Saturday, August 7, 2010

Report from parallel earth

Revealed: Shocking video of parallel first lady!

Sparky predicts: Bogus wingnut scandals of the future
There will be a scandal about something really stupid. Trust me

Howard Dean: Individual mandate will disappear from HC Bill

By Daniel Tencer | Friday, August 6th, 2010

The individual mandate requiring people to buy health insurance will disappear before health care reform is fully implemented in 2014, Howard Dean said Friday.

The former Democratic Party chairman and vocal champion of health care reform told MSNBC that "by the time this thing goes into effect in 2014, I think the mandate will be gone either through the courts or because it's unpopular."

But Dean said he didn't see this as a problem, pointing to his own state's health care reforms in the 1990s, which did not include an individual mandate.

"The mandate's not essential to the plan anyway," Dean said. "It never was essential to the plan. They did it in Massachusetts and had a mandate, but we have universal health care for kids in my state [Vermont] without a mandate."

Host Savannah Guthrie pointed out that the White House has been arguing the mandate is necessary because, without it, people would only purchase health insurance when they get sick, but Dean rejected the notion.

"There will be two or three percent of the people who cheat," he said. "That is not enough to bring the system to a halt and people don't like to be told what to do."

Dean's comments come in the wake of a Virginia judge's decision earlier this week to allow a constitutional challenge to the individual mandate to go ahead. Legislators in at least 38 states have proposed measures to curb the federal health reform law, with many of the proposals focusing on the individual mandate.

But Dean's argument that the mandate is unnecessary was challenged by Ian Millhiser, a policy analyst at the Center for American Progress. Responding to Dean's comments, Millhiser said Dean was wrong that the lack of an individual mandate wouldn't affect insurance premiums.

Quoting MIT economist and CAP contributor Jonathan Gruber, Millhiser argued that not having an individual mandate would mean people who aren't sick would see buying health care as a "bad deal" and would wait until they got sick. That, in turn would result in fewer people carrying coverage and higher premiums for those who do. Millhiser wrote:

[S]even states attempted to ban preexisting conditions discrimination without also requiring everyone to carry a minimum level of coverage, and all of them saw their premiums skyrocket. According to a scholarly study of Vermont’s health plan, Vermont’s premiums shot up after it enacted a ban on preexisting conditions discrimination but no mandate in 1993. Between 1994 and 1996, most of the country only experienced single-digit increases in its insurance costs. In Vermont, however, average premiums increased by 16 percent during this same two year period.

In Massachusetts, the one state to enact a minimum coverage provision along with its ban on discrimination, the numbers are very different. There, individual premiums fell a massive 40 percent in the years after Massachusetts’ minimum coverage law went into effect, while the rest of the nation experienced a 14 percent increase.

Millhiser also argues that the courts may not strike down the individual mandate. If the courts see the issue as being a case of eliminating discrimination against the sick (by forcing insurers to cover them), they could give the government broad leeway to apply the policy in an effective way -- including an individual mandate, Millhiser writes.

Foreclosure Mills: America's Newest Housing Nightmare

Borrowers are getting screwed again as bailed-out banks send their foreclosure dirty work to con artists with a history of breaking the law.
By Andy Kroll, Mother Jones
Posted on August 7, 2010

LATE ONE NIGHT IN February 2009, Ariane Ice sat poring over records on the website of Florida's Palm Beach County. She'd been at it for weeks, forsaking sleep to sift through thousands of legal documents. She and her husband, Tom, an attorney, ran a boutique foreclosure defense firm called Ice Legal. (Slogan: "Your home is your castle. Defend it.") Now they were up against one of Florida's biggest foreclosure law firms: Founded by multimillionaire attorney David J. Stern, it controlled one-fifth of the state's booming market in foreclosure-related services. Ice had a strong hunch that Stern's operation was up to something, and that night she found her smoking gun.

It involved something called an "assignment of mortgage," the document that certifies who owns the property and is thus entitled to foreclose on it. Especially these days, the assignment is key evidence in a foreclosure case: With so many loans having been bought, sold, securitized, and traded, establishing who owns the mortgage is hardly a trivial matter. It frequently requires months of sleuthing in order to untangle the web of banks, brokers, and investors, among others. By law, a firm must execute (complete, sign, and notarize) an assignment before attempting to seize somebody's home.

A Florida notary's stamp is valid for four years, and its expiration date is visible on the imprint. But here in front of Ice were dozens of assignments notarized with stamps that hadn't even existed until months—in some cases nearly a year—after the foreclosures were filed. Which meant Stern's people were foreclosing first and doing their legal paperwork later. In effect, it also meant they were lying to the court—an act that could get a lawyer disbarred or even prosecuted. "There's no question that it's pervasive," says Tom Ice of the backdated documents—nearly two dozen of which were verified by Mother Jones. "We've found tons of them."

This all might seem like a legal technicality, but it's not. The faster a foreclosure moves, the more difficult it is for a homeowner to fight it—even if the case was filed in error. In March, upon discovering that Stern's firm had fudged an assignment of mortgage in another case, a judge in central Florida's Pasco County dismissed the case with prejudice—an unusually harsh ruling that means it can never again be refiled. "The execution date and notarial date," she wrote in a blunt ruling, "were fraudulently backdated, in a purposeful, intentional effort to mislead the defendant and this court."

More often than not in uncontested cases, missing or problematic documents simply go overlooked. In Florida, where foreclosure cases must go before a judge (some states handle them as a bureaucratic matter), dwindling budgets and soaring caseloads have overwhelmed local courts. Last year, the foreclosure dockets of Lee County in southwest Florida became so clogged that the court initiated rapid-fire hearings lasting less than 20 seconds per case—"the rocket docket," attorneys called it. In Broward County, the epicenter of America’s housing bust, the courthouse recently began holding foreclosure hearings in a hallway, a scene that local attorneys call the "new Broward Zoo." "The judges are so swamped with this stuff that they just don't pay attention," says Margery Golant, a veteran Florida foreclosure defense lawyer. "They just rubber-stamp them."

But the Ices had uncovered what looked like a pattern, so Tom booked a deposition with Stern's top deputy, Cheryl Samons, and confronted her with the backdated documents—including two from cases her firm had filed against Ice Legal's clients. Samons, whose counsel was present, insisted that the filings were just a mistake. She refused to elaborate, so the Ices moved to depose the notaries and other Stern employees whose names were on the evidence. On the eve of those depositions, however, the firm dropped foreclosure proceedings against the Ices' clients.

It was a bittersweet victory: The Ices had won their cases, but Stern's practices remained under wraps. "This was done to cover up fraud," Tom fumes. "It was done precisely so they could try to hit a reset button and keep us from getting the real goods."

Backdated documents, according to a chorus of foreclosure experts, are typical of the sort of shenanigans practiced by a breed of law firms known as "foreclosure mills." While far less scrutinized than subprime lenders or Wall Street banks, these firms undermine efforts by government and the mortgage industry to put struggling homeowners back on track at a time of record foreclosures. (There were 2.8 million foreclosures in 2009, and 3.8 million are projected for this year.) The mills think "they can just change things and make it up to get to the end result they want, because there's no one holding them accountable," says Prentiss Cox, a foreclosure expert at the University of Minnesota Law School. "We've got these people with incentives to go ahead with foreclosures and flood the real estate market."

Stern's is hardly the only outfit to attract criticism, but his story is a useful window into the multibillion-dollar "default services" industry, which includes both law firms like Stern's and contract companies that handle paper-pushing tasks for other big foreclosure lawyers. Over the past decade and a half, Stern has built up one of the industry's most powerful operations—a global machine with offices in Florida, Kentucky, Puerto Rico, and the Philippines—squeezing profits from every step in the foreclosure process. Among his loyal clients, who've sent him hundreds of thousands of cases, are some of the nation's biggest (and, thanks to American taxpayers, most handsomely bailed out) banks—including Wells Fargo, Bank of America, and Citigroup. "A lot of these mills are doing the same kinds of things," says Linda Fisher, a professor and mortgage-fraud expert at Seton Hall University's law school. But, she added, "I've heard some pretty bad stories about Stern from people in Florida."

While the mortgage fiasco has so far cost American homeowners an estimated $7 trillion in lost equity, it has made Stern (no relation to NBA commissioner David J. Stern) fabulously rich. His $15 million, 16,000-square-foot mansion occupies a corner lot in a private island community on the Atlantic Intracoastal Waterway. It is featured on a water-taxi tour of the area's grandest estates, along with the abodes of Jay Leno and billionaire Blockbuster founder Wayne Huizenga, as well as the former residence of Desi Arnaz and Lucille Ball. (Last year, Stern snapped up his next-door neighbor's property for $8 million and tore down the house to make way for a tennis court.) Docked outside is Misunderstood, Stern's 130-foot, jet-propelled Mangusta yacht—a $20 million-plus replacement for his previous 108-foot Mangusta. He also owns four Ferraris, four Porsches, two Mercedes-Benzes, and a Bugatti—a high-end Italian brand with models costing north of $1 million a pop.

