Three From the Inbox

$3.6 billion as a bailout seems like peanuts today, don't it. More public "Cash for Trash" coming up folks!

Remember the grand bourgeois rule: "Privatize profits and socialize losses". And the beat goes on.

Capitalism's Suicide
By Molly Ivins, AlterNet. Posted July 18, 2006.

"Back in 1998, there was this little-bitty old hedge fund called Long Term Capital Management. Because hedge funds make high-risk bets, Long Term Capital got itself in so much trouble its collapse actually threatened to wreck world markets, and regulators had to step in to negotiate a $3.6 billion bailout. A similar fiasco at this point probably would break world markets."

"So what we have here is yet another case of ideological decision-making ('all government regulation is bad') being applied despite the most obvious promptings of common sense. Come to think of it, that's exactly the same pattern this administration has followed with war in the Middle East, nuclear showdowns, global warming and Apocalypse Now."

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Paulson Bailout Plan a Historic Swindle
By William Greider, The Nation, Friday 19 September 2008

"Paulson and the Federal Reserve are trying to replay the bailout approach used in the 1980s for the savings and loan crisis, but this situation is utterly different. The failed S&Ls held real assets - property, houses, shopping centers - that could be readily resold by the Resolution Trust Corporation at bargain prices.

This crisis involves ethereal financial instruments of unknowable value - not just the notorious mortgage securities but various derivative contracts and other esoteric deals that may be virtually worthless.

Despite what the pols in Washington think, the RTC bailout was also a Wall Street scandal. Many of the financial firms that had financed the S&L industry's reckless lending got to buy back the same properties for pennies from the RTC - profiting on the upside, then again on the downside.

Guess who picked up the tab?

I suspect Wall Street is envisioning a similar bonanza - the chance to harvest new profit from their own fraud and criminal irresponsibility."

Now Is The Time to Resist Wall Street's Shock Doctrine
By Naomi Klein, Democracy Now!, 24 September 2008

"I'm also arguing that this is only stage one of the shock doctrine.

They're getting this - they're lobbying for this huge bailout, obviously, but this bailout is a kind of a time bomb, because it's all these bad debts, and they are going to explode on the next administration. I mean, we know that the Bush administration has already left the next administration with huge debt and deficit problems."

Three From the Inbox

$3.6 billion as a bailout seems like peanuts today, don't it. More public "Cash for Trash" coming up folks!

Remember the grand bourgeois rule: "Privatize profits and socialize losses". And the beat goes on.

Capitalism's Suicide
By Molly Ivins, AlterNet. Posted July 18, 2006.

"Back in 1998, there was this little-bitty old hedge fund called Long Term Capital Management. Because hedge funds make high-risk bets, Long Term Capital got itself in so much trouble its collapse actually threatened to wreck world markets, and regulators had to step in to negotiate a $3.6 billion bailout. A similar fiasco at this point probably would break world markets."

"So what we have here is yet another case of ideological decision-making ('all government regulation is bad') being applied despite the most obvious promptings of common sense. Come to think of it, that's exactly the same pattern this administration has followed with war in the Middle East, nuclear showdowns, global warming and Apocalypse Now."

---

Paulson Bailout Plan a Historic Swindle
By William Greider, The Nation, Friday 19 September 2008

"Paulson and the Federal Reserve are trying to replay the bailout approach used in the 1980s for the savings and loan crisis, but this situation is utterly different. The failed S&Ls held real assets - property, houses, shopping centers - that could be readily resold by the Resolution Trust Corporation at bargain prices.

This crisis involves ethereal financial instruments of unknowable value - not just the notorious mortgage securities but various derivative contracts and other esoteric deals that may be virtually worthless.

Despite what the pols in Washington think, the RTC bailout was also a Wall Street scandal. Many of the financial firms that had financed the S&L industry's reckless lending got to buy back the same properties for pennies from the RTC - profiting on the upside, then again on the downside.

Guess who picked up the tab?

I suspect Wall Street is envisioning a similar bonanza - the chance to harvest new profit from their own fraud and criminal irresponsibility."

Now Is The Time to Resist Wall Street's Shock Doctrine
By Naomi Klein, Democracy Now!, 24 September 2008

"I'm also arguing that this is only stage one of the shock doctrine.

They're getting this - they're lobbying for this huge bailout, obviously, but this bailout is a kind of a time bomb, because it's all these bad debts, and they are going to explode on the next administration. I mean, we know that the Bush administration has already left the next administration with huge debt and deficit problems."

Bizarre Nuclear Whine from the Times (UK)

I'm not sure why I'm posting this. Out of perverseness I suppose. All these conservatives pining over the massively socialized entities like the 90% state owned Areva and the 80% state owned EdF is just amazing. Seems to me more like a voluntary reverse "cash for trash" trade in the case of the sale of British Energy to EdF. Good on Labour for dumping it on the French.

A Sad and Bizarre End to Britain's Nuclear Adventure - The Globe and Mail - 25 Sep 08

"President Nicolas Sarkozy has carefully nurtured a national energy strategy that has brought into being nuclear, gas and oil champions with Total and Gaz de France-Suez upholding the hydrocarbon chain while EDF and Areva support nuclear ventures. There is a further plan to boost Areva by merging the company with Alstom, the turbine manufacturer and incorporating Bouygues, a major building contractor, as a shareholder.

There is no such expertise left in Britain. Instead the British Treasury viewed the sale of British Energy as a quick route to some ready cash, so feeble is the U.K. balance sheet since the nationalization of Northern Rock, the failed lender. Late in the game, Centrica threw its hat in the ring, arguing that it would be better to rebuild the nuclear fleet under a British flag with more than one reactor design rather than mortgage the future to a single Gallic spec.

