In my opinion,

This $700 Billion bailout ploy is nothing more but Bush's way trying to pay back all of whom have actually placed him into office, the presidency he and corporate America have stolen from Al Gore. His time in the presidency is almost up, so he has got to pay those he owes and return the favor he promised them.

In fact if one were to want to even speculate or call it conspiracy if you may or will; there is no real Gas Shortage Crisis. It is only a tactical diversion strategy, it is simply just their way of making the US mass populace forget about the actual high gas price. They have figured if they can make the American people worry more about the scarcity of the gas, the expensive price or cost of it would be the last thing on your mind. Thus, eventually we will simply just have to adjust to it being the norm of the situation. I mean common...

How many time have we have had many hurricane seasons in the past and never had they have ever prevented production or have caused such a chaotic idiotic blunder to the point where gasoline has gotten to become so rare and costly. Meanwhile, $10 Billion is being spent every month in Iraq.

P.S: The oil we are taking from the Middle East goes or being sold right to rich high demand China and Japan for bigger monetary profit which the big oil moguls, financial institutions, the big shot CEO's are the only ones benefiting.

* Truly all as part of the deal and pack George W. Bush made with Corporate America and his rich posses to elect him President.

Afrolatino said-

"How many time have we have had many hurricane seasons in the past and never had they have ever prevented production or have caused such a chaotic idiotic blunder to the point where gasoline has gotten to become so rare and costly. Meanwhile, $10 Billion is being spent every month in Iraq.

P.S: The oil we are taking from the Middle East goes or being sold right to rich high demand China and Japan for bigger monetary profit which the big oil moguls, financial institutions, the big shot CEO's are the only ones benefiting. "

Having been employeed by an oilfield support company for 25 years I will address the above statements. Since my involvement in that industry from 1982 until 2007 I can tell you that everytime a hurricane enters the Gulf of Mexico, evacuations take place and production is "shut in". Since that time until present larger finds or projects have taken place in deeper water and those finds normally have a larger volume of production so of course when they are shut in the decrease in raw produced product has a greater impact on the market place. When hurricane Hugo hit the island of St. Croix in 1988 the largest refinery in the hemisphere, at the time, was knocked off line for months and gasoline futures soared and inventory levels dropped. When Katrina hit South Louisiana multiple refineries were taken offline as well as offshore and transition area fields being destroyed. Combine that with severe pipeline damage from the offshore areas to the refineries and the problem escalated. There were 3 large deepwater production facilities (100,000 barrels per day+) severely damaged in Katrina and a lot of that production is just now approaching pre storm levels. The exploration aspect of the business was damaged as well, there were 8 mobile offshore drilling units (rigs) lost during Katrina. Combine that with Rita hitting a different area of the Gulf area a month later, impacting different producing fields and refineries and the problem is compounded. Rita also destroyed some drilling units and the replacements from those two storms are just now being completed. Gustav damaged some of the same fields that Katrina did and Ike destroyed 2 additional drilling rigs and shut in refining capacity for about 11 days along the gulf coast.

The price of gasoline, diesel and all related products are driven by supply and demand. In the US the problem is our demand has not waivered yet our supply has been severely impacted over the course of the last three years, combine that with lack of refining capacity (no refinery has been built in the US in 27 years) and there is your result. The US has proven reserves on the Gulf and Atlantic side of Florida, in California raw crude seeps from the sea floor, the Atlantic seaboard had proven reserves as well as the oil shale in Colorado, Wyoming, the Dakatos, all of which has been off limits for exploration and production for the last 25 years. The Alaska Nationbal Wildlife Reserve has been off limits as well and the estimated reserves there rival what Saudi Arabia has.

The oil cartel, OPEC, controls production quotas for its members and thusly controls the amount of worldwide available crude for sale outside of what we produce. Iraq is a member of OPEC and was one of its founding members, any oil produced there is the property of Iraq and not the US. By US companies rebuilding the infrastructure there we are in essence helping to increase production capacity but unfortunately we reap no benefit by being able to sell that product. Oil and its byproducts are commodities that are "traded" and if China is willing to pay $2.00 more per barrel than the US the new price is set and we must pay the new price or more to obtain a quantity that fits our needs.

While this may be an oversimplification of the issue, if we produced more of our own reserves, refined more of our own reserves and purchased less of other countries products the price would come down.

