Canada blocks Petronas bid for Progress Energy
Published on Saturday October 20, 2012
Canada has blocked the Malaysian state-owned oil firm Petronas’ $5.17 billion bid for gas producer Progress Energy Resources, saying the proposed investment would not provide a net benefit to Canada.
Federal Industry Minister Christian Paradis did not explain his decision in a statement released just before midnight Friday, saying only that it was made after a careful and thorough review of the proposed transaction.
Petronas has up to 30 days to make any changes to the proposed deal and send it back to the federal government for another review under the terms of the Investment Canada Act.
Petronas’ offer for Progress is substantial at $5.2 billion, but it’s eclipsed by the $15.1 billion that China National Offshore Oil Co. is offering for oil producer Nexen.
Statistics: Posted by yoda — Sun Oct 21, 2012 12:46 am
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By Jim Harper
Having pled before the D.C. Circuit Court of Appeals that doing a notice-and-comment rulemaking on its strip-search machine policy is difficult and expensive, the Transportation Security Administration is dropping a cool quarter-billion dollars on new strip-search machines. That’s quite a fixation the TSA has, putting spending on new gadgets ahead of following the law.
But the writing is on the wall for the practice of putting travelers through strip-search machines and prison-style pat-downs at the government checkpoints in American airports.
On Tuesday, the D.C. Circuit ruled against a petition to have the court force TSA to move forward with taking public comments as required by law. The language of the order signals the court’s expectation, though, that the TSA will get this done, quoting the TSA’s language and, well, saying as much.
ORDERED that the petition for writ of mandamus be denied in light of the Government’s representation that “the process of finalizing the AIT Rulemaking documents so that the NPRM may be published is expected to be complete by or before the end of February 2013.” Accordingly, we expect that the NPRM will be published before the end of March 2013.
Generous court — it gave the TSA an extra month.
I imagine the folks at EPIC are preparing a filing for April 1st. No foolin’, there will be a public push to go along with it, as large or larger than the most recent.
The TSA knows it can only carry on so long in contempt of the law and the court. I expect the rulemaking documents will issue by midnight on March 31st, even if a special Sunday edition of the Federal Register has to be published to do it.
The court’s ruling is technically adverse to the petitioners, but it is better than a flat denial. The court was not going to cancel a policy that is arguably an important security measure. The best outcome was some kind of date certain with consequences for failure to act. The TSA delivered a date certain, which the court has adopted. Leaving the consequences unstated could embolden TSA to more contumacy, but I doubt it.
Once the rulemaking is in place, the strategy I laid out a year ago kicks in.
The TSA will have to exhibit how its risk management supports the installation and use of strip-search machines. How did the TSA do its asset characterization (summarizing the things it is protecting)? What are the vulnerabilities it assessed? How did it model threats and hazards (actors or things animated to do harm)? What are the likelihoods and consequences of various attacks? Risk assessment questions like these are all essential inputs into decisions about what to prioritize and how to respond.
When the insufficiency of its policymaking is shown, the policy will be ripe for review under the Administrative Procedure Act’s “arbitrary and capricious” standard and there will be a record sufficient to justify a Fourth Amendment challenge to the policy of prison-style searches of all American travelers.
Yes, the challenge to this policy is taking a long time, but pressing back on all fronts against the invasive, unneeded security state is a joy even when it requires patience.
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Land Values Hot Topic at Farm Progress Show
30 August 2012
ANALYSIS – Land values have been the buzz words of Farm Progress Show 2012, with producers keen to find out what they can expect of their primary asset in the coming year, write Gemma Hyland and Sarah Mikesell, TheCropSite editors, live from the show.
Sterling Liddell, Rabobank vice president, Food and Agribusiness Research, said commodity prices and low interest rates have been pushing land values higher very rapidly over the last five years in the US, EU and Australia to some degree.
Sterling Lidell, Rabobank Vice President, Food and Agribusiness Research.
"Commodity prices have been explosive and that has naturally translated into the primary asset that is utilised to produce commodities, and that is land," he said. "In the US, we’ve had corn prices go from roughly $2.50/bu to now we are looking at $8.00 and certainly the possibility of being much stronger."
Commodity price increases have been driven by several supply and demand factors including biofuels and the emergence of China as a major importer of commodities.
