News Items
This morning, during a night of what can at best be described as “questionable” sleep, I spent some time skimming through the various news sources, and I thought I’d highlight a few I think people should know about…
First up, from the McClatchy Newspaper group, and article detailing a number of cases of false identification of detainees at Guantanamo Bay, men who have been detained for years, even though they are not and have never been involved with terrorism. Of course, I’ve mentioned such stories before, but it is best to remember that all the talk about the “worst of the worst” and how these are all terrorists for whom no mercy or due process are necessary ignores the simple fact that underscores all of our requirements for such things: We’re not always right, and we are supposed to be the country that does its utmost to make sure the innocent are not incorrectly punished. If you wonder why I think it is a good thing that the Supreme Court struck down the prohibition on Guantanamo and other detainees challenging their detainment in civilian court, this is why.
Speaking of incorrectly punished (we’ll have more on this in a bit), note the discussion of treatment of prisoners in our custody, specifically at Bagram and Kandahar air bases. Oh, and remember how I’ve been saying for months that our inept and ham-handed prosecution of this bogus war in Iraq has made us less safe, not more? McClatchy has documented this effect. Some of the people in our custody who never previously were terrorists acquire such a hatred for us based on their treatment in our custody that when they are returned home, they become the very thing we accused them of being. But the difference is that we manufactured them into terrorists, it was not their natural state.
I’ve just touched the surface of the article. Read the whole thing.
Next, also from McClatchy, is this article, detailing more specifics about abuse of prisoners in our custody. It makes me too sick to my stomach to think about these things, so I'm not going to repeat the contents of the article. It sure makes me feel good and proud to be an American, though, when these things were done by American officials in the name of American citizens.
And finally, from Newsweek, yet more reporting showing that our pre-war “intelligence” was flawed, and worse, there’s every reason to believe we knew it.
This internet connection here at the hotel sucks, so I’m going to stop for now, but read the articles I linked to. They’re important.
Liam.
posted by Liam at 6/16/2008 07:39:00 AM
3 Comments:
This is unrelated to your topic here. But you explain things well, and I learn a lot from you and the links you provide. So, I have a topic I hope perhaps you might write about in your blog (if you haven't already), to clarify things for this idiot (me).
I was watching last night Olbermann's story (saw it on the internet) on the Enron Loophole. Can you clarify that one for me? Following all that about the futures market and such sure is confusing. But mostly I wanted to understand the recent effort to close that loophole and if it's a reasonable measure? His story seemed to indicate all this has an effect on gas prices. Any insights are appreciated.
Thursday, June 19, 2008 7:30:00 AM
OK, let me do some research and get back to you. Unfortunately, it was raining rather badly here last night, and so my TiVo'd copy of Countdown that included that story was not easily understandable (DirecTV gets really hard to watch when the rain gets too hard). As a result, I missed much of that story.
But let me see if I can track it down and try to understand it, and then I'll come back and explain whatever I can figure out.
Liam.
Thursday, June 19, 2008 11:22:00 PM
OK, here’s what I’ve discovered so far. The “Enron Loophole” is so called because it was created after intense lobbying by Enron CEO Kenneth Lay, and essentially it’s another case of deregulation gone mad.
There is a certain segment of the population who seem to believe that all regulation on business is onerous and bad, either in the mistaken belief that companies left to police themselves will behave honorably naturally, or in the equally faulty belief that it’s perfectly OK to do just about any unethical thing in service of profit.
I’ve used this example before, but if I want to clean up my yard, I can rake up all the leaves and pile up all the sticks and dead wood, but then I have to pay someone with a wood chipper to come and mulch it all up and haul it all away. I can’t just dump it all on my neighbor’s yard and consider myself done, even though it saves me money. And yet deregulation of industry says the same is not true of business, that somehow it is unfairly onerous on a business to be prevented from dumping their pollutants into our air, water and ground (for example), or to otherwise be required to behave in a fair and ethical manner.
Don’t get me wrong, either extreme is bad, there is definitely such a thing as too much regulation, and that can honestly strangle business and creativity in this country. But as with raising children, there’s a middle ground between being so strict that it borders on child abuse and being so lenient it borders on neglect, and it is in that middle ground that you end up with well raised, well adjusted children.
Here’s one site I found that does a pretty good job of explaining it:
http://seekingalpha.com/article/81243-the-enron-loophole
Of course, no one really says what regulations were BEFORE the loophole, only that the loophole cancelled them and that unregulated speculation in the energy industry is largely responsible for spikes in prices (including much of the current spike in gas prices).
Now, I’ve never really understood how speculation and options work. Essentially, there are two kinds of options, get and put options. With a get option, you pay someone a small price for the option to later buy some good or service for a certain price later on. You’re essentially hedging your bets against the prices going up, because if they do, the person who sold you the option is required to sell you the product or service at the “strike” (or agreed upon) price. And of course if the actual market price of the goods you want to purchase drops below your strike price, you eat the initial cost of your options and buy at the lower price, you have now lost money. Put options are the opposite, you own the product and you purchase the right to sell that product at a certain strike price at a specific time in the future. So if the price of your commodity drops, you exercise your option and force the person you bought options from to buy at the higher price, but if the price of your commodity rises, you again eat the initial cost of the options and don’t exercise them, selling your commodity at the higher price.
But apparently what happens (and this is the part I’m pretty murky on) is that speculators sell “get” options to local energy companies. So when you go to your gas company and sign a contract for 1000 gallons of fuel, they can offer you a fixed price by purchasing those options and then knowing that’s all they’re going to have to pay for the fuel. However, without regulations, the speculators (who themselves just want to make money) set their strike price higher than they think they’ll be able to buy the fuel (obviously). And with the “Enron Loophole”, apparently it’s possible for one speculator or a small group of them to essentially corner the market on fuel futures, allowing them to drive the price up insanely.
If I understand it correctly, a company like Enron (they did it with electricity, but the idea is the same) makes a deal with the actual power companies to purchase options on most or all of their product at reasonable rates. The company now controls the vast majority of product and sells their options at a much higher price. And because they own so much of the product (in options form), there isn’t a whole lot of un-optioned product around to stabilize the price. The original power company can’t sell their product directly at normal prices because they’ve already promised it all to the Enron company, so instead of working like they’re supposed to, with the option as a “hedge” against future price rises, the option now DRIVES the price, and the inflated price becomes de-facto the actual price.
Of course, all of this is murky to me. I think mostly because it’s kind of esoteric, mystical, and more than a little bit shady, especially when not regulated. As with most things, it has evolved from an original useful purpose to an unintended extreme.
****************
By the way, another thing that isn’t getting reported much lately, but I’ve heard from several good sources, is that lost in all the bluster about how “liberals” are keeping the price of gas high by preventing drilling in various places like the Gulf of Mexico and the ANWR animal reserve is the fact that gas companies have barely begun tapping the places they ARE allowed to drill here. They put in wells, but they don’t pump the oil except when the price goes up to a point that they make huge amounts of money… and then they sell 90% of it internationally. Which means even if we were to open up ANWR to drilling, it wouldn’t lower our prices, because the gas companies would likely sit on those areas as well, drilling their wells and leaving them sitting idle except when the price was high.
So the quantities we’d get from ANWR and elsewhere are tiny, the amount of that which would be sold in-country is even tinier, and all of the estimates about how much could be produced assume 100% of production capacity, when the oil companies are mostly just sitting on capacity they have now and not using it.
Liam.
Thursday, June 19, 2008 11:57:00 PM
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