Do I agree with the CEO of the various oil comapnies making 1.75 million dollars a year plus bonuses, not hardly, but they are not the only corporations that pay top level executives that kind of salaries. Of the 25 higest paid CEO's in the US there are only 2 on the list that represent oil companies and they are number 2 and 13.

http://www.forbes.com/lists/2007/12/lead_07ceos_CEO-Compensation_Rank.html

7 of the top 25 are investment companies / banking enterprises like Bank of America, Lehman Bros, wells fargo etc.

While I do agree there are a lot of things this nation can do better internally blaming the oil companies for the current situation is not reality. The reality is that as a nation we have not permitted our own industry to keep up with new finds by placing HUGE areas off limits for exploration for the last 27 years, we have not allowed the industry to build new refining capacity utilizing newer technology (you can only expand 50 year old facilities so much). If other sectors of the US economy were regulated and restricted like the oil industry, we would not be in the finiancial mess we are in today. The US government gets paid $0.60 cents for every gallon of gasoline sold in this country for basically doing nothing. Imagine if they collected $5.00 for every computer sold or $1.00 for every cell phone.

The leading US company for alternative wind energy is T. Boone Pickens, Mesa Petroleum, an Oil company.

One of the leading company worldwide for solar energy is BP, British petroleum, an Oil Company.

If nothing else it is food for thought!

And this is why OPEC wants prices high. This is from Venezuela this morning, an OPEC nation.

Venezuela wagers all stakes on oil roulette
Imbalances in the global economy reveal growing vulnerability

Reminiscent of the months preceding Black Friday, oil accounts for 94 percent of all exports and is the only source of revenues covering imports. (File photo / F. Gerardi)
Economy To an extent greater than that of the nationals of any other country, Venezuelans' fate relies on the unpredictable casino of oil prices, as they learn every Friday, when the Ministry of Energy and Petroleum issues updated oil prices, whether the façade of wellbeing thrives on or trying times begin take their toll.

Volatility abounds, and the effect of the US crisis may bring about even greater uncertainty. From July 5th to September 19th, the Venezuelan oil barrel lost USD 37 in record time and fell to USD 88.76. Gasping for air, the country felt relieved this week as prices rebounded to USD 98.28.

A closer look at the figures posted by the Central Bank of Venezuela denotes vulnerability: in December 1982, two months prior to the ill-fated Black Friday of February 1983, oil represented 94% of exports, and import reserves to cover the equivalent of nine months were available.

A year before the price adjustment of 1989 and the Caracazo, oil exports represented 80 percent of all exports and eight months of imports were in stock. By the end of the second half of that year, crude oil sales amounted to 94.6 percent of exports and, by September 25th, 10 months of imports were in reserve.

Enervated Capitalism
Theoretically speaking, banks play a vital role in the economy by receiving deposits from customers with surplus and then using those funds to grant loans to individuals and businesses. But Wall Street's financial engineering produced changes that went on to trigger an unprecedented financial crisis.

Banks granted loans to persons with low credit ratings. Then, those loans were bundled into packages and subsequently sold to investment banks. In addition, insurance companies issued policies to secure repayment of those loans.

As reality sunk in, the myth that home prices never fall dwindled and debtors stopped honoring their mortgages. As a result, a financial snowball was set into motion, rolling over the main US savings-and-loan entity (Washington Mutual), the world's leading insurance company (AIG) and two Wall Street powerhouses (Lehman Brothers and Bear Stearns).

The US economy is showing clear signs of deceleration, unemployment has surged to 6.1 percent in August, industrial production sank 1.1 percent and retail sales hit their biggest low since September 11th, 2001.

If the United States plunges into a recession and its consumption level drops, the economies of countries supplying it with products, such as China and India, would also be affected, which may result in fewer oil consumption and, accordingly, lower crude oil prices.

These scenarios are beginning to shape up, and oil prices have been falling significantly since July's spike. Trembling stock exchanges throughout the world have left investors seeking refuge in short-term oil agreements, a situation that momentarily supports current prices.

To steer clear of an imminent crisis, Venezuelans must continue to wager their stakes on a daily basis and hope that lady luck does not surface her capricious nature.

vsalmeron@eluniversal.com

Translated by Félix Rojas

Wow, thank you for your great reply... I really do appreciate the enlightenment you have shone my way. Although you have made solid points and your facts are well backed up and I researched them and they checked out. Let us talk some more... Where in the world is Lautaro (lol)?

