On Track for the Mars Landing 2008 by bamafun


									Page 2 The Sentry May 15, 2008

who are the major players that fund numerous hedge funds and those who speculate. These companies, not OPEC, not elected officials, really do set the physical oil prices in this strange world of “paper oil.” The other 99.9 percent of Americans need to understand that the price of crude oil is not determined according to any traditional relation of supply and demand. In reality, demand is waning and supply is abundant. The price is controlled by an elaborate financial market system (computerized), as well as by the four major Anglo-American oil companies. Pure and simple, as much as 60 percent of today’s crude oil price is pure speculation – driven by large trader banks and hedge fund managers. It has nothing to do with the convenient myths of ‘peak oil demands’ during special times of the year. It has to do with control of oil and its price. And for those who (justifiably) like to blame politicians for everything – both the Republicans and Democrats are equally as indifferent and responsible for what is happening in the United States. The crucial role of the international oil exchanges in New York and London are crucial to the game that is being played. The NYMEX in New York, along with the ICE Futures in London, control global benchmark oil prices, and those benchmark prices in turn set most prices of freely traded oil cargo. This is done through the use of oil futures contracts on two grades of crude: West Texas Intermediate and North Sea Brent. A third new oil exchange, the Dubai Mercantile Exchange (DME), is like a little cousin of NYMEX, with NYMEX President James Newsome sitting on the board of DME – most of the other key personnel are either British or American citizens. The DME is engaged in trading Dubai crude. Brent is used in spot and long-term contracts to value as much of the crude oil produced in global oil markets each day. The Brent price is published by a private oil industry publication called Platt’s. Major oil producers, including Russia and Nigeria, use Brent as a benchmark for pricing the crude they produce. Brent is a key crude blend for the European market and, to some extent, the Asian market too. Since the advent of oil futures trading and the two major New York and London oil futures contracts, control of oil prices has left OPEC and gone to Wall Street. It is a classic case of the ‘tail that wags the dog.’ There are now future contracts that are often called ‘futures look-alikes.’ The only practical difference between futures contracts, and future

look-alikes contracts is that the lookalikes are traded in unregulated markets, while futures are traded on regulated exchanges. The trading of energy commodities by large firms in Over-The-Counter (OTC) electronic exchanges was exempted from the Commodity Futures Trading Commission (CFTC) oversight by a provision inserted at the behest of Enron and other large energy traders into the Commodity Futures Modernization Act of 2000 in the waning hours of the 106th Congress. What the U.S. Senate committee staff documented in the report was a gaping loophole in U.S. government regulation of oil derivatives trading – a loophole so huge, a herd of elephants could walk through it. That seems precisely what they have been doing in ramping oil prices through the roof in recent months. Despite the use by US traders of using trading terminals within the United States to trade US oil, gasoline and heating oil futures contracts, the CFTC has refused to assert any jurisdiction over the trading of these contracts. Persons within the United States seeking to trade key US energy commodities – US crude oil, gasoline, and heating oil futures – are able to avoid all US market oversight or reporting requirements by routing their trades through the ICE Futures exchange in London, instead of the NYMEX in New York. How convenient. The US government energy futures regulator, CFTC, opened the way to the present unregulated and highly opaque oil futures speculation. If may just be a coincidence that the present CEO of NYMEX, James Newsome, who also sits on the Dubai Exchange, is the former chairman of the US CFTC. Apparently in Washington doors revolve quite smoothly between private and public posts. A glance at the price for Brent and WTI futures prices since January 2006 indicates the remarkable correlation between skyrocketing oil prices and the unregulated trade in ICE oil futures in US markets. By the way, ICE Futures in London is owned and controlled by a US company based in Atlanta, Georgia. Also keep in mind that in June 2006, oil traded in futures markets at some $60 a barrel and the Senate investigation estimated that some $25 of that was due to pure financial speculation. One analyst estimated in August 2005 that US oil inventory levels suggested WTI crude prices should have been around $25 a barrel, and not $60. That would mean today that at least $50 to $70 or more of today’s $125 a barrel prices is due to pure hedge fund and financial institution speculation. However, given the unchanged equilibrium in global oil supply and demand over recent months amid the explosive rise in oil futures prices on NYMEX and ICE exchanges in New York and London, it is more likely that