Despite his immense wealth and ability to affect the lives of ordinary people, Stern operates out of the public eye. His law firm has no website, he is rarely mentioned in the mainstream business press, and neither he nor several of his top employees responded to repeated interview requests for this story. Stern's personal attorney, Jeffrey Tew, also declined to comment. But scores of interviews and thousands of pages of legal and financial filings, internal emails, and other documents obtained by Mother Jones provided insight into his operation. So did eight of Stern's former employees—attorneys, paralegals, and other staffers who agreed to talk on condition of anonymity. (Most still work in related fields and fear that speaking publicly about their ex-boss could harm their careers.)

FORECLOSURE MILLS OWE their existence to Fannie Mae and Freddie Mac, the federally guaranteed entities that essentially created, beginning in 1968, the vast marketplace where loans are traded. Their mandate was to promote property ownership by making a large pool of credit available at affordable rates. They accomplished this by buying mortgage debt from banks and packaging it into bonds, which allowed investors to get in on the action. The banks responded to the demand by lending more money to their customers, and Fannie and Freddie's combined mortgage portfolio exploded from $61 billion in 1980 to $1.2 trillion two decades later, according to the Government Accountability Office. Their dominance gave them the clout to rewrite rules for the mortgage industry—standardizing underwriting guidelines, loan documents, and the like.

Fannie and Freddie also reshaped the foreclosure industry. Their huge holdings meant they had to deal with thousands of foreclosures annually—even during periods when only a small percentage of loans were going bad. In the 1990s, the market expanded into subprime territory to feed the securitization beast, and borrowers began defaulting at increasingly higher rates. Hiring lawyers on a case-by-case basis was burdensome, so Fannie and Freddie put together a stable of law firms, prime contractors prepared to litigate large bundles of foreclosures quickly and cheaply. They urged these handpicked firms to bring in-house all of the related services—inspections, eviction notices, sales of repossessed properties, and so forth—or at least to retain a suitable subcontractor to handle the tasks. Thus emerged the foreclosure supermarket.

Stern's company is one of dozens of mills that now churn through more than a million cases a year for Fannie and Freddie, big banks, and private lenders. Built like industrial assembly lines, the mills employ small armies of paralegals and other low-level employees who mass-produce court filings, run title searches, and schedule scores of hearings and property auctions daily. Meanwhile, staff attorneys appear for dozens of court hearings in rapid succession, pulling plastic filing cabinets on wheels behind them as they dash from one courtroom to the next. Stern and his ilk typically create in-house subsidiaries, which then bill the parent law firm for the various services. "All sorts of crap is loaded on," notes Irv Ackelsberg, a Philadelphia consumer-law attorney.

The business model is simple: to tear through cases as quickly as possible. (Stern's company handled 70,382 foreclosures in 2009 alone.) This breakneck pace stems from how the mills get paid. Rather than billing hourly, they receive a predetermined flat fee for the foreclosure—typically around $1,000—plus add-ons for each of the related services. The more they foreclose, the more they make. As a result, consumer attorneys and legal experts say, even families who have been foreclosed upon illegally—and who can afford to make good on their mortgages—end up getting steamrolled. "It's 'How fast can I turn this file?'" says Ira Rheingold, executive director of the National Association of Consumer Advocates in Washington, DC. "For these guys, the law is irrelevant, the process is irrelevant, the substance is irrelevant."

In 2006, for instance, a federal bankruptcy judge blasted New Jersey law firm Shapiro & Diaz for filing 250 home-seizure motions presigned by an employee who had left the firm more than a year earlier. Calling it "the blithe implementation of a renegade practice," the judge slapped Shapiro & Diaz with $125,000 in fines. The following year, a federal judge in Texas fined Barrett Burke Wilson Castle Daffin & Frappier—a powerful foreclosure firm—$65,000 for filing computer-generated documents the judge called "grossly erroneous" and "gibberish." Likewise, Wells Fargo was fined $95,000 thanks to shoddy paperwork by Florida Default Law Group—a Wells contractor that clearly believed, according to the judge, that "filing any old pleading without undertaking any investigation into its accuracy is perfectly acceptable practice." (In April, the state attorney general's office began probing Florida Default for allegedly "fabricating and/or presenting false and misleading documents in foreclosure cases.")

For a homeowner in default, the best option is a loan modification or "workout" agreement, in which the borrower and mortgage servicer—the firm that collects monthly payments on a lender's behalf— renegotiate the details of a loan. When successful, it allows families to keep their homes, banks and bondholders to maintain their cash flow, and neighborhoods to escape the collateral damage of yet another blighted property. That's why the Obama administration is pushing this strategy.

But in their rush to foreclose, mills frequently charge ahead even after a servicer has agreed to modify a troubled a loan. What's more, in a November 2009 survey of 113 consumer advocates in 23 states and the District of Columbia, nearly all said they'd represented homeowners in cases where lenders and their attorneys—usually from a mill—tried to foreclose without bothering to check whether the homeowner qualified for federal mortgage relief. Borrowers "receive confusing, seemingly contradictory correspondence from the servicer and the foreclosure attorney, and in too many instances find that their home has been sold before the modification analysis has been completed," Alys Cohen, a staff attorney with the National Consumer Law Center, told Congress in April.

The mills have little incentive to cooperate with efforts to keep people in their homes. Indeed, notes foreclosure-defense attorney Golant, once these high-volume firms run through the current backlog of subprime defaults, some of them may find themselves with little to do. "They have an interest in this going on as long as possible," she says.

Even Stern admits as much. In a March speech to prospective investors, he made note of the administration's embattled $75 billion homeowner-relief program. "Fortunately, it is failing," he said.

"It's completely screwed up," laments Ira Rheingold. "The machine can't be stopped, because the people who are making money operating the machine don't want it to stop."

DAVID STERN WAS WELL POSITIONED to cash in on the business opportunity offered by Fannie Mae and Freddie Mac. After graduating from law school in the mid-'80s, he took a job with the firm of Gerald M. Shapiro, one of the first lawyers to automate the foreclosure process—and a partner in Shapiro & Diaz. In 1993, having mastered the ins and outs of foreclosures, he left to open his own shop in a North Miami Beach office with, in his words, "ugly blue carpet and pink walls." Stern shared the space, according to state business records, with his wife's short-lived beauty consulting company, Your Personal Best.

He put in his applications, and by 1997, when Fannie and Freddie rolled out their most-favored-attorney program in Florida, Stern was on the list. He relocated the firm to the nearby city of Plantation—taking over a strip-mall space once occupied by a Stein Mart discount clothing store. He then hired a slew of rookie attorneys whose job was primarily to rubber-stamp legal documents. One attorney Stern brought on in 2007, fresh from law school, told me she was ordered to sign legal filings that were dumped on her desk before she had a chance to read them. She eventually quit. "Ethics are thrown out the door," she said. Another lawyer, who deals with the firm regularly, told me that Stern's seasoned employees belittled the newbies, referring to them simply as "bar licenses."

Reducing the foreclosure process to data entry wasn't an entirely novel idea, but Stern set out to perfect the model. His minions created a master database dubbed "the Bible," with information on anything that could possibly relate to a foreclosure case in Florida—the things specific judges required, how many file copies they wanted, clerks' phone numbers, names of judicial assistants, even warnings about when a certain judge was cranky and having a bad day. According to one former paralegal, supervisors said they would be fired if they didn't complete at least 15 daily "casesums"—information summaries for new cases referred to the firm. Another paralegal, who spent three years at Stern's firm, said there were unofficial contests to see who could jam a case through the fastest. "Somebody would get a 76-day foreclosure," she said, "and then someone else would say, 'Oh, I can beat that!'" (An uncontested foreclosure in Florida typically lasts 135 days, according to industry analyst RealtyTrac.)

While rushing foreclosures isn't illegal, Stern's fledgling firm was promptly accused of something that is: gouging people who are trying to get out of default. In October 1998, Tallahassee attorney Claude Walker filed a class-action lawsuit involving tens of thousands of claimants, alleging that Stern had piled excessive fees on families fighting to keep their homes. (Walker, who visited Stern's offices in 1999 to collect depositions, described the place as "a big warehouse" where hordes of attorneys holed up in tiny, crowded offices "like hamsters in a cage.") After several years of battling in court, Stern settled for $2.2 million. Based on that case, the Florida Supreme Court and state bar association later reprimanded him for "professional misconduct."