However, I think you fail to see where I was going with this and I did not so much blame the oil Companies even though I still believe they are still partially to blame in a lot of aspect as to why and how the oil crisis have gotten where it is at today. Like I said indeed, I suppose when there are hurricanes of course it would or may suspends a lot of operation in the golf and so forth, but never has it gotten to this magnitude of scarcity. Now we can argue and go back and forth with this all we can, but do not tell me that there are no high level of high CEO corruptions going on in the oil industries racking in major profits of the situation and them getting the big bonuses and profits has never ceased in light of the crisis.

Like I said, I slightly think you fail to see where I was going with this. I clearly indicated and said BIG CORPORATE AMERICA and that does not involve only the oil industry because the Oil Industry is not all of Corporate America. Yes or not, have I not said Financial Institutions and other investing establishments as well as large insurance companies and so forth?

P.S: Since I see you have experience in the oil field please help me clarify this as I really would like to hear your opinion on this... Is it true or not that China buys oil from Venezuela, although I am not too sure about Nigeria though. Anyway, the USA also sells oil to China as well along with other Asian nations in the region. Especially now more than ever and with deals and talk between UNOCAL and China. Look UNOCAL and CNOOC up... You know Chinese are not the only ethnic groups that are considered Asians... There are South-East & West Asians and Pacific Asians. You know how the oil business works, so tell me...


USA's main oil suppliers are Canada and Venezuela, believe it or not. Why, am I right or not? Because driving it from there is much more efficient than if the US was to have to pay to have the oil the get from the Middle East shipped by boat. Thus, the oil that America made the pack with OPEC with are merely for Public Relations with the Middle East and that oil they get over there is shipped straight to Asia since Asia is closer to the Middle East and the amount of money it would have cost the USA to actually transport that crude oil to the US would be too costly, so they sell it to other Nations in the Asian region which pays to have it shipped to them which is more lucritive for the USA to actually sell it than to transport it which would take months at sea and of which when the crude oil arrives they would have to again refine it and treat it then route it to appropriate locations and allocate the oil to all the US demand stations or clients.

Which is where our dependency on oil relies and not so much we need Middle Eastern oil for our own demands of energy, but because the profit of selling it to other nations like those are lucrative and highly profitable for both the US oil Industry and Corporate America and even the Government. Do you see where I am getting at? The US I believe, only produce and drill 65% of its own oil; the rest 35% it gets it from Canada and Venezuela verse versa...

Afro,

You mean something like this;

The best temp gig in history
Posted Sep 30 2008, 12:47 PM by Kim Peterson Rating: Filed under: Kim Peterson, JPMorgan, Washington Mutual

Congress wants to crack down on CEO mega-salaries for banks participating in the bailout. And while the politicians argue how best to do that, Alan Fishman of Washington Mutual is headed for the doors with $19 million in his pocket.

If that wasn't outrageous enough, consider this: Fishman started the job three weeks ago. I never saw the employment ad Fishman answered, but it must have read something like this:

WANTED: Top executive for train-wreck bank about to be seized by federal regulators. Must be able to look busy while FDIC sells business from under you. Previous experience with angry shareholders sitting on worthless stock a plus. Perks: $7.5 million hiring bonus and $11.6 million cash severance.

http://blogs.moneycentral.msn.com/topstocks/?fpn=the%20best%20temp%20gig%20in%20history&GT1=33009

Yeah (lol) kind of like this! So what is your take on all of this going on as an Oil man and part of Corporate America? What is your honest opinion about the $700 Billion bailout?

What is going today is what I call Pre-Modern Depression, but even before it was even admitted by the GOvernment for what it was and is, nowadays people like to refer to it as Recession or Deep Recession so it does not stir fear and chaos to the mind of the average US mass populace.

Well TexasShoe, here is a joke... You know if we take the D from Deep and add it to Recession you will get Drecession (lol) which would have been as close as it could get to them admitting it is a depression, only not a "great" one, but rather a "modern" one. So tell me more...