as much as 60 percent of the today oil price is pure speculation. Of course, no one knows officially, except the tiny handful of energy trading banks in New York and London – and they certainly aren’t talking – at least to me. By purchasing large numbers of futures contracts, and thereby pushing up futures prices to even higher levels than current prices, speculators have provided a financial incentive for oil companies to buy even more oil and place it in storage. Over the past couple of years, global crude oil production has increased along with the increases in demand; in fact, during this period, global supplies have exceeded demand according to the US Department of Energy. They recently forecast that in the next few years, global surplus production capacity will continue to grow to between three and five million barrels per day by 2010, thereby “substantially thickening the surplus capacity cushion.” I have often said, “Profit is not a dirty word,” but gouging Americans is not considered the same as profit. In fact during natural disasters, such as earthquakes and hurricanes, gouging is considered a felony punishable by large fines and long prison sentences. Huge US or EU pension funds or banks desperate to get profits following the collapse in earnings since August 2007 and the US real estate crisis have turned to oil as one of the best ways to get huge speculative gains. The backdrop that supports the current oil price bubble is the continued unrest in the Middle East, in Sudan, in Venezuela, and in Pakistan, and firm oil demand in China and most of the world outside the US. Speculators trade on rumor, not fact. Because the OTC and London ICE Futures energy markets are unregulated, there are no precise or reliable figures as to the total dollar value of recent spending on investments in energy commodities, but the estimates are consistently in the range of tens of billions of dollars. In the meantime, until the ones in charge (members of Congress), get off their collective lazy asses, oil companies will continue to reap billions in profits every quarter and Americans will continue to see their way of life erode. Unfortunately, we are going to have to wait and see how much is too much.


When giving directions in South Florida, you should always start with the words, "Take I-95 . . . ." If you’re a snowbird or a non-working retiree, you absolutely cannot drive between the hours of 6 am and 10 am and 4 pm and 7pm. This is considered to be rush hour and you’re not in any rush. No exceptions. Some roads just stop for no reason and then start again: Congress Avenue, Lyons Road, Jog Road. Freeways can only go north and south. Not east and west. A1A and ALT A1A are the s ame streets. Traffic Lights aren’t timed and never will be. We measure the distance you travel in time not miles. If you travel more than 5-10 miles on any road in South Florida without seeing an orange Bob’s Barricade, you’re lost! If you miss your exit on I-95, it’s perfectly acceptable to back up. Once the light turns green, only three cars can go through the intersection. Eight more go through on yellow and four on red.

Know the difference between Sun Pass, Sun Fest, Sun-Sentinel, and Sun Trust. Flip flops, tank tops and baggy shorts are also known as business casual. Your blinker means nothing. English is our second language. It is perfectly acceptable to brag about the size of your generator. It is totally acceptable to be living in South Florida but not root for The Dolphins, The Marlins, The Heat or The Panthers. We have alligators here in South Florida and they WILL bite you. Don’t be stupid and try to feed or pet one. Clematis is a street not a disease. When a hurricane is headed our way, even though you have advanced warning and you are told to be prepared, you’re not a true Floridian unless you wait until the absolute last minute to go to Home Depot to pick up plywood or to Publix to stock up water, ice, beer, and potato chips. You know how to spell Okeechobee. Do NOT buy a boat. Make friends with someone who already owns a boat. That way you don’t have to deal with the headaches. There is an Okeechobee blvd, street, avenue, town, lake and county.

You weren’t born here. If you were, you’re angry that everyone else moved here. There’s always a Walgreens across the street from a CVS on almost every corner - with more being built every day. When picking up a woman on South Beach, always look for an Adams apple. It’s normal to sweat when you are putting up your holiday decorations. Jupiter is a city, not a planet. Seniors have to do their errands during the weekdays. Not weeknights or weekends - that’s for the working folks. There are three types of dolphins: Mahi-mahi, flipper, and also one called a football team. You can’t say; “this is how we did it up north”, if you think that way, then go back. No matter what they decide in Tallahassee you will never be able to figure out your property taxes. Learn how to dress in layers. It will be 95 degrees outside but inside any restaurant or business it’s 65 degrees. There are three things you will need to survive a south Florida winter: A long sleeved T-shirt, sunscreen and restaurant reservations that you make at least three weeks in advance. The same neighbor who smiles at you every day will be the first one to rat you out if you are violating water restrictions.