"This has put enough demand pressure on the market to force a situation where we don’t have a lot of room for error in production," he said. "When we do have an error, we get tighter stocks than we have had in the past and we see prices move to record levels. With this continuing over the last five years, land values have been naturally appreciating. Where land values are now is fairly consistent with their fundamental values, which is their ability to produce revenue."
Presented at Farm Progress Show 2012, was the Mid-Year Land Values snapshot survey, conducted by the Illinois Society of Professional Farm Managers and the University of Illinois.
The survey shows that overall, land values increased by five per cent during the first half of 2012.
Don McCabe, AFM and President of Soy Capital Ag Services, Bourbonnais, Illinois presented the findings: "Although the on-going drought has had significant impact on some of the current-year income from farm operators, we feel that in the long-term it will probably not put a significant downward pressure on farmland prices.
"We found that land prices have been steady and slightly stronger earlier this year, but we expect that they’ll continue to be stable as we go forwards.
"Even though crop yields have been damaged significantly, the higher prices for the crop that can be harvested, plus the addition of crop insurance, which is widely prevalent, and the financial strength of land owners, buyers and sellers will help bridge the gap, so we feel that total land prices will remain steady."
On 1 July, 2012, farmland prices averaged $11,200 for excellent quality farmland, $9,200 for good quality farmland, $7,800 for average quality farmland, and $5,900 for fair quality farmland.
A year ago the 2011 Mid-Year survey indicated the value of the best quality land surpassed $10,000 for the first time.
John Kerkove, Syngenta.
At Farm Progress Show 2012, Syngenta showcased their defence against common farmer complaint, corn rootworm.
John Kerkove, Agronomist for Syngenta said: "The big hot topic in Iowa over the last few years is rootworm. Iowa has become an importer of corn for our livestock and ethanol industries.
"As we’re hitting the three or four year mark of growing corn-on-corn, we’re starting to see higher levels of corn rootworm. We’re having a hard time controlling it with any trade on the market today.
"Growers may want to consider using an insecticide like Force. Syngenta has worked with Raven and John Deere to develop systems to go on the larger planters.
"Mild winters, with very little frost are one of the causes of increasing corn rootworm, plus we’re growing more and more corn, so it’s inevitable."
Statistics: Posted by yoda — Sun Sep 02, 2012 9:01 am
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By David Boaz
David Henderson offers some excerpts from Stanley Lebergott’s article, “Wages and Working Conditions,” for The Fortune Encyclopedia of Economics, now the 1st edition ofThe Concise Encyclopedia of Economics. They seem especially relevant for Labor Day:
Surely the single most fundamental working condition is the chance of death on the job. In every society workers are killed or injured in the process of production. While occupational deaths are comparatively rare overall in the United States today, they still occur with some regularity in ocean fishing, the construction of giant bridges and skyscrapers, and a few other activities.
For all United States workers the number of fatalities per dollar of real (inflation-adjusted) GNP dropped by 96 percent between 1900 and 1979. Back in 1900 half of all worker deaths occurred in two industries–coal mining and railroading. But between 1900 and 1979 fatality rates per ton of coal mined and per ton-mile of freight carried fell by 97 percent.
This spectacular change in worker safety resulted from a combination of forces that include safer production technologies, union demands, improved medical procedures and antibiotics, workmen’s compensation laws, and litigation. Ranking the individual importance of these factors is difficult and probably would mean little. Together, they reflected a growing conviction on the part of the American people that the economy was productive enough to afford such change. What’s more, the United States made far more progress in the workplace than it did in the hospital. Even though inflation-adjusted medical expenditures tripled from 1950 to 1970 and increased by 74 percent from 1975 to 1988, the nation’s death rate declined in neither period. But industry succeeded in lowering its death rate, both by spending to improve health on the job and by discovering, developing, and adopting ways to save lives.
And how about women?
By 1981 (the latest date available), women’s kitchen work had been cut about twenty hours a week, according to national time-budget studies from Michigan’s Institute of Survey Research. That reduction came about because families bought more restaurant meals, more canned, frozen, and prepared foods, and acquired an arsenal of electric appliances. Women also spent fewer hours washing and ironing clothes and cleaning house. Fewer hours of work in the home had little impact on women’s labor force participation rate until the great increase after 1950.