A few months after Walker filed his class action, former paralegal Bridgette Balboni sued Stern personally for sexual harassment. The case details read like something out of Animal House: Balboni said Stern grabbed female employees from behind and faked sex with them, stuck his tongue in one woman's ear, and joked that another woman used her pager as a vibrator. Balboni, who settled for an undisclosed sum, declined to discuss the case. But five other women who have worked for Stern told me of similar behavior by the boss. Several used the word "pig" in their descriptions.

Despite his legal setbacks, Stern remained on a roll. Two years running, in 1998 and 1999, Fannie Mae named him "Attorney of the Year." (A Fannie spokeswoman did not respond to requests for comment.) After settling Walker's case, Stern and other foreclosure attorneys teamed up, hiring lobbyists to urge state lawmakers to cap class-action damages in consumer lawsuits; the Republican-controlled legislature obliged in May 2001. (The prior year, Stern had donated $5,000 to the Florida GOP. His previous state-level candidate contributions were in the hundreds, and he'd never given a cent to the party before.)

Stern continued cramming more employees, documents, and computers into his strip-mall headquarters. From 2005 through 2007, city inspectors repeatedly cited the firm for code violations such as blocking exits and fire sprinklers with storage, and for creating a hazard by stringing extension cords between departments.

The cases kept coming. From 2006 to 2008, as the number of Americans losing their homes doubled, Stern's case referrals nearly quintupled, and lenders sent him 12 times as many repossessed properties to sell off. Gross revenues just for Stern's administrative operations—titles, home sales, and default processing—leaped from $40 million to $200 million, and his payroll swelled from 400 to nearly 1,000 employees. (Orientations for new hires were a near-weekly affair, said a former secretary.) In 2008, flush with cash, the firm left its strip-mall digs for a luxurious building down the street overlooking a small lake.

Amid its meteoric rise, interviews and court records show, Stern's operation began to cut corners. Beyond the backdated assignments, employees told me that the firm routinely doctored its legal filings. Case chronologies—the timeline of important events in a foreclosure—were changed "all day long" to create the appearance of propriety, notes a former Stern paralegal. And internal documents show that the firm attempted to push cases through the courts even when key documents like the assignment of mortgage—or the mortgage contract itself—were missing from the file. "Need to re-set. No original loan docs," a Stern attorney wrote in a July 2008 memo after being rebuffed at a Tampa court hearing. At a Stern hearing in April, Pinellas County Judge Anthony Rondolino became fed up with the mills in general, declaring, "I don't have any confidence that any of the documents the court is receiving on these mass foreclosures are valid."

Since then, Stern's legal headaches have only worsened. In July, a Fort Lauderdale attorney filed a class-action lawsuit against Stern and his firm, accusing them of racketeering and fraudulently foreclosing on Florida homeowners. The suit claims Stern's firm hid the true ownership on mortgages for "tens of thousands" of homeowners in order to "illegally obtain final judgments of foreclosure." A few days later, on July 29, another suit was filed alleging that Stern's firm blithely refused to stop a foreclosure on a couple in Port St. Lucie even though the homeowners hadn't missed or been late on their monthly payments.

Despite civil allegations past and present, banks and lenders continue to funnel Stern more than 5,000 new cases a month—and Fannie and Freddie have kept him as a designated counsel. A Freddie Mac spokesman cites Stern's "good standing" in Florida, but adds, "We certainly want all of our vendors to follow federal and state law." (Neither Wells Fargo nor Bank of America—which work with Stern while publicly cheering Obama's housing-relief programs and rolling out their own—would comment directly on their relationships with Stern. In an email, a Wells spokeswoman noted that the bank monitors all of its attorneys and adjusts its referrals accordingly.)

The problems at Stern's firm weren't confined to the courthouse. Supervisors would instruct their staffs to ignore or hang up on homeowners who called in with complaints, according to several people who worked there in the past five years. The rule applied even if the homeowner called with a legitimate issue. "You would get calls from people saying, 'We are going to be evicted today, and I just got out of the hospital. I just had a baby,'" a secretary told me. "I'd go into my boss' office, and she'd say, 'That's their problem.'"

An employee from Stern's reinstatement unit—which is supposed to help borrowers get out of default—also spoke of a culture of indifference. "I've had people call and tell me the locks were changed because their house had been sold at auction" without them knowing, she said. "But you would get in trouble if you were on the phone for a long time with the borrower."

Consider the case of Holly and Rory Hewitt, who for years faithfully made monthly payments on their modest one-story house on what was once an orange grove in Loxahatchee, Florida. In October 2007 their lender, Countrywide, erroneously informed the couple that they were in default. The Hewitts, who had the money, immediately called and asked how much they owed so that they might get things straightened out. Soon after, a reinstatement letter arrived on the letterhead of Countrywide's legal counsel—the Law Offices of David J. Stern.

The $18,500 bill was larded with charges—property inspection, title, and late fees that seemed exorbitant even in an industry renowned for arbitrary fees, plus monthly loan payments that weren't yet due. In addition, Stern charged the Hewitts for serving legal papers not just on Rory and Holly, but on a nonexistent spouse for each. In all, the couple was being gouged for thousands of dollars. The Hewitts took their story to a local legal aid organization, which passed the case to a private attorney. It would eventually become the core of another class-action suit—one of two pending cases alleging that Stern had dumped junk fees on some 3,500 homeowners who were trying to escape default.

Stern's attorney insists publicly that the fees were reasonable and legal. But the lawsuits claim that Stern's firm often tripled the standard title fee, charged for serving papers on fictitious people, and demanded payments and fees that homeowners plainly didn't owe—violating Florida laws against predatory debt collecting and deceptive trade practices. Stern, the filings allege, is personally to blame. "These people are scratching coffee cans to get enough money to reinstate their mortgage," says attorney Claude Walker. "You don't have to go take nickels and dimes from people who are trying to save their houses."

A NICKEL HERE, A DIME THERE, and pretty soon you're talking real money. Stern's back-office operations cleared more than $44 million in profit last year. Last December, a Chinese acquisition fund purchased those departments and spun them off into a company called DJSP (David J. Stern Processing) Enterprises. Incorporated in the British Virgin Islands—a notorious tax haven—the new firm will continue processing Stern foreclosures, and hire itself out to handle other firms' foreclosure paperwork, too.

Stern collected $53 million in the deal and retained a top role in DJSP. In January, the company's stock debuted on the NASDAQ at $9.25 per share—and with that, the small outfit Stern had launched in 1994 in an ugly North Miami Beach office was worth in the neighborhood of $300 million.

The company's stock took a nosedive in May, after Stern told investors there would be lower earnings due to a slowdown in referrals by a big client and to the Treasury Department's renewed efforts to bolster homeowner relief. Some of DJSP's investors, angry over the decline in their investment, claimed Stern knowingly misled them. In July, DJSP, Stern, and his CFO were hit with a class-action securities fraud suit. More investors have since alleged fraud by DJSP, pushing the company's share price down to $3.70 as of August 3.

Nonetheless, Stern has gone out of his way to assure investors that foreclosures would surge in the second half of 2010 as clients processed their backlogs of delinquent loans. In March, he and his chief financial officer flew to Southern California to make the case for why the foreclosure industry is ripe for expansion. The setting was the annual shindig of investment banking firm Roth Capital Partners, a swank conference for hedge-fund managers and institutional investors held at the Ritz-Carlton, Laguna Niguel—a luxury hotel perched on a bluff overlooking the Pacific Ocean. Conference perks included private concerts by Social Distortion and Billy Idol.

In his speech to the money people, Stern explained why the time was right to invest. Historical data, he said, showed that people will continue losing their homes in large numbers through 2012, ensuring plenty of business. The market's shadow inventory—people in default whose homes have not yet gone into foreclosure—numbered between 5 and 7 million. And when those foreclosures go through the pipeline, the properties will need to be sold. Which is to say, the near future looks golden for David Stern. "When people say, 'Oh, my god, the economy is bad,' I'm like, 'Oh, my god, it's great.' I hate to hear people are losing homes, and credit isn't available, and people's credit is such that they can't [refinance]," he told his audience. "But if you are in our niche, it's what we want to do, and it's what we want to see."

U.S. Ends Private Talks on Web Rules

Net Neutrality

WASHINGTON—U.S. officials called off closed-door talks with lobbyists aimed at reaching a compromise on ways to regulate Internet traffic, saying they couldn't reach a solution.

The meetings, which involved Internet and telecommunications giants, sought to give the Federal Communications Commission authority to act as an Internet traffic cop without the need to adopt controversial wholesale changes to the law.

The agency abandoned the talks a day after news reports that two participants, Verizon Communications Inc. and Google Inc., had reached a separate agreement on Internet traffic rules that would allow the phone giant to carry some broadband traffic at faster speeds.

People familiar with the situation said the talks were cut off abruptly. These people said FCC officials felt the Verizon-Google deal undermined their broader talks. The companies haven't publicly released the agreement.