Centrica got short shrift; it is a financially weaker company and its objective, to secure a supply of power for its distribution business, was plain. It had no nuclear expertise but it has secured a consolation prize with a quarter share of British Energy and the promise of a contract for 25 per cent of British Energy's future output.

No one in the world runs their energy economy quite like the British and it's not hard to see why."

Bizarre Nuclear Whine from the Times (UK)

I'm not sure why I'm posting this. Out of perverseness I suppose. All these conservatives pining over the massively socialized entities like the 90% state owned Areva and the 80% state owned EdF is just amazing. Seems to me more like a voluntary reverse "cash for trash" trade in the case of the sale of British Energy to EdF. Good on Labour for dumping it on the French.

A Sad and Bizarre End to Britain's Nuclear Adventure - The Globe and Mail - 25 Sep 08

"President Nicolas Sarkozy has carefully nurtured a national energy strategy that has brought into being nuclear, gas and oil champions with Total and Gaz de France-Suez upholding the hydrocarbon chain while EDF and Areva support nuclear ventures. There is a further plan to boost Areva by merging the company with Alstom, the turbine manufacturer and incorporating Bouygues, a major building contractor, as a shareholder.

There is no such expertise left in Britain. Instead the British Treasury viewed the sale of British Energy as a quick route to some ready cash, so feeble is the U.K. balance sheet since the nationalization of Northern Rock, the failed lender. Late in the game, Centrica threw its hat in the ring, arguing that it would be better to rebuild the nuclear fleet under a British flag with more than one reactor design rather than mortgage the future to a single Gallic spec.

Centrica got short shrift; it is a financially weaker company and its objective, to secure a supply of power for its distribution business, was plain. It had no nuclear expertise but it has secured a consolation prize with a quarter share of British Energy and the promise of a contract for 25 per cent of British Energy's future output.

No one in the world runs their energy economy quite like the British and it's not hard to see why."

Big Mistake. BIG Mistake.

McCain stiffs Letterman and pays the price.

David Letterman Reacts to John McCain Suspending Campaign - YouTube

Big Mistake. BIG Mistake.

McCain stiffs Letterman and pays the price.

David Letterman Reacts to John McCain Suspending Campaign - YouTube

Moody's and CBO 2003 on New Nuke Costs

I've been looking around for this one and I finally found what appears to be the original reference for this. Thanks to paisleychick's friends for the motivation that helped to find it.

New Nuclear Generating Capacity: Potential Credit implications for U.S. Investor Owned Utilities - Moody's Corporate Financing - May 08

"The technology is very costly, potentially reaching over $7,000 per kilowatt (kw) of capacity – by some estimates almost twice as much as new, scrubbed coal-fired power plants and three times as much as new, combined cycle natural gas power plants."

As far as archived documents go, I also recently found the Congressional Budget Office's cost analysis of nuclear power from 2003 which has an interesting note in it. Since those days the percentage covered by the government has moved up to 80% for the energy bill of 2005 and I understand that the industry is trying for 100% guarantees now.

Congressional Budget Office Cost Estimate - S.14 Energy Policy Act of 2003 - 07 May 08

"Based on current industry practices, CBO expects that any new nuclear construction project would be financed with 50 percent equity and 50 percent debt. The high equity participation reflects the current practice of purchasing energy assets using high equity stakes, 100 percent in some cases, used by companies likely to undertake a new nuclear construction project. Thus, we assume that the government loan guarantee would cover half the construction cost of a new plant, or $1.25 billion in 2011.

CBO considers the risk of default on such a loan guarantee to be very high—well above 50 percent. The key factor accounting for this risk is that we expect that the plant would be uneconomic to operate because of its high construction costs, relative to other electricity generation sources. In addition, this project would have significant technical risk because it would be the first of a new generation of nuclear plants, as well as project delay and interruption risk due to licensing and regulatory proceedings."

Moody's and CBO 2003 on New Nuke Costs

I've been looking around for this one and I finally found what appears to be the original reference for this. Thanks to paisleychick's friends for the motivation that helped to find it.

New Nuclear Generating Capacity: Potential Credit implications for U.S. Investor Owned Utilities - Moody's Corporate Financing - May 08

"The technology is very costly, potentially reaching over $7,000 per kilowatt (kw) of capacity – by some estimates almost twice as much as new, scrubbed coal-fired power plants and three times as much as new, combined cycle natural gas power plants."

As far as archived documents go, I also recently found the Congressional Budget Office's cost analysis of nuclear power from 2003 which has an interesting note in it. Since those days the percentage covered by the government has moved up to 80% for the energy bill of 2005 and I understand that the industry is trying for 100% guarantees now.

Congressional Budget Office Cost Estimate - S.14 Energy Policy Act of 2003 - 07 May 08

"Based on current industry practices, CBO expects that any new nuclear construction project would be financed with 50 percent equity and 50 percent debt. The high equity participation reflects the current practice of purchasing energy assets using high equity stakes, 100 percent in some cases, used by companies likely to undertake a new nuclear construction project. Thus, we assume that the government loan guarantee would cover half the construction cost of a new plant, or $1.25 billion in 2011.

CBO considers the risk of default on such a loan guarantee to be very high—well above 50 percent. The key factor accounting for this risk is that we expect that the plant would be uneconomic to operate because of its high construction costs, relative to other electricity generation sources. In addition, this project would have significant technical risk because it would be the first of a new generation of nuclear plants, as well as project delay and interruption risk due to licensing and regulatory proceedings."