U.S. Economic/Financial News
Another Boondoggle Under the Cloak of Green Energy Exposed
Oct. 3 (EIRNS)A potentially multibillion-dollar boondoggle, presented to the New York Power Authority (NYPA) as emission-free green energy, has been formally rejected by the NYPA authorities. On Sept. 27, the NYPA formally made it clear that it would not purchase any power from this boondoggle. In essence, the NYPA has pulled the plug on the wind farm project, known as the Galloo Island Wind Farm, which the racketeers are trying to build on the waters of Lake Erie and Lake Ontario.
NYPA officials said the project wasn't fiscally prudent, but what they cited as the reason is the following. According to the NYPA, they were told that the 150 MW project needed $60-$100 million a year in subsidies. A larger project would just yield a larger subsidy, said Jill Anderson, the Power Authority executive who delivered the report recommending that the project be scuttled. But the subsidy wouldn't have just lasted for a year or two. NYPA would have had to pay them for 20 years. So on even a small-scale project, it would have cost $1.2-$2 billion in subsidies over 20 years just to make the project work financially.
NYPA's decision preceded a 15-minute conference call on Sept. 28 that included Gov. Andrew M. Cuomo's office and representatives of Upstate New York Power Corp., the green energy developing company. The bottom line is now the investors and contractors have to figure out if Galloo Island can proceed without a Power Purchase Authority (PPA), Assemblyman Kenneth D. Blankenbush (R-Black River) told the media. That, of course, wasn't talked about, but now it will be up to the investors to decide.
Latest Statistics Show U.S. a Nation of Part-Time Workers
Oct. 7 (EIRNS)The Bureau of Labor Statistics (BLS) September employment report, released today, said 103,000 net non-farm jobs were added in the U.S. economy, with private employment rising by 137,000 and government employment falling by 34,000, the official unemployment rate staying 9.1%. But clearly, a lot of full-time employment was lost in September, because it also reported that the number of Americans forced to work only part-time rose by nearly 450,000, four times the total reported increase. Other reports indicate that what isn't part-time hiring, is short-term hiring"temp contract employment" for 30 days9 months without benefits.
If one takes the BLS figures without seasonal adjustment for the first nine months of 2011, total U.S. employment has risen by just 500,000 in that time, and "virtual jobs" have accounted for 420,000 of that.
Geithner's Debt Scheme Requires Psychiatric, Not Financial Analysis
Oct. 3 (EIRNS)This is the lead of economist Satyajit Das's attack on Geithner's own "pass it now" scheme being imposed on European governments by the Obama White House. Das defines it in Einstein's terms of repeating the same procedure over and over and expecting different resultsin this case, creating a EU2-3 trillion synthetic collateralized debt obligation, or "CDO-squared," of exactly the same toxic type that blew up banks and investment funds worldwide in 2007-08. He notes that:
* The leveraged EFSF scheme would have the characteristics of Hank Paulson's "Master Liquidity Enhancement Conduit" (MLEC, or "the super conduit"), supposed to fix the asset-backed paper markets, which Paulson created and then hurriedly abandoned in 2007, when big banks realized it would attract losses to itself like tar paper. But the leveraged EFSF would, of course, be orders of magnitude larger in new debt;
* The leveraged EFSF is only supposed to "work" by shock and awe; i.e., if its mere appearance makes all debt losses disappear and it never need be used. This was also supposed to be the nature of the EFSF itself, which instead is already reduced about in half (by Irish, Greek, Portuguese bailouts) before even being ratified;
* The EFSF is supposed to borrow its "leverage" from money-printings of the ECB (whose capital resources are in the few tens of billions!) and from sovereign wealth funds and "markets," ultimately on the guarantees of the credit of the EU national governments (including Greece, Ireland, Italy, etc.!). All those governments would be exposed to all the losses of the "leveraged EFSF," just like investors in a toxic CDO in 2007-08;
* While Geithner's 10/1 leverage demand implies the exhaustion of EFSF itself would only cover the first 10% "tranche" of losses on this gigantic CDO, "even a 20% loss estimate may be too low. Unlike typical diversified CDO portfolios, the highly concentrated nature of the underlying investments (distressed sovereign debt and equity in distressed banks exposed to the very same sovereigns) and the high default correlation [default triggering default, etc.] means potential losses could be much higher ... as high as 75%." The losses on Greek debt are already sure to be 50% and more. Thus, trillions in losses for all, and massive, hyperinflationary money-printing to "cover" them.
Das says "the circular nature of the scheme is surreal," and characterizes the lunatic plan as just like a financial company selling credit default swaps as insurance against its own defaultto the tune of several trillion euros.