At stake is how far the government can go to dictate the way Internet providers manage traffic on networks they have spent billions of dollars rolling out. The FCC has proposed s0-called net neutrality rules that would ensure carriers treat all content equally, and not slow or block access to websites.

Web companies like Google and Inc., which want to offer Web video and other high-bandwidth services, have called for the FCC to prevent broadband providers from blocking websites, or selectively delaying access.

Cable and phone companies fear further regulation would handcuff their ability to cope with the growing demand put on their networks and limit the prices they can charge businesses or consumers.

For the past six weeks, a small group of lobbyists for both sides had been meeting privately at the FCC trying to hammer out a compromise. Consumer groups have taken to Twitter and blogs in recent weeks to blast the FCC's chairman, Julius Genachowski, for sponsoring private meetings with industry lobbyists. They argued the meetings violated the spirit of the Obama administration's pledge to open up government to more transparency.

A group of angry representatives of public interest groups were meeting with Mr. Genachowski about the issue in an FCC conference room Thursday afternoon when his chief of staff entered and announced that they'd pulled the plug on the lobbyists' negotiations, according to people familiar with the situation.

FCC officials declined to comment on the Verizon-Google agreement but had signaled their displeasure. On Thursday morning, Mr. Genachowski told reporters that any deal on net neutrality "that does not preserve the freedom and openness of the Internet for consumers and entrepreneurs would be unacceptable."

While Verizon and Google designed their agreement as a model for lawmakers and regulators on net neutrality, it includes several provisions that Web start-ups and Internet activists might find unacceptable, including one that would let companies pay a premium for faster delivery speeds to consumers, according to people briefed on the plan.

The Verizon-Google deal also wouldn't apply to wireless networks, according to these people.
Net neutrality proponents blasted the Verizon-Google agreement, saying reports of its contents point to it undermining the concept of net neutrality.

"The potential deal between two broadband behemoths underscores the need for the FCC to act quickly to protect the free and open Internet," said Rep. Edward Markey (D., Mass.), a member of the House Energy and Commerce Committee. "In the absence of such action, it's increasingly clear that cozy cooperation between communications colossi will reign on the Internet."

Google and Verizon denied a news report that suggested their agreement represented a business deal in which Google would pay Verizon for faster delivery of its online content to Internet users.
The companies didn't deny that they have reached an agreement on net neutrality which they hope could be used as a model for future legislation or FCC rules.

"We remain as committed as we always have been to an open Internet," said Google spokeswoman Mistique Cano. "We have not had any conversations with Verizon about paying for carriage of Google or YouTube traffic." Google owns the Internet video site YouTube.

In a statement, Verizon didn't provide details but said the agreement aimed to create "an Internet policy framework that ensures openness and accountability, and incorporates specific FCC authority, while maintaining investment and innovation."

Friday, August 6, 2010

Hawking to Humans: Outer Space or Extinction

Stephen Hawking to Human Race: Move to Outer Space or Face Extinction 
The Huffington Post | Hunter Stuart | 08- 6-10

Is the future of the human race in outer space? Theoretical physicist Stephen Hawking, in an interview with Big Think, warns that if humans can't find another planet to inhabit, they will face extinction.

"We are entering an increasingly dangerous period in our history," Hawking says. "There have been a number of times in the past when survival has been a question of touch and go," like the Cuban Missile Crisis of 1963, and the frequency of such occasions "is likely to increase in the future."

Because we are rapidly depleting the finite natural resources that Earth provides, and because our genetic code "carries selfish and aggressive instincts," our "only chance for longterm survival" may be to "spread out into space."

But how do we get there? Scientists estimate that it would take roughly 50,000 years to make it to the nearest star, if we traveled using chemical-fuel rockets. To arrive within our life span, humans would need the technology to travel at near the speed of light and to remain shielded from cosmic radiation for the duration of the journey.

Job of collecting evidence against BP may go to — BP

Underwater crime scene: Gulf investigators want to gather evidence a mile beneath the sea
by JEFFREY COLLINS | AP News | Aug 06, 2010 17:20 EDT

Now that BP appears to have vanquished its ruptured well, authorities are turning their attention to gathering evidence from what could amount to a crime scene at the bottom of the sea.

The wreckage — including the failed blowout preventer and the blackened, twisted remnants of the drilling platform — may be Exhibit A in the effort to establish who is responsible for the biggest peacetime oil spill in history. And the very companies under investigation will be in charge of recovering the evidence.

Hundreds of investigators can't wait to get their hands on evidence. The FBI is conducting a criminal investigation, the Coast Guard is seeking the cause of the blast, and lawyers are pursuing millions of dollars in damages for the families of the 11 workers killed, the dozens injured and the thousands whose livelihoods have been damaged.

"The items at the bottom of the sea are a big deal for everybody," said Stephen Herman, a New Orleans lawyer for injured rig workers and others.

BP will surely want a look at the items, particularly if it tries to shift responsibility for the disaster onto other companies, such as Transocean, which owned the oil platform, Halliburton, which supplied the crew that was cementing the well, and Cameron International, maker of the blowout preventer.

BP and Transocean — which could face heavy penalties if found to be at fault — have said they will raise some of the wreckage if it can be done without doing more damage to the oil well. That would give the two companies responsibility for gathering up the very evidence that could be used against them.

But the federal government has said it simply doesn't have the know-how and the deep-sea equipment that the drilling industry has. And it said the operation will be closely supervised by the Coast Guard.

Lawyers will be watching, too, to make sure the companies don't do anything untoward, said Brent Coon, an attorney for one of the thousands of plaintiffs seeking damages.

"I think they would do something in front of their own mother if they could," Coon said. "But the reality is there are a lot of eyes watching them and a lot of smart scientists who would know if they did anything they weren't supposed to."

The crisis in the Gulf appeared to be drawing to a close this week when BP plugged up the top of the blown-out well with mud and then sealed it with cement. BP Senior Vice President Kent Wells said crews plan to resume drilling Sunday night on a relief well more than two miles below the seafloor that will be used to inject mud and cement just above the source of the oil, thereby sealing off the well from the bottom, too. The two wells should hook up between Aug. 13 and Aug. 15, Wells said.

In other developments Friday, BP said it might drill again someday into the same undersea reservoir of oil, which is still believed to hold nearly $4 billion worth of crude. That prospect is unlikely to sit well with Gulf Coast residents furious at the oil giant.

"There's lots of oil and gas here," Chief Operating Officer Doug Suttles said. "We're going to have to think about what to do with that at some point."

Also Friday, BP said Suttles — who has spent more than three months managing BP's response efforts on the Gulf — is returning to his day job in Houston. Mike Utsler, a vice president who has been running BP's command post in Houma, La., since April, will replace him.

Willie Davis, a 41-year-old harbormaster in Pass Christian, Miss., said he fears his area will be forgotten if BP pulls out too soon. "I'm losing trust in the whole system," he said. "If they don't get up off their behinds and do something now, it's going to be years before we're back whole again."

Utsler told Gulf residents not to worry, saying the spill's effects are "a challenge that we continue to recognize with more than 20,000-plus people continuing to work."

Investigations of the disaster began immediately after the rig blew up on April 20. The government alone is conducting about a dozen, including several congressional investigations, criminal and civil probes by the Justice Department, and an examination by an expert panel convened by President Barack Obama.

Officials want to find out not only the cause of the explosion, but also how oil drilling a mile or more below the surface can be made safer.

A final outcome could be years away, particularly if someone is charged with a crime, said David Uhlmann, former chief of the Justice Department's environmental crimes team.

"Normally an investigation of a case this complicated would take two to three years. This is not a normal case," he said. "This is the worst environmental disaster in U.S. history."

Any items brought up from the seafloor will be photographed and preserved. Investigators for the government, BP and others who have a stake in the case will try to come up with testing procedures acceptable to all sides.

The blowout preventer will probably make it to the surface. The 300-ton mechanism is designed to be placed on a well and brought back to the surface for reuse. It was supposed to be the final line of defense against a catastrophic spill, but BP documents obtained by a congressional committee showed the device had a significant hydraulic leak and a dead or low battery.

"That piece of equipment will tell us whether the blowout preventer had a design defect or whether it was mechanical or human error that caused this disaster," Herman said.

The blowout preventer is still attached to the broken wellhead but will be replaced as part of the effort to permanently secure the well, said retired Coast Guard Adm. Thad Allen, who is overseeing the spill response for the government.

"In some ways it's the smoking gun," said Eric Smith, associate director of the Tulane Energy Institute. "It's rich evidence. It still won't tell you exactly what happened at the bottom of the well ... but the fact is it didn't work — and everybody wants to know why."

Coon said the rig might contain "black boxes" that recorded critical data and control panels that could be removed to re-create conditions before the explosion.

