste and produce enough power for a town the size of Inverness, which has a population over more than 50,000. The chain said each metric ton could power 500 homes. The UK has long been criticized for its food waste. A report last year from the government-funded Waste and Resources Action Programme showed that 6.7 million metric tons of food is thrown out in the UK each year, half of which is food that is unopened or untouched.

This is the Capitalist's dream. Food being discarded while barges return to the East empty to the starving millions of the world. And this is at its best. Watch what the future has in store, and remember that we threw away food by the mega-ton while people starved and churches stoked them to ever greater birthrates.

The base of the Statue of Liberty reads:

"Give me your tired, your poor,

Your huddled masses yearning to breathe free,

The wretched refuse of your teeming shore.

Send these, the homeless, tempest-tost to me,

Forgotten is the fact that these huddled masses were created by the most successful economies in the World, awash in gold and stuffed with foods and spices and drugs from around the world produced by slave labor, making their own citizens so much surplus. Blind are we to the fact that the return to the slave economies of the 18'th century occurred right under our upturned noses while we were bought off with cheap credit, mansions we couldn't afford, and chariots that suck down petrol like it's coca cola.

While the USA worked hand-in-hand with China's totalitarian government to shoot down its dissidents so that its population could be brought by cattle car into its sweatshops to make our sweatshirts, with US chanting, "they sweat, we think", the Cheneys and the Carlysle Groups (i.e., the Bushes) and Blackstone, and Paladins of the world, all oil and defense men (ie living on government guarantees), who knew the POP (Peak Oil Production) of the credit bubble would be the end of the world as we know it, would have us all so mired in debt and enslaved by our inability to ever work our way out from under it, have been simply playing us for suckers on the largest scale in human history.... Madoff was a 2-bit hack, completely off the radar screen because the malfeasance on all levels of government completely dwarfed his crimes...and we're still, for the most part, still laboring under the self-inflicted blindness of a delusional citizenry that hypnotizes itself into the belief that the US government is "for" the people.

Well, alright it is. It is for the Rich people.

Capitalism is and always has been designed to create scarcity and enrich and protect a small elite. WW2 forced their hand into sharing the enormous wealth generated by the American economy after the US military carried out the plan of the upper class elite to utterly destroy the productive capacity of the German and Japanese economies. That, however was an aberration. We are now returning to the planned economy Capitalists favor where the uneducated masses are forced to come on bended knees to beg for credit for their education and healthcare in order to be admitted into the high citadels of finance and Government jobs to join the ranks of those who hold sway over the rest of the population that 's prostrate before it. This is what Ike warned about when he warned of mankind hanging on a cross of iron.

The difference is Ike saw this as a bad thing. Today's Upper Class see it as the only answer to POP, which they deride even as they build walls around themselves against its inevitable occurrence. POP was reached in 2005. Since then the world has produced less oil year after year, and will continue to do so into the foreseeable future...make no mistake about it.

This was the reason the Reagan revolution was started and has continued through Democratic and Republican administrations. The West brags it rode to victory in WWII on a wave of oil, and the rich intend to surf on that wave while crushing the rest of mankind beneath it.

If you disbelieve this, then just look at the nature of the States which are buying our debt: the Gulf States and the Chinese. Just as Germany and Japan were forced to remake their economies in the image of the US, so the US elite have forced the American people into the position where we owe our very existence to either totalitarian Communists or anti-gay, anti-women, anti-democratic Sheikdoms. Those are the rulers the US will be kowtowing to more and more as we move into the future, because we have blindly and, deaf to all warnings, placed our economy's, and therefore our country's, future into their hands. The end of the Bush Regime brought the final push into completely unsalvageable hopelessness, following the script laid out in Naomi Klein's "Disaster Capitalism" and followed so well in other economies, such as South Africa's, and pushed by such Chicago School acolytes as Rumsfeld.

If you have not gotten a whiff of the stench of betrayal with which the Uber-Rich are rife, it is merely because along with your senses of sight and hearing, your sense of smell has atrophied as well.
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