And, on real wages:
By 1980 real earnings of American nonfarm workers were about four times as great as in 1900. Government taxes took away an increasing share of the worker’s paycheck. What remained, however, helped transform the American standard of living. In 1900 only a handful earned enough to enjoy such expensive luxuries as piped water, hot water, indoor toilets, electricity, and separate rooms for each child. But by 1990 workers’ earnings had made such items commonplace. Moreover, most Americans now have radios, TVs, automobiles, and medical care that no millionaire in 1900 could possibly have obtained.
And why was there so much progress in real wages and working conditions?
The fundamental cause of this increase in the standard of living was the increase in productivity. What caused that increase? The tremendous changes in Korea, Hong Kong, and Singapore since World War II demonstrate how tenuous is the connection between productivity and such factors as sitting in classrooms, natural resources, previous history, or racial origins. Increased productivity depends more on national attitudes and on free markets, in the United States as in Hong Kong and Singapore.
Output per hour worked in the United States, which already led the world in 1900, tripled from 1900 to 1990. Companies competed away much of that cost savings via lower prices, thus benefiting consumers. (Nearly all of these consumers, of course, were in workers’ families.) Workers also benefited directly from higher wages on the job.
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People from Charles Murray to Rick Santorum worry about moral decline in modern America. Steven Pinker, author of The Better Angels of Our Nature: Why Violence Has Declined, sees a different reality. He writes in the New York Times:
It’s easy to focus on the idiocies of the present and forget those of the past. But a century ago our greatest writers extolled the beauty and holiness of war. [See more on this in the forthcoming March-April issue of Cato Policy Report.] Heroes like Theodore Roosevelt, Winston Churchill and Woodrow Wilson avowed racist beliefs that today would make people’s flesh crawl. Women were barred from juries in rape trials because supposedly they would be embarrassed by the testimony. Homosexuality was a felony. At various times, contraception, anesthesia, vaccination, life insurance and blood transfusion were considered immoral.
People such as the reformed slave trader who wrote the hymn “Amazing Grace,” Martin Luther King Jr., and Episcopal bishop Mariann Edgar Budde might attribute such moral progress to a better understanding of Christian faith. Pinker attributes it to a different factor:
…in one important sense, people have been getting smarter, not dumber, over time. The increase is not in raw brainpower, nor in crystallized skills like arithmetic or vocabulary, but in abstract reasoning: the ability to ignore appearances and reckon in formal categories. …
Ideals that today’s educated people take for granted — equal rights, free speech, and the primacy of human life over tradition, tribal loyalty and intuitions about purity — are radical breaks with the sensibilities of the past. These too are gifts of a widening application of reason.
Whatever the source, it’s a reality that should be considered when we try to assess the state of morality in the modern world. Some people do see it. A commenter named Evan at econlog offered a similar perspective in a vigorous debate about Bryan Caplan’s claim that average people today have more material comforts than George Vanderbilt, the builder of Biltmore, had:
One thing I haven’t heard anyone address yet is moral progress. The values of earlier time periods were sickeningly depraved. One reason I’d never want to have been born in the past, rather than today, even if my past status would have been higher, is that I enjoy being the kind of person who doesn’t burn witches, own slaves, participate in pogroms, or bash gays. I think if you asked most poor people if they’d rather be a wealthy slaveowner in the past, they’d all look at you with horror.
Perhaps Martin Luther King was right when he said, echoing the abolitionist Theodore Parker, “The arc of the moral universe is long, but it bends towards justice.”
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Progress on Letting Big Banks Fail
By SIMON JOHNSON
Simon Johnson, the former chief economist at the International Monetary Fund, is the co-author of “13 Bankers.”
The drafters of the Dodd-Frank financial reform law got an important thing right. Despite fierce pushback from the banks — and lackluster support from the White House at critical moments — the legislators communicated a key new intent: megabanks must be able to fail, and the Federal Deposit Insurance Corporation should be in charge of that liquidation process.
The F.D.I.C. was an inspired choice for this role, because it is less captivated by the “magic” of Wall Street and less captured by its money and influence than any other group of officials.
The F.D.I.C. has also long been in the business of shutting down banks while limiting the damage to taxpayers, although it did not previously have complete jurisdiction over the largest banks when they got into trouble. It could only deal with those parts that had federally insured “retail” deposits, and this turns out not to be where the biggest problems have occurred in recent times.