Transocean has asked the government for permission to test the blowout preventer and hopes to see it raised it in September, company President Steven Newman said.

Getting to the exploded rig itself might be harder. It would be impractical to raise the entire structure because of its immensity, twice the size of a football field, Coast Guard Rear Adm. Paul Zukunft said. He would not say whether it would be possible to cut off vital pieces of the structure.

BP says it might drill again in disaster spill reservoir

BP says it's leaving open the option of future drilling in Gulf reservoir that blew
GREG BLUESTEIN and HARRY R. WEBER | AP News | Aug 06, 2010

BP PLC said Friday it might someday drill again into the same lucrative undersea pocket of oil that spilled millions of gallons of crude, wrecked livelihoods and fouled beaches along the Gulf of Mexico.

"There's lots of oil and gas here," Chief Operating Officer Doug Suttles said at a news briefing. "We're going to have to think about what to do with that at some point."

The vast oil reservoir beneath the blown well is still believed to hold nearly $4 billion worth of crude. With the company and its partners facing tens of billions of dollars in liabilities, the incentive to exploit the wells and the reservoir could grow.

Retired Coast Guard Adm. Thad Allen, the government's point man on the spill, said he had no information on BP's future plans.

"I would assume that's a policy issue related to the management of the lease," he told reporters. "Frankly, it hasn't been raised to my level at this point. I'm not sure I can comment on it."

Suttles has spent more than three months managing BP's response efforts on the Gulf but is now returning to his day job in Houston, the company said. Mike Utsler, a vice president who has been running BP's command post in Houma, La., since April, will replace him.

The personnel shift comes as BP appears to be gaining the upper hand on plugging the leak, triggered when an oil rig exploded off Louisiana on April 20, killing 11 workers and triggering the massive spill.

Engineers this week poured in cement to complete a plug at the top of the well bore as part of a process dubbed a "static kill," but they needed to wait at least a day for it to harden. Once it does, crews can finish the last stretch of a relief well intersecting the blown well just above the oil's source, injecting more mud and cement from the bottom to form a final plug.

Suttles confirmed Friday that crews for now plan to use the 18,000-foot relief well to seal off with mud and cement the underground reservoir feeding the blown well.

The company had been hedging on how exactly it would use the relief well, which it has been digging for three months, as federal officials insisted it should be used to perform the so-called "bottom kill."

If not used for the bottom kill, the relief wells could have conceivably offered a way for BP or another company to pump oil from the reservoir and sell it, an idea unlikely to sit well with Gulf Coast residents and families of workers who died on the rig.

The static kill started Tuesday with engineers pumping enough mud down the top of the well to push the crude back to its underground source. Suttles said engineers plan to monitor the cement newly pumped in from the top and hope to test the plug with a burst of pressure Friday afternoon to make sure it's sealed.

"All the indications so far look very encouraging," he said.

A federal report this week indicated that only about a quarter of the spilled crude remains in the Gulf and is degrading quickly.

"There's essentially no skimmable oil left on the surface, no recoverable oil left on the surface," Suttles said.

Some scientists disputed the report's veracity, and much of the remaining crude has permeated deep into marshes and wetlands, complicating cleanup.

BP had 31,000 workers along the Gulf on Friday, down from 48,000 at the height of the response, Suttles said.

As BP pulled brought in 33-year employee Utsler to take over the response and the blown well appeared to have flatlined, some Gulf residents who still see the oil wreaking havoc worried the nation's attention was shifting.

Utsler told them not to worry, saying the spill's effects are "a challenge that we continue to recognize with more than 20,000-plus people continuing to work."

Willie Davis, a 41-year-old harbormaster in Pass Christian, Miss., feared his area would be forgotten if BP pulls out too soon.

"I'm losing trust in the whole system," said Willie Davis, a 41-year-old harbormaster in Pass Christian, Miss. "If they don't get up off their behinds and do something now, it's gonna be years before we're back whole again."

BP Fires 10,000 Cleanup Workers

(Sure! White House says all the oil is gone! Why the hell not fire them?!?!?--jef)


By Mac McClelland| Fri Aug. 6, 2010 10:18 AM PDT

New BP CEO Bob Dudley wasn't kidding when he announced last week that it was time for the company to scale back oil-spill cleanup operations. In fact, by the time he'd said that, the responder force had been drawn down by about 25 percent.

On July 13, the Deepwater Horizon Joint Command was reporting 46,000 responders. On July 23, it was down to 30,000, and the numbers have hovered around the low 30s since. Included in this tally are some Coast Guard and National Guard staff, but BP and subcontractors comprise the vast majority. (I've been trying to get the exact breakdown from the Coast Guard for four days, but to no avail, and BP said it didn't have it on hand, though the Coast Guard has told me it just reports BP's numbers.) In Grand Isle, Louisiana, cleanup workers (none of whom can be named; you know this drill by now) say their coworkers were either told to go home for Tropical Storm Bonnie and then never called back or fired in a massive and sudden drug test.

"Friday, the day before Bonnie, they sent a bunch of people home until further notice, and a lot of people didn't get the further notice," one supervisor told me. "Then last week, they shut the whole [cleanup operation] down. It was 'Piss in a cup or throw your ID in the bucket.' This was a BP drug test, not a [subcontracting] company drug test. It's the first time BP tested us."

A BP spokesman told me that all its subcontractors are required to drug test their cleanup employees and allow BP to do random checks itself; it just happened to do one of those checks last week. But the cleanup workers believe the company's motivation was to fire a bunch of people fast. Maybe it's because they're conspiracy theorists. Or maybe it's because the subcontractors had long had openly lax substance-abuse standards. "Most of those people had never been drug tested before," the supervisor told me. "I worked for two different subcontractors that didn't test me." He also pointed out that the local bar's parking lot is nightly full of company cars and drunk guys who drive them; one cleanup worker I met had a picture in his phone of beer cans in the cupholders of cleanup vehicles in broad daylight. "They wanted to get rid of people, and drug testing was a good way to do it. I used to supervise 30 guys; now I've got 10."

The scaleback is set to continue. Supervisors say they're supposed to break down to just a "skeleton crew" by the end of September, so hopefully the media myth that there's no more oil anywhere comes true. "Everything still changes day to day," the supervisor told me. "You don't know when a bunch of oil's gonna pop up."

Sharpest Image Yet of Massive Galaxy Collision

By Jess McNally | August 6, 2010

These two spiral galaxies have been colliding for over 100 million years. The intergalactic battle has spurred the creation of millions of new stars, the most massive of which have already exploded into supernovae.

Three of NASA’s space telescopes have combined forces to create the sharpest image yet of the merging Antennae galaxies, located 62 million light years from Earth. X-ray data from Chandra X-Ray Observatory is blue, optical data from the Hubble Space Telescope is gold and brown, and infrared data from Spitzer Space Telescope is red. The photos were taken between 1999 and 2002, and combine 117 hours of observation.

The image gives us a sneak preview of what may happen when the Milky Way collides with the neighboring Andromeda galaxy in several billion years.

Nearly half the faint objects in the image are young star clusters that contain tens of thousands of new stars. The Hubble data reveals old stars in the core of the old galaxies: star-forming regions in gold, and massive filaments of dust in brown. The red infrared data from Spitzer shows warm dust clouds that have been heated by the newborn stars, with the brightest clouds between the two original galaxies.

The brilliant blue specks from the Chandra X-ray data are also star-forming regions containing hot, interstellar gas infused with elements such as oxygen, iron, magnesium and silicon, left over from supernova explosions. The elements will be incorporated into new generations of stars and planets.

The Antennae galaxies take their name from the long antenna-like “tidal tails” that extend out from the cores of the two galaxies. The tails were formed from tidal forces created during the initial collision of the galaxies, and are easier to see in the wide-angle view of the galaxies below.

US suffers steeper-than-expected job losses


Published: Friday August 6, 2010

The US economy shed a worse-than-expected 131,000 jobs in July, the Labor Department said Friday, as the unemployment rate remained stuck at 9.5 percent (we all know it's really 20 percent--jef).

The private sector was unable to offset a massive government layoff of 143,000 census-takers, with firms creating 71,000 jobs in the month, department figures showed.

The figures were seen as yet another sign that the US economic recovery is stagnating (a better word would be "mythical"--jef).

Analysts had predicted the ranks of working Americans would shrink by around 87,000, helping to push the unemployment rate (based only on those receiving unemployment benefits; not including those who don't receive benefits--jef) up to 9.6 percent.

For months investors have anxiously awaited any clue of where the economy is headed, with data frequently providing a confused snap shot.

That trend appears to have continued, leaving policy makers -- including President Barack Obama -- now facing tough choices about whether further crisis measures are needed.

"The modest gain in private sector jobs confirm that the economy remains on a slow growth path, and it's going to be a long haul to rev up the jobs machine," said Bart van Ark, chief economist of The Conference Board, a business research firm.

