It is in every oil supplier's best interest for prices to go up. Oil is a finite commodity. The world will eventually become more efficient and develop alternative energy sources. In the meantime, suppliers want to squeeze out as much profit as possible from their limited resources. Even if they know that the price of oil is too high (to the point of reducing demand) it is not in their interest to correct it. By setting prices in the smaller but more "trusted" futures market, oil producers realize multiplied gains on their physical oil sales.

Prices in the futures market — and, indeed, any real-life market on a standardized good — do not form where actual supply meets actual demand; they form where perceived supply meets perceived demand. Participants in the futures market merely represent the world around them. A veil has been placed over the public's eyes, and they accept this illusion of a fair price.

Unfortunately, the price set by the all-too-small futures market transcends oil to influence the entire American economy. Our oil-dependent economy is shaped by oil's arbitrarily determined price. In many ways, oil has become a pseudo-currency. Similarly, with oil traded internationally in U.S. dollars, the dollar is pegged against oil. While squeezing American industry, high oil prices also devalue the dollar. With the state of our economy reflected in the price of oil, it has become a new standard for valuing America. We are slaves to this black gold standard.

1. As early as 1985 the Federal Home Loan Lending Board (FHLLB) became concerned that shoddy lending practices at private Saving & Loans were putting the governmental insurance funds (like FDIC), and in turn the US taxpayers, at tremendous financial risk.

2. Edwin Gray, the head of the FHLLB, tried to curtail this reckless lending by putting in very modest restrictions.

3. The Lincoln Savings and Loan Association was under investigation in 1986 for being one of most reckless federally insured lenders, blatantly ignoring the new restrictions and hiding the loss of hundreds of millions of federally insured dollars.

Tensions with Russia about a deal between Washington and Poland to install a missile defense system in Eastern Europe -- seen as a threat by Moscow -- and the continued presence of Russia in Georgia contributed greatly to the bullish mood.

Light, sweet crude for October delivery jumped $6 to $121.56 a barrel on the New York Mercantile Exchange. It was crude's highest trading level since Aug. 7.

His quarrel is with the approach the Bush administration sold [the government backing of Fannie and Freddie debt] to Congress. "They should have wiped out the shareholders, nationalized the institutions with legislation that they are to be reconstituted -- with necessary taxpayer support to make them financially viable -- as five or 10 individual privately held units, and auctioned off," he says in an interview this week.

Instead, Congress granted Treasury Secretary Henry Paulson temporary authority to use an unlimited amount of taxpayer money to lend to or invest in the companies...

What's most impressive about Grace Jones' new video is it offers the viewer no access to enjoyment or thrills. The whole work is unpleasant to watch and hear--a grinding beat, a morphing monster. This is not a spectacle of corporate capital, corporate greed, corporate hunger. A spectacle seduces the thing it exploits and annihilates. With Jones as the corporate beast, there is no seduction, no sugar, no soft suffocation. Grace Jones makes every effort to fully represent the terrifying force of today's global rich.

Go back to 1985 and listen to "Slave to the Rhythm," which with good reason is referenced in "Corporate Cannibal" ("Lost in this cell, in this hell/Slave to the rhythm of the corporate prison"). Produced by Trevor Horn, the older tune has several seductions: the then-new seduction of the go-go beat; the seduction of Grace's appearance (at once elemental and futuristic), and the seduction of her lyrics, which expressed the sublime of world-historical labor.

Axe to wood in ancient times. Man machine
power line.
Fires burn
hearts beat strong.
Sing out loud the chain gang song.
Never stop the action - keep it up
keep it up.

We have in these words the same sublime that gave much of the Communist Manifesto its beauty and poetry.

The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of nature's forces to man, machinery, application of chemistry to industry and agriculture, steam navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalization or rivers, whole populations conjured out of the ground -- what earlier century had even a presentiment that such productive forces slumbered in the lap of social labor?

We are amazed and seduced by the spectacle of production itself, the awesome power of social labor.

With "Corporate Cannibal," the moment of Debord is over. We no longer look at capital (or the history of productive forces) from a safe distance ("don't cry, it's only the rhythm") but directly at its dark mouth, as if we were on a white plate, soon to be devoured. Nothing about this situation is pleasing or thrilling. All we want to do is find a way out of this place/plate; but the image of corporate hunger is fluid: it shifts its shape like some sort of digital snake ("...Digital criminal/Corporate cannibal/Eat you like an animal"). Writes Steven Shaviro:

The modulations of “Corporate Cannibal” don’t give us the sense that anything can happen, but rather one that no matter what happens, it will be drawn into the same fatality, the same narrowing funnel, the same black hole

And you can not shake the hand of this snake. You can't even mistrust it, bribe it, distract it with talk about the importance of civility (verses barbarism), of re-investment of the surplus value, or saving for a rainy day. All of those possibilities are long gone. With this form of capital, neoliberal capital, every barrier to its desire, the negation/consumption of all value, has been removed. What's left is for you to await the inevitable on a plate.

Pleased to meet you/Pleased to have you on my plate”

You won't hear me laughing/As I terminate your day/You can't trace my footsteps as I walk the other way.

Note
For those who think we are living in the fairest of times, please read this article (sent to me by Comrade Erica C. Barnett).

A taste:

How much, we asked our group, would it take to put someone in the top 10% of earners? They put the figure at £162,000. In fact, in 2007 it was around £39,825, the point at which the top tax band began. Our group found it hard to believe that nine-tenths of the UK's 32m taxpayers earned less than that. As for the poverty threshold, our lawyers and bankers fixed it at £22,000. But that sum was just under median earnings, which meant they regarded ordinary wages as poverty pay.

"We work harder and aspire the most," one said. The longer we talked, the more they turned to moral reasons for success and failure, moving away from the structural globalisation reasons given above. One banker said: "It's a fact of modern life that there is disparity and 'Is it fair or unfair?' is not a valid question. It's just the way it is, and you have to get on with it. People say it's unfair when they don't do anything to change their circumstances." In other words, they see themselves as makers of their own fortune. Or, as another banker said, "Quite a lot of people have done well who want to achieve, and quite a lot of people haven't done well because they don't want to achieve."

is bad.

Anthony, it depends on how abstract you want to be.

When you save money at a bank, most of the money gets lent out to someone else. Look at your account balance. Shift the decimal place one to the left. That's about as much of your money your bank actually keeps around.

The whole banking system relies upon the notion that:

1. These loan investments (made with your money) will eventually be repaid.
2. Huge numbers of people won't ask for all their money back at once.

Let's say 1 ends up being false--say because banks invested in a bunch of secured debt that ends up having no verifiable assets securing the debt. All of your money the bank lent out is gone. Poof.

You come by to cash a check. If we're living in the the early 1920's (or the early 2000's) the following occurs:

You: I want my money.

Bank: One moment sir!

Bank turns from you and cries out.
Bank: Calling all suckers! Please place your money here!

Sucker: Here's my money!

Bank takes the money and turns to you.

Bank: Here's your money sir!

You: Thank you!

You: I want my money.

Bank: One moment sir!

Bank turns from you and cries out.
Bank: Calling all suckers! Please place your money here!

No suckers arrive.

Bank turns to you.

Bank: Fuck you, your money is gone.

You: Fuck you! I'm ruined!

You: I want my money.

Bank: One moment sir!

Bank turns from you and cries out.
Bank: Calling all suckers! Please place your money here!

No suckers arrive.

Bank turns to the FDIC and asks for a loan. Receives such a loan.

Bank takes the money and turns to you.

Bank: Here's your money sir!

You: Thank you!

Ready for the trippy part? The FDIC, ultimately, is secured by the full faith and credit of the Federal Government. In turn, the credit of the US Government is secured, well, by you and me. The taxpayers.

The incompetent, failing bank--that has both made huge numbers of bad loans and lost the confidence of new investors--can count on one last big sucker to pay us back. Us.

Heller could not write it better.

My primary bank account is at Washington Mutual. Like everyone else who has money saved at Washington Mutual, I should be concerned. I'm not. My account is FDIC insured. Even if the whole bank goes belly up, as IndyMac just did, up to $100,000 of my investment will be returned to me. Since I'm a Stranger writer / graduate student, I do not even vaguely approach the $100,000 limit. Even if WaMu sinks, I'll float. Because, through the FDIC, I'll pay myself back all the money WaMu lost me. With my money, that I pay in taxes.

Well, not exactly. For now, the FDIC is solvent and doesn't need an infusion of cash from the Federal government. And, while investors are increasingly terrified about lending to banks like WaMu, they continue to buy up US government debt. In other words, the investors have decided most banks are too risky, forcing the banks to borrow from the FDIC instead. The FDIC in turn borrows from the federal government, that in turn borrows from the same frightened investors. Brain hurting again?

Welcome to the land of leaky abstractions.

Anthony, you're a computer guy. I have the perfect metaphor for you.

TCP, the protocol underlying the majority of the web, absolutely guarantees that a given message will arrive, complete and in order. TCP does this by using IP. IP guarantees absolutely nothing. So TCP makes the promises and attempts to deliver them with IP. Most of the time, it works splendidly.

If someone trips and pulls the ethernet cable out of the wall, TCP will keep making promises that IP cannot deliver.

The banks tripped, and the global investors are pulling their plugs out. We're promising to honor all debts, by taking the investors' money to guarantee the investors' money. It should turn out great, if we collectively believe it'll turn out great.

(Crossposted.)

I trust that some commenters here can explain just how bad this is (or not). Where's Golob? He likes graphs.

Somebody call Al Gore, we're going to need a bigger scissor-lift.

Source: Economic Research Division, Federal Reserve Bank of St. Louis

HARARE, Zimbabwe —
Zimbabwe will drop 10 zeros from its hyper-inflated currency - turning 10 billion dollars into one - the country