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Massive Everglades restoration project halted
A massive Everglades restoration project will be put on hold pending the outcome of a lawsuit by environmentalists, a move that could end up costing the state nearly $14 million just for the delays. The board of the South Florida Water Management District voted Thursday to halt construction of a mammoth reservoir, bigger than Manhattan, designed to revive the ecosystem of the once-famed River of Grass. The 25-square-mile aboveground reservoir - the largest of its kind in the world - is estimated to cost up to $800 million and was set for completion in 2010. The district has already spent about $250 million on construction. No one disagrees that storing runoff water is key to reviving the Everglades, but the restoration effort has for years pitted environmentalists against the government. The Natural Resources Defense Council sued over the reservoir, claiming the state has not legally committed itself to using the water primarily for restoration efforts. The state insists at least 80 percent of the water will be for environmental purposes, but critics fear that without a legally binding agreement, the water could be sent elsewhere for agriculture or development. Council attorney Brad Sewell said the intent of the lawsuit is not to stop construction, but to bind the district legally to its own resolution passed last year by its board agreeing the water will be used mostly for the environment. The district, however, fears that if a federal judge revokes its permits for the project because of the lawsuit, millions of dollars could be lost. “It will be much more expensive if we got into the middle of this contract and then all of a sudden it gets shut down,” said district spokesman Randy Smith. “The board’s decision was made solely on prudent financial responsibility to the taxpayers.” The district board anticipates construction could be halted through the end of the year. The board agreed to stop construction as of June 1 and begin paying its contractors $1.9 million for each month the project is delayed, up to $14 million by the end of 2008. The district also is not ruling out the possibility that the project could be terminated altogether. “It makes no sense for them to stop this reservoir because of our litigation,” Sewell said. “We have never tried to stop this reservoir. Everyone agrees that the Everglades desperately needs more storage to provide more water flows.” Water once flowed practically unhindered from the Everglades headwaters south of Orlando all the way into Florida Bay. But now when a hard rain falls, canals direct the overflow into the ocean to keep from inundating 5 million people who have settled in the area. It also has left the wetlands parched and near ecological collapse. That’s where the massive reservoir just south of Lake Okeechobee comes in. Its intent is to store up to 62 billion gallons of water that would normally be channeled out to sea and instead divert it into the Everglades at various times to mimic a more natural flow. The entire wetlands once covered more than 6,250 square miles, but have shrunk by half, replaced with homes and farms and a 2,000-mile grid of drainage canals. In the process, the Everglades has lost 90 percent of its wading birds, and 68 threatened or endangered species face extreme peril. The overall Everglades project, including the reservoir, is the largest such wetlands restoration effort in the world. Much of its cost was supposed to be split 50-50 by the federal government and the state. But because Congress hasn’t allocated its share, many aspects of the work have been delayed. In 2000, the key parts of the restoration were estimated to cost $7.8 billion and take 30 years to finish. The price tag has now ballooned by billions of dollars because of rising construction and real estate costs.

North Broward Democratic Club Meeting
The public is invited to hear State Representative Jack Seiler review recent budget cuts and legislation passed by the Florida Legislature at the North Broward Democratic Club meeting held at 7:30 p.m. on Wednesday, May 28. It will be held at the Pompano Beach Civic Center, 1801 NE 6th Street, Pompano Beach, 33060. Refreshments will be served. The meeting is free and no reservations are necessary. For more information, call 954-785-0960.


the reptiles. “As soon as you know they’re breeding, eradication gets to be out of the question,” he said. “Females may store sperm, so they can produce fertile clutches for years. And a 100something pound snake can easily be producing 60, 80 eggs a year.” State rules that went into effect this year should help, including a $100 annual permit to own “reptiles of concern,” and a mandatory microchip, he said. But it’s imperative that more be done to educate people about the problem of turning loose non-native species, he said. Other highlights from Mazzotti’s fact sheet, which can be found at http:// edis.ifas.ufl.edu/UW286: * From 2002-2005, 201 pythons were captured or found dead in and around Everglades National Park. In 20062007, the number more than doubled, to 418. Everglades wildlife biologist Skip Snow has estimated the population at more than 30,000. * Since May 2006, trackers have found seven pregnant female snakes and one nest of eggs; one recently captured python had 85 developing eggs. * Autopsied pythons found in Key Largo contained the remains of the endangered Key Largo woodrat. Other species on the pythons’ prey menu include rabbit, gray squirrel, fox squirrel, domestic cats, raccoons, bobcats, white-tailed deer, limpkin, white ibis and the American alligator. * Not only are pythons fantastic swimmers, they can cover a lot of ground, as well. Two pythons with surgically implanted radio transmitters were found to have traveled 35 miles and 43 miles. Trackers stepped in and caught the male, concerned that it was too close to homes near a Miccosukee Indian Reservation

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