"The current pace of employment is too slow to replace the more than 8 million jobs lost in the recession -- not in the next year or two, perhaps even not in the next five years."

The Federal Reserve's rate-setting panel meets on Tuesday, when it is expected to discuss restarting stimulus policies.

But most analysts agree the central bank will shy away from any new measures unless absolutely necessary, to avoid using one of their few remaining policy levers.

"The central bank's problem now is that any additional monetary stimulus will require unconventional methods," said Ryan Sweet of Moody's "and the cost and benefit trade-off of these are unclear."

Blackwater: Can't Stop, Won't Stop

by Fouad Pervez  |  Friday, August 6, 2010 by Foreign Policy in Focus

Blackwater (rebranded as Xe and then Paravant in an effort to escape the negative publicity associated with their former name), recently received a $100 million contract from the CIA to secure its bases in Afghanistan. The State Department also awarded them $120 million to provide security for new diplomatic buildings, including consulates outside Kabul, giving the firm a total of $220 million in new contracts in Afghanistan. This seems remarkable, given the extremely negative image Blackwater has throughout the world. That people even know about a private security company is a bad sign in itself. Not surprisingly, CIA Director Leon Panetta had to go on the offensive to defend the contracts.

The contracts are certainly problematic. But the real issue is not Blackwater itself, but U.S. military grand strategy.

From a financial aspect, it is not surprising that Blackwater got the contracts. For the CIA contract alone, Blackwater bid a full $26 million below the next lowest bidder, quite significant considering the contract was for $100 million. This low bid was made possible largely by the many huge contracts Blackwater received in Iraq. With close ties to the Bush administration, Blackwater was the 12th largest contractor in Iraq, even though it was not tasked to build embassies and roads. They pulled in almost $500 million between 2004 and 2006. They are the State Department’s most frequently used security contractor and get 90 percent of its money from the government, two-thirds of which are no-bid contracts. Thus, Blackwater built a comparative advantage over its rivals during the Bush years. This advantage, which the company still enjoys today, enables Blackwater to bid lower amounts since their profit margins are not as tight as other companies.

Garrisoning the Globe

However, the reason companies like Blackwater, even with their troubling histories, are in demand in the first place has to do with U.S. grand strategy. American foreign policy has become increasingly aggressive over the years, under both Republican and Democratic administrations. It is not just increased aggression, but increased residency — we keep a presence in more places than before. For instance, there are more than 850 U.S. military bases overseas, a number that does not include bases in Iraq, Afghanistan, or other sensitive locations. An all-volunteer army exacerbates the problem, as there are fewer troops to handle a larger mission. Engaged in two major conflicts in Iraq and Afghanistan and maintaining bases and troops in over 100 countries translates into serious military overstretch. American foreign policy from the 1940s on, especially toward Western Europe, has been consistently geared toward global hegemony. Instead of passing the buck to Western Europe at critical junctures when it would have been better and cheaper to do so, the United States undermined Western European efforts to gain military independence and autonomy during the Cold War because it was more concerned with global hegemony than the Soviet threat.

The United States seems unwilling to scale back its global military presence. The Obama administration’s National Security Strategy no longer explicitly opposes the rise of any real competitor. But the divergence with the Bush administration approach is somewhat cosmetic. Obama does call for a decrease in direct uses of power and acknowledges that America has no real rival, but does not rule out unilateral action and, more importantly, calls for a maintenance of the level of U.S. military superiority. More troops are necessary to keep up with the mission.

This is where private military contractors like Blackwater become important. These modern-day Hessians provide America a significant amount of needed foot soldiers. They come with other perks as well — they are often beyond the reach of military rules of law, allowing them greater discretion in inflicting disproportionate force to pacify areas. More significantly, increased Blackwater troops mean fewer official U.S. troops. Private military troops now outnumber U.S. troops in Afghanistan. The advantage of a private military to a political leader is the public cost. Military deaths play a significant role in American foreign policy. The rising troop deaths in Vietnam eventually turned the public against that war. However, if the soldiers are increasingly from private companies, public costs decline. Except for the occasional anomaly, such as the hanging of four Blackwater troops off a bridge in Fallujah, no news headlines announce the deaths of Blackwater soldiers.

But this increased U.S. military presence, so dependent on private contractors, has serious deleterious effects. The more troops, the more resistance. Tellingly, over 700 international relations scholars, who rarely agree on anything, opposed the Iraq War for this very reason: concern about negative ramifications of the U.S. military presence.

Blackwater Despite the Risks

Despite its horrific track record in Iraq, the connection between founder and former CEO Erik Prince and religious extremism, and the accusations that the company defrauded the federal government through phony billing, Blackwater might obtain a $1 billion contract from the U.S. government for work in Afghanistan next year. The comparative economic advantage Blackwater gained during the Bush administration explains why it's positioned to win more contracts. But the lack of change in the overall U.S. mission of global military primacy explains why private military contractors like Blackwater have the impact they have in the first place.

Congress has begun to express some reservations about the contracts. A federal commission established to study wartime contracting slammed State Department officials in a hearing over the $120 million contract they awarded to Blackwater. They were unable to get an answer from officials as to how Blackwater’s history in Iraq figured into the contract. Rep. Jan Schakowsky (D-IL), a strong Blackwater critic, strongly condemned the contract, wondering “why any branch of the government would decide to hire Blackwater, such a repeat offender. We’re talking about murder…a company with a horrible reputation that really jeopardizes our mission in so many different ways.” Senator Carl Levin (D-MI) and Representative Jim Moran (D-VA) have also been vocal about questioning Blackwater contracts.

However, the real test is whether these contracts are reversed and/or future contracts are given in a much more limited manner or with much greater scrutiny of private military companies. Except for the initial protests from several members of Congress, there has been no new congressional activity on the contracts — no hearings or investigations scheduled.

However, even if Congress does eventually act, it will have addressed only part of the problem. Without either a shift away from maintenance of America’s current global military superiority or from the current U.S. military presence in over 100 countries, there will be a serious problem of military overstretch. By either adopting a more defensive role as an offshore balancer, or significantly scaling back its global military presence, or both, the U.S. military could ameliorate its overstretch problem. Short of that, contractors like Blackwater provide political leaders a convenient “out” from the problem of a draft, which could generate a major public backlash. Because of their economic and political utility, private military contractors like Blackwater will continue getting contracts, regardless of their toxic baggage.

White House Accused of Spinning Report that "Oil is Gone'

(What a surprise, the pro-corporate White House spins (which to us means "lies") a pro-corporate tale of deceit saying the oil is gone.--jef)

by Suzanne Goldenberg | Friday, August 6, 2010 by the Guardian/UK

The White House was accused today of spinning a government scientific report into the amount of oil left in the Gulf of Mexico from the BP spill which had officials declaring that the vast majority of the oil had been removed.

As BP workers finished pouring cement into the well as a first step to permanently sealing it today, environmental groups and scientists - including those working with government agencies to calculate the scale and effects of the spill - said White House officials had painted far too optimistic a picture of a report by the National Oceanic and Atmospheric Agency (NOAA) into the fate of the oil.

"Recent reports seem to say that about 75% of the oil is taken care of and that is just not true," said John Kessler, of Texas A&M University, who led a National Science Foundation on-site study of the spill. "The fact is that 50% to 75% of the material that came out of the well is still in the water. It's just in a dissolved or dispersed form."

With work progressing on the final phase of the "static kill" sealing of the well, Thad Allen, the Obama administration's top official on the spill, told reporters there would be no new oil in the Gulf.

But those assurances failed to satisfy scientists and environmental groups, who disputed the claim by Carol Browner, the White House energy and climate adviser, that "the vast majority of oil is gone".

In Louisiana, state wildlife officials told CNN that tar balls and patches of oil were still washing up in the marshes and coastal areas of St Bernard, Plaquemines and Jefferson parishes.

Susan Shaw, a marine toxicologist and director of the Marine Environmental Research Institute, said the White House had been too quick to declare the oil was gone. "The blanket statement that the public understood is that most of the oil has disappeared. That is not true. About 50% of it is still in the water," she said.

Like other scientists, she said the report failed to explain how it reached its estimates on the amount of oil that was biodegraded naturally, or dispersed with chemicals. "There are a lot of unanswered questions."

Even the White House's own estimates still left a spill five times the size of that from the Exxon Valdez, she said, with long-term consequences that would be unknown for years to come.

Terry Hazen, the head of ecology at the Lawrence Berkeley national laboratory, who studied the spill for Noaa, said his teams could find no trace of oil on the surface or in the deep between 2km and 100km from the well site last week.

"Whatever was put into the environment, it is undetectable in the water column and the surface of water," he said. But he added: "That is not true though in the marshes or on some of the shorelines. We do know there is still oil out there."