Charged with this mandate involving the too-big-to-fail banks and with the difficult task of potentially shutting one or more of them without disrupting the economy, the F.D.I.C. took the remarkable step of opening up its decision-making process.
By creating a Systemic Resolution Advisory Committee of informed outsiders and by Webcasting the deliberations of that group, the agency has brought perhaps an unprecedented degree of transparency to public policy for banks — a point made forcefully by Dennis Kelleher; his blog at Better Markets is a must-read for anyone who cares about financial regulatory reforms. (Disclosure: I’m a member of the committee, an unpaid position.)
Committee members hold a wide range of views. Some are quite sympathetic to our existing financial structures, some much more skeptical. You can look over the list and make up your own mind as to who is on which side, and you might want to review the recording of the Jan. 25 meeting.
There is no question that the senior leadership of the F.D.I.C. is paying attention to the committee — and at the meetings, key people are put on the spot to discuss all relevant details with well-informed committee members, who can ask a lot of follow-up questions.
It is inconceivable that any other part of our financial regulatory apparatus will ever open itself up in the same way — for example, the Federal Reserve (in both Washington and New York), the Treasury Department and the Federal Stability Oversight Council are likely to be forever opaque. They, too, should open themselves up in public to tough cross-examination by experts, but that goes directly against their aloof and perhaps arrogant culture.
The history of American public administration is littered with examples of policy gone wrong — and actions misdirected — because informed and well-meaning critics were kept at arm’s length. Information is withheld even from other agencies. Powerful special interests work their influence; the rest of society has no effective voice. Even the most energetic Congressional oversight is unlikely to work when expert critics are kept so far from the real policy action.
Within the financial sphere, if the F.D.I.C. really manages to convince the markets that big banks can and will fail — meaning that creditors face the genuine prospect of losses — that changes everything.
Once this kind of failure is a realistic option, there is more pressure for meaningful supervision, because no one wants to be the supervisor in charge when a huge financial institution goes out of business. As was the case with the Lehman bankruptcy examiner report, when a company fails, we really learn who was asleep at which switch.
Are the markets now persuaded that too-big-to-fail is really over? Not yet. As Peter Fisher of BlackRock pointed out at the meeting of the Systemic Resolution Advisory Committee, we should watch for investors demanding a higher return as compensation for the higher risk of actual failure. In other words, the interest rate at which big banks borrow would need to increase — for their holding companies, their operating subsidiaries or both.
The threat of failure for megabanks will be credible only when the F.D.I.C. can convincingly put a firewall around the losses. We need creditors to a collapsing bank to lose the value of their loans — for example, those who have lent to the bank holding company may have some part of their exposure written down and the rest converted to equity.
At the same time, there needs to be a convincing fence, in the sense that one failing megabank must not be able to bring down the rest of the financial system. The threat of liquidation for any big company will be credible only if the damage can be limited to people with direct exposure — otherwise someone at the highest level of government, presumably with the approval of the president, will override all plans and provide a backdoor bailout.
There is always a back door; the point is to make it politically unappealing and economically unnecessary to use it.
The recent failure of MF Global demonstrates that this is entirely possible. Jon Corzine must be one of the best-connected people in the country — few Wall Street financiers are as close to this administration’s power brokers. He placed big bets as if he were still running Goldman Sachs, but MF Global was only about one-twentieth the size.
People who trusted MF Global lost money (and there may have been fraud, which is a different matter and is, one hopes, subject to proper law enforcement action). But the spillover damage to the rest of the financial system was minimal. When Mr. Corzine’s bets went bad, a bailout was not discussed.
The F.D.I.C. is moving in the right direction, although there is much to do before big banks can be treated like MF Global.
Banks must be required to have a financing and legal structure within which losses can be imposed while also allowing for an orderly wind-down of the business. New management and a new board must be brought in under intense time pressure. The failure of an international bank needs ex ante cooperation agreements with other countries, particularly Britain.
Still, in a complex financial system with powerful special interests and myriad global risks, not all of which can be readily quantified, the F.D.I.C. is moving closer to a clear statement of the problem and, at a very granular level, what needs to be done. This is progress.