Afro states

P.S: Since I see you have experience in the oil field please help me clarify this as I really would like to hear your opinion on this... Is it true or not that China buys oil from Venezuela, although I am not too sure about Nigeria though. Anyway, the USA also sells oil to China as well along with other Asian nations in the region. Especially now more than ever and with deals and talk between UNOCAL and China. Look UNOCAL and CNOOC up... You know Chinese are not the only ethnic groups that are considered Asians... There are South-East & West Asians and Pacific Asians. You know how the oil business works, so tell me...


USA's main oil suppliers are Canada and Venezuela, believe it or not. Why, am I right or not? Because driving it from there is much more efficient than if the US was to have to pay to have the oil the get from the Middle East shipped by boat. Thus, the oil that America made the pack with OPEC with are merely for Public Relations with the Middle East and that oil they get over there is shipped straight to Asia since Asia is closer to the Middle East and the amount of money it would have cost the USA to actually transport that crude oil to the US would be too costly, so they sell it to other Nations in the Asian region which pays to have it shipped to them which is more lucritive for the USA to actually sell it than to transport it which would take months at sea and of which when the crude oil arrives they would have to again refine it and treat it then route it to appropriate locations and allocate the oil to all the US demand stations or clients.

Which is where our dependency on oil relies and not so much we need Middle Eastern oil for our own demands of energy, but because the profit of selling it to other nations like those are lucrative and highly profitable for both the US oil Industry and Corporate America and even the Government. Do you see where I am getting at? The US I believe, only produce and drill 65% of its own oil; the rest 35% it gets it from Canada and Venezuela verse versa...

First a couple of things,

In 2005 Unocal was "merged" with Chevron- I used merged as they were going bankrupt and Chevron agreed to aquire them.

The oil business is a true "Global Business", all oil companies have business ventures in other countries, for example Chevron (through Unocal) has a very large stake in Indonesia. Exxon is big in Nigeria and Sahkalin Island (russia), Occidental is big in Ecuador and Colombia, Hunt Oil has all but moved to Peru, Petrobras (Brazilian) has operations in the Gulf of Mexico. Other big foriegn players in the Gulf are BP (British), BHP (Austrialian) and Shell (Dutch).

This may get sort of convoluted just hang with me.

The U.S. imports about 70% of its Crude oil and we provide the other 30%.

Not all oil companies are what is called "integrated". What does that mean, an oil company that explores (drills), produces, refines and markets (retails). Basically means they cover all aspects of the industry.

The oversight of the US industry is handled by the Department of the Interior through the MMS (Minerals Management Service for offshore) and the BLM (Bureau of Land Management- onshore) Why there are two seperate groups that do the same thing is beyond me. Acreage owned by the Government (it all is) is put out to bid for the right to drill and extract the resources. Offshore it is called a Block (3 miles square) and on land it is a leasehold (size depends on state and BLM). The companies bid for the right and highest one wins. The lease MUST be drilled or explored upon in 5 years (little longer in ultra-deep water) or it reverts back to the government. After the block or lease is obtained and exploration is started and proven viable for every barrel of oil taken out of the ground the oil companies pay a royalty (read tax) to the government, to help offset the huge expense of bringing the well onstream or online the first XXX number of barrels out of the well are exempt from royalty payments or what is called Royalty Relief. THIS IS THE TAX BREAK THE OIL COMPANIES GET all other aspects of the business enterprise is just like any other corporation.

Afro (Chevron, Exxon, whomever) has an oil company and is working in Indonesia. You have gone through the same steps as working in the US except you structured a deal with the Govt. of Indonesia that you split production with your partner (the Govt. of Indonesia) 50-50 for 10 years and you only pay tax on anything over XXX amount of barrels of your half during each year. You now have XXX barrels of oil you produced in Indonesia and you sell half of it to China, what kind of transaction is that- A US company selling oil to a foriegn country or EXPORTING OIL. And what you send back to the US is Importing (Pretty strange but it is what it is)

On the other hand, Citgo in the US in a major player in refining and retail but they do no exploration or drilling here. Citgo is owned by PDVSA (Petroleos de Venezuela). PDVSA sends crude oil to its refineries here and sells directly to other refiners such as Lyondell (Dutch). Once the crude is in the US it has become imported even though the end product such as gasoline, oils etc. were produced here. So basically what I am getting at is that Saudi Aramco my be producing oil in Mexico and selling it to us and we are IMPORTING SAUDI OIL.