He also said there were potential weaknesses in the analysis because of NOAA's assumptions about the size of the spill.

"When they do all of the inventories trying to estimate all of the oil and where it went there is pretty wide margins of estimates of how much was actually coming out of the well head," he said. "That complicates everything."

However, such nuances were overshadowed by the White House, which staged a high-profile event on Wednesday to announce that the well had stopped flowing, and that the consequences of the spill were not as catastrophic as once feared.

Francesca Griffo, senior scientist at the Union of Concerned Scientists, said the White House had stepped on more nuanced statements from NOAA scientists. "When these reports go through the spin machine they get distorted," she said. "If you look closely at this report, it makes it very clear that this is not over."

Rick Steiner, a former University of Alaska marine biologist, suggested that the White House had been too eager to try to put the oil spill behind it, with Democrats in Congress facing tough election fights in November.

"It seems that there was a rush to declare this done, and there were obvious political objectives there," he said. "Even if there is not a drop of oil out there, and it had truly magically vanished, it would still be an environmental disaster caused by the toxic shock of the release of 5m barrels of oil."

When Agrochemical Corporations Invented Nature

by Julio Godoy | Friday, August 6, 2010 | Inter Press Service

BERLIN - A civil society protest against a British agrochemical company that claims it has invented a particular sort of broccoli has again focused attention on the question who owns natural biodiversity, especially vegetables, seeds, and many forms of meat and animal food products.

Delegates from some 300 environmental and consumer organizations from all over the world gathered last month in Bavarian capital Munich, some 500 kilometers south of Berlin last month to demonstrate outside the headquarters of the European Patent Office (EPO) against the patent the agency accorded on broccoli seeds, plants and breeding methods to the British agrochemical company Plant Bioscience.

EPO granted the patent in 2002, on a method claimed by Plant Bioscience for increasing a specific compound in broccoli through conventional breeding methods. The patent, which also faces opposition by two other agrochemical multinationals, includes the breeding methods, and the broccoli seeds and edible broccoli plants obtained through these procedures.

The demonstration in Munich took place as the EPO opened its litigation procedure on the legitimacy of its own patent agreement. A decision on the issue is expected in October.

Plant Bioscience claims that its breeding methods increase the anti- carcinogenic glucosinolates in the species. This is one of hundreds of similar claims presented by numerous agrochemical multinational companies, such as Monsanto and Syngenta.

For environmental and consumer activists and independent farmers, such patents amount to an attempt to expropriate natural biodiversity for the benefit of a handful of corporations, which would rule as a cartel upon agriculture, especially in developing countries.

Christoph Then, expert on intellectual property rights for the environmental organization Greenpeace, told IPS that what a handful of biochemical multinational companies are doing is to "misappropriate biodiversity."

Then is co-author of a study on the 'The Future of Seeds and Food', in which he warns of the "monsantosizing of biodiversity." Earlier this year he led a successful European campaign against a patent filed by Monsanto, in which the company claimed it had invented a particular sort of ham.

Last April, EPO revoked this patent given to Monsanto in 2005. Then told IPS that the "revocation of the patent is a major success for consumers and farmers in Europe. The EPO's decision shows that even the most powerful transnational companies must give in to public pressure."

According to Greenpeace and other environmental organizations researching patent claims by agrochemical corporations, the EPO has to decide on more than 1,000 other property rights filed on vegetables, seeds and animal products presented by the firms Monsanto, Syngenta, DuPont-Pioneer, Bayer Cropscience, BASF and Dow Agrosciences, and others.

The broccoli case is typical of this battle among multinationals over conventional breeding methods. The agrochemical companies Limagrain and Syngenta, which have filed opposition against the Plant Bioscience patent, argue that the patent has to be revoked as its claims refer to an essentially biological process, and so to conventional methods.

According to the European Patent Convention, essentially biological processes are not patentable.

Despite this, most patents filed today by agrochemical multinationals concern conventional breeding methods. In a study for the Gen-Ethical Foundation, German biologist Ruth Tippe showed that the number of patents filed by agrochemical multinationals on conventional breeding methods has grown more than 20 percent since 2000.

"Nowadays, 30 percent of all patent applications on plant breeding filed by Monsanto involve conventional breeding methods," Tippe told IPS. "Before 2005, such patent applications did not reach five percent of the total."

"The patent on broccoli has become a test case for the patentability of conventional seeds and breeding methods," Franz Schaettle, director of the international campaign No Patent on Seeds, told IPS.

No Patent on Seeds represents hundreds of environmental, consumer, and farmer organizations across the world, to fight the "monsantosizing of biodiversity", and has formulated a global appeal against patents on conventional seeds and farm animals addressed to the Enlarged Board of Appeal of the European Patent Office, governments, and the executive boards of agro-business companies.

"The continuing patenting of seeds, conventional plant varieties and animal species leads to far reaching expropriations of farmers and breeders," Schaettle told IPS. "Farmers, especially in developing countries, are deprived of their rights to save their harvested seeds, and breeders are under strong limitations to use the patented seeds freely for further breeding."

Numerous examples of patent applications by agrochemicals confirm the warnings of Tippe, Schaettle, and Then. In Monsanto's patent application WO2008021413 on maize and soy, methods are claimed that are widely used in conventional breeding.

"On more than 1,000 pages and in 175 claims Monsanto apply for patents on various gene sequences and genetic variations, especially in soy and maize," Schaettle said. "Monsanto even goes as far as explicitly claiming all relevant maize and soy plants, inheriting those genetic elements. Furthermore, all uses in food, feed and biomass are listed."

By filing specific regional applications Monsanto shows especial interest in applying for this patent in Europe, Argentina and Canada.

By the same token, in patent application WO 2009011847, on meat and milk, Monsanto broadly claims methods for cattle breeding, the animals, as well as "milk, cheese, butter and meat." Other companies have also filed patents on genetic resources needed for feed and food production.

"All these patents are the backbone of a strategy for taking over global control on all levels of food production, "Schaettle said. "The patents do not stifle research and innovation; they are simply meant to block access to genetic resources and technology and to establish new dependencies for farmers, breeders and food producers."

This is particularly the case in developing countries, especially in Africa and Latin America. In such regions, in contrast to Europe, small farmers and consumer organizations do not have legal or financial resources to fight unfair patents. Under such circumstances, the likes of Monsanto can claim they have actually invented natural diversity.

Crazy Economists Are Still Defending The Wall Street Bailout As The Recession Gets Worse

Economists are still spinning fairy tales so they can celebrate bank bailouts. Too bad everybody's still broke and out of work.
By Dean Baker, AlterNet
Posted on August 6, 2010

It is amazing that angry mobs have not risen up and chased all the economists out of the country. While the greed of the Wall Street gang provided the fuel for the bubble, the economists played an essential role as enablers. This was most directly true for economists in policymaking positions, like Alan Greenspan at the Fed.

It was Greenspan's job to stop the housing bubble. A competent and honest Fed chair would have recognized the bubble by 2002 and taken whatever steps were necessary to rein it in. And we should be 100 percent clear, in spite of all the song and dance about how the financial reform bill will prevent another bailout, the Fed absolutely had all the tools needed to stop this disaster. They just lacked either the competence or the integrity, or both.

But the economists in policymaking positions are just the beginning. There are thousands of macroeconomists across the country, in government, academia and private industry who track the economy as a full-time job. It is actually a well-paid job, with many drawing six-figure salaries and big name types getting close to $1 million a year.

Given the high pay for this profession, it was reasonable to expect that they would be able to see something like the $8 trillion housing bubble that eventually wrecked the economy when it collapsed. But you can count on your fingers the number of economists who raised warnings about the housing bubble. The rest either did not see it, or didn't think it worth mentioning.

Remarkably, no economists seem to have lost their jobs for this failing. Unlike dishwashers and custodians, economists are not held accountable for the quality of their work.

Now, the economists are back telling us that we should be thankful that Congress and the Fed enacted the TARP and the other programs that saved Goldman Sachs, Citigroup, and the rest from bankruptcy. A new study by Princeton University Professor Alan Blinder and Mark Zandi, the chief economist at Moody's Analytics, examined the impact of the TARP and the related Fed and FDIC bailout programs. The study found that without the bailout, GDP would have declined by another 6.5 percent and the economy would have lost another 8.5 million jobs. In other words, things might be bad now, but if we didn't shovel trillions in loans and loan guarantees to Goldman Sachs and the rest of the Wall Street gang, they would be even worse.

Before we start thanking Goldman for taking our money, it is worth taking a closer look at the study. The big story here is the counterfactual. What does the study assume the Fed and Treasury would have done if we had not passed the TARP and the Fed had not come through with its vast array of emergency loan and loan guarantee programs?