Statistics: Posted by DIGGER DAN — Fri Feb 03, 2012 11:05 pm
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Turk – Lehman II in Progress as Financial System Implodes
With growing fears about the European banking system, today King World News interviewed James Turk out of Spain to get his take on the situation. When asked about the ongoing crisis, Turk responded, “For a few months now I have been worrying that there would be another Lehman moment and have been expecting it before year-end. I said the failure of Dexia was not the event, and initially I thought MF Global was not big enough to cause it either. But, Eric, it is now becoming clear that the ramifications of MF Global are earth shaking, and consequently, I think we are already in another Lehman moment.”
“The big difference from 2008 is that this time around, it is taking a longer time for the crisis reach its full force. I think Jim Sinclair explained it very well in his wonderful interview with you the other day. He made two important points. Own physical precious metals to become your own central bank, which is something I have been emphasizing for years here in Europe.
Faith in the outstanding record of the Bundesbank is so high, Europeans simply believed that the ECB would make sure the euro was as good as the DMark. But in reality, the ECB and the Bundesbank are as different as night and day because the ECB is under political control, whereas the Bundesbank has always zealously guarded its independence.
So while the Bundesbank rigorously followed the rules needed to preserve a currency’s purchasing power, the ECB, in contrast, is opting for the soft political choice, like buying sovereign debt.
Jim’s second point was also critically important in my view. It was that MF Global has dealt a serious blow to the market structure itself. Eric, I think this development means the situation today will get worse than what happened in 2008. When Lehman blew up back then, people scrambled for liquidity, but the market itself continued to function.
Notwithstanding the enormous fallout from Lehman’s collapse and the disruption and distortions occurring in markets from all of the government i
“You can’t trust any counterparty anymore. Not your broker, not your bank, not the regulators, not the exchange and not even the clearinghouse. In one short stroke, MF Global has knocked out all the props holding up the one essential ingredient needed for any market to function – namely, confidence.
Frankly, Eric, what is happening right now is something few people alive today have ever experienced. But it is something we can learn about from history books. The loss of confidence in the market structure means a drop in economic activity.
There will also be a decline in living standards caused by the destruction of financial assets. In other words, your paper assets one day appear valuable and then the next day are worthless or nearly so because the counterparty failed. That is the message from the MF Global collapse that the market is now assessing.
Everyone should be carefully paying attention to what is happening on the CME, the biggest futures market in the world. The drop in volumes and open interest are a reflection of the decline in confidence in the various counterparties. The same thinking applies to the world’s stock exchanges, so watch those too.
The erosion of confidence goes hand-in-hand with a decline in trading volumes until the hyperinflationary tipping point is reached. This is when volumes in shares of commodity producers or companies producing life’s essentials soar as people buy these shares as one way of exiting from paper currency.
The aftermath of the Lehman collapse was a liquidity scramble. So precious metals prices were hit back then as people needing liquidity threw out the baby with the bath water. They sold what they could sell, not necessarily what they wanted to sell. It was a great buying opportunity, and largely irrelevant to all long-term holders and accumulators of the precious metals.
This time I have been expecting a ‘fear event,’ with money rushing into the precious metals for safety, to avoid counterparty risk. Therefore, higher metal prices will be the result. We’ll see how it plays out, but I still think a ‘fear event’ is the logical outcome we should expect. I believe that even though, like occurred in 2008, liquidity seems to be drying up again.”
When asked about the implications for gold and silver, Turk stated, “I see the outcome of this mess as inflationary because central banks have only one answer to everything, and that is print, print and then print some more. But even if I am wrong and some central bank keeps its currency from inflating and actually deflates, you will still be better off owning gold and silver.
Their price may go down, but the price of everything else would go down even more, so you would still be better off owning the precious metals. And even more importantly, physical gold and silver do not have a counterparty risk, so you never need to worry about the precious metals defaulting on some promise.
As I see it, if you don’t own some physical gold and silver, you are going to be in a bad way as the impact of the MF Global collapse continues to ripple through the markets. All of us are facing some difficult times in the weeks and months ahead as this global financial bust plays itself out, but trying to contend with this fallout without owning physical gold and silver is like going into a war without any bullets.”
Interventions with their so-called ‘bazookas,’ the market structure itself was not questioned. Today is very different….
Statistics: Posted by DIGGER DAN — Thu Dec 15, 2011 1:58 am
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