The US was the number one export of Venezuela for some time but not anymore, the list is as follows;
July 2008 Import Highlights: September 30, 2008

Monthly data on the origins of crude oil imports in July 2008 has been released and it shows that two countries exported more than 1.40 million barrels per day to the United States. Including those countries, four countries exported over 1.00 million barrels per day of crude oil to the United State s (see table below). The top five exporting countries accounted for 67 percent of United States crude oil imports in July while the top ten sources accounted for approximately 87 percent of all U.S. crude oil imports. The top sources of US crude oil imports for July were Canada (1.960 million barrels per day), Saudi Arabia (1.661 million barrels per day), Mexico (1.200 million barrels per day), Venezuela (1.187 million barrels per day), and Nigeria (0.741 million barrels per day). The rest of the top ten sources, in order, were Iraq (0.696 million barrels per day), Angola (0.640 million barrels per day), Brazil (0.241 million barrels per day), Algeria (0.232 million barrels per day), and Ecuador (0.226 million barrels per day). Total crude oil imports averaged 10.101 million barrels per day in July, which is an increase of (0.107) million barrels per day from June 2008.

Canada remained the largest exporter of total petroleum in July, exporting 2.383 million barrels per day to the United States, which is an increase from last month (2.359 thousand barrels per day). The second largest exporter of total petroleum was Saudi Arabia with 1.673 million barrels per day.

Crude Oil Imports (Top 15 Countries)
(Thousand Barrels per Day)
CANADA
SAUDI ARABIA
MEXICO
VENEZUELA
NIGERIA
IRAQ
ANGOLA
BRAZIL
ALGERIA
ECUADOR
RUSSIA
COLOMBIA
AZERBAIJAN
KUWAIT
CHAD

Source- http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html

OK, so now that I have answered a few and given rise to much more...........

This is a good brief explanation but for any skimming I would add some info while trying to keep it simple:

1- The packages of mortgages (MBS) were diverse in the sense they were not solely or always even mainly sub-prime. These MBS packages were sold to the investment banks and others who in turn created even more complex packages-of-packages of debt called collateralized debt obligations (CDO). There are even CDOs composed of CDOs which are composed of MBS which are composed of mortgages...so you can imagine that even an acceptable level of losses at the mortgage level is now multiplied up the ladder by these instruments.

2- the insurance bought against the default of these loans was not legitimate, regulated insurance as you or I know it, but a class of security called a credit default swap (CDS). Anyone can issue CDS contracts, they are sold over the counter between any two private parties. At the height of this activity you could take out CDS on any form of debt, or any combination of debt. You can use them in very creative manners to speculate on any market movement. For the most part the "insurers" who sold these were hedge funds and investment banks. AIG was the exception.

3- the actual problem: although there are indeed very many people late on payments or in foreclosure, the issue is not yet that too many people are defaulting for the basic (pre-packaging) system to handle. Rather as the price of the underlying homes dropped + losses began to come in, the firms behind these instruments were required to put up more collateral (CASH) or buy back these securities. They do not have enough cash, hence they become insolvent. Others appear to have enough cash but their fellow banks and funds do not trust them that this is the case and rather not play at the same table with them across other areas of finance.

The threat: the threat is that the large banks become SO scared to move cash around the system that it becomes impossible for entrepreneurs and businessmen to borrow for day-to-day or short term needs and thus the system locks up and a the financial problem becomes an economic one. This is already occurring.

solution: who knows? even if the government bail out goes through it does not guarantee bankers and investors will get comfortable moving cash around again...certainly not like before.

Damn, couldn't keep it simple after all. Anyway hope that helps.

Not with poor credit ratings but those about to loose their jobs when the borders with Mexico were opened and cheaper labour became available. 30 dollar an hour jobs turned into 10 dollar an hour jobes. Plus houses could be built cheaper with immigrant labour hired by the day.
GM, Ford, Boing etc. downsized, shuttered factories, shipped jobs abroard. So in places to stop crime they have to bulldose the houses and people live in trailer parks. Retired people can't afford to live in their locality with high taxes etc and tur into snowbirds living in trailers in Mexico etc. perhaps returning for short periods to work in their home cities when funds run dry.

S.

Take a look and digest this,

http://www.whitehouse.gov/news/releases/2007/05/20070509-12.html

Now with the elections a month a way and no real solution this is a scary thought.