The answer is that the study assumes that they would have done nothing. In other words, the question asked by the study is "what would the world look like if the federal government had done absolutely nothing to counter the economic and financial downturn resulting from collapse of the housing bubble?"

This counterfactual seems more than a bit unrealistic. Suppose we had let the market work its magic and put Goldman, Citigroup, Bank of America, and Morgan Stanley into bankruptcy. Suppose that once these firms were in receivership and their bank units were in the hands of the FDIC, the Fed flooded the system with liquidity. How would this situation compare with the situation where trillions of taxpayer dollars were put at the discretion of Goldman and the rest through TARP and the Fed's special facilities?

The Blinder-Zandi study tells us absolutely nothing about this scenario. In other words, Blinder and Zandi have constructed an absurdly unrealistic counterfactual and told us that the TARP was much better than this absurd scenario. This is like saying that people who don't eat chicken will starve to death. Under the counterfactual that people who don't chicken don't eat anything else either, they certainly will starve to death.

But that is not a serious analysis of the benefits of eating chicken, and Blinder and Zandi have not given us a serious analysis of the benefits of the TARP. This "it could have been worse" line should be flushed down the toilet. The reality is that greed and incompetence created an entirely unnecessary disaster. Tens of millions of people are still suffering from its consequences. And the Wall Street boys and the economists who are responsible for the disaster are all doing just fine.

People should be really angry about this and a silly study that might be used to tell them otherwise should just make them angrier.

1,500 Environmental Violations by Gas Companies Drilling in Pennsylvania & Colorado in Just Two Years

(The "clean fuel" my ass! What's clean about pumping 500 pressurized corrosive chemicals into the earth (fracking) causing contamination of the water table? These poor people can light the water from their faucets ON FIRE!!! And thanks to Dickhead Cheney's closed door Energy Commission, the natural gas industry is exempt from the most important environmental laws, such as water table contamination, etc. And this is just more evidence that energy companies are run and operated by corrupt, greedy bastards who put their profit margin above the safety of the public in their list of priorities. In fact, if we could see that list, I'm sure "public safety" comes way down the list after "hire more attorneys" and "set up offshore bank accounts" and "escape from the country" etc.--jef)

(And the gas companies, despite the claim in the report, have done nothing to clean up these people's water other than providing them filters which don't work. Oh, and they are about to start doing it in my in-laws' neighborhood in Texas. Soon, we'll be able to light their water on fire, their cats will go bald, and they'll start suffering health problems. Something else to dread in a time where there is plenty.--jef)


Shocking Negligence
This kind of oversight is a risk to both environmental and public health
By Byard Duncan, AlterNet
Posted on August 5, 2010

Since 2008, Pennsylvanians whose property sits atop the gas-rich Marcellus Shale formation have suffered through enough environmental problems to clutter an encyclopedia: A is for arsenic, found in soil at concentrations of 2,600 times what's recommended. M is for methane -- enough to blow up a concrete well. X is for the toxin xylene. Et cetera. Sometimes troubles like these occur naturally. But more and more often, they have become the M.O. of an increasingly reckless natural gas industry -- one that's been exempt from nearly a dozen important environmental laws since 2005.

A report published Monday by Pennsylvania Land Trust vividly illustrates the breadth of the gas industry's complicity in drilling accidents across the state. According to the findings, 43 gas companies operating in Pennsylvania were responsible for nearly 1,500 environmental violations between Jan. 1, 2008 and July 25, 2010. A few of these companies had more violations than actual wells drilled.

PLT's findings draw on Pennsylvania Department of Environmental Protection (DEP) records related to horizontal hydraulic fracturing, a controversial gas extraction process. "Fracking," as it's known, entails pummeling underground rock formations with water, sand and chemicals, then harvesting the methane that's released.

Of the 1,435 violations PLT reviewed, 952 were classified as "having the most potential for direct damage on the environment." These included 154 violations involving the discharge of industrial waste; 277 involving improper erosion and sediment plans developed/implemented; and 288 for improper construction of wastewater impoundments. Pennsylvania's Clean Streams Law was broken 100 times, and additional lapses -- comprising a little less than half of the total incidents -- included improper waste management, improper well casing construction, permitting violations, improper blowout prevention, and faulty pollution prevention practices.

The report (PDF), is not just limited to the violations themselves. It also ranks drilling companies in order of their compliance failures. The worst perpetrator, East Resources Inc., had 138 violations at 140 drill sites between 2008 and 2010. In second place was Chesapeake Appalachia LLC, with 118 violations at 153 wells.

Cabot Oil and Gas Corp. came in fourth, logging 94 violations at only 60 wells. Cabot, which was sued by more than a dozen families in Dimock, PA last November for allegedly contaminating their drinking water, has become a sort of unwilling case study in the dangers of fracking -- and the limits of state oversight. Since Cabot began its Marcellus operations, Pennsylvania regulators have at times banned the company from fracking and issued approximately $360,000 in fines. As recently as last Tuesday, the company was charged with spilling between 120 and 130 gallons of diesel fuel.

"Cabot is clearly amongst the worst of actors in the whole horror show that we've seen unfold," said Kate Sinding, a senior attorney with the Natural Resources Defense Council. "This report confirms what many of us have known for some time: The regulatory structure in Pennsylvania isn't up to the task of handling the Marcellus Shale boom."

The PLT's report, according to Sinding, demonstrates the reactionary nature of Pennsylvania's lawmaking. Because Pennsylvania began large-scale gas exploration in the Marcellus without adequate environmental considerations, state officials have been forced to play catch-up every time a drilling operation gets messy.
"It's like environmental whack-a-mole," she said. "This report is the proof in the pudding. Pennsylvania allowed the Marcellus Shale rush to happen before they even asked hard questions."

Her viewpoint has some merit. Many of Pennsylvania's toughest gas drilling policies weren't instituted until 2009 or 2010 -- more than a year after large-scale drilling activity began. It wasn't until July 2, 2010, for example, that drillers were required to treat their water to the safe drinking water standard for total dissolved solids (TDS); and a series of "strengthened regulations" that will "require best well design and construction practices" won't go into effect until this November.

Pennsylvania's DEP, on the other hand, views itself as a sort of front line in the fight against careless drilling practices. "We told the public right from the beginning that Marcellus drilling is industrial activity, and that there is no such thing as zero impact gas drilling of any sort," said the agency's secretary, John Hanger. "Even when the drilling is done well and with high standards, there will be impacts."

PLT's report, according to Hanger, merely illustrates how strongly Pennsylvania has regulated gas drilling violations every step of the way. "We're not going to tolerate mediocre and substandard performance," he said. "This is not actually rocket science. It's safe handling of materials, proper construction of impoundment, proper operations. This is not hard stuff to do if you have a true culture of safety."

But with BP's Deepwater Horizon disaster (and the revelations of gross regulatory mismanagement that accompanied it) highlighting the apparent lack of such a culture, environmentalists like Sinding remain skeptical.

"The extractive industries in this country have been able to operate with a dearth of oversight," she said. "When you look at fossil fuel development in this country, it includes BP. It includes mountaintop removal. You see the same problems across the board."

BP not looking for oil, not cleaning oil, not paying for the lives they've destroyed

(BP isn't cleaning up the oil and they are not paying those whose lives they have ruined, those whose livelihoods they have taken away. Watch this and tell me it doesn't piss you off when it's done.--jef)

Mag. 3.0 Earthquake hits Gulf of Mexico New Orleans Region

There is concern that this earthquake was triggered by the Deepwater Horizon Disaster and other deep water drilling in the gulf.

Recovery for the Rich

Geithner's World

Welcome to the recovery!

That's what Treasury Secretary Timothy Geithner wrote in the New York Times this week. And such good news! We've all been waiting to be told that the economy was improving, after all.

Consider: Conan O'Brien, surely one of the nation's most famous unemployed folks, just made $25 million, one of the highest prices paid for a Manhattan apartment this year. Someone's buying -- even if they got a bit of a break. The apartment was originally listed for $29.5 million!

Geithner noted, "We all understand and appreciate that these signs of strength in parts of the economy are cold comfort to those Americans still looking for work."

Indeed, Geithner doesn't want his declaration of Mission Accomplished over the economy to go the way of that other one.

It's a confusing clutch of contrasting news coming to us courtesy of the NYT. Geithner on the Op-Ed page, Conan in the real estate section - and on the front page Michael Luo reporting on the "99ers," those unemployed people who have "exhausted the maximum 99 weeks of unemployment insurance benefits."

There are about 1.4 million of them, including Alexandra Jarrin, who's profiled in the piece. She's living in a motel off borrowed money, applying for jobs to pay off her student loans and unfinished M.B.A.

She's had her first job interview in over a year this past week.

But hey, someone tell her that the economy's recovering! Conan sold his condo! Surely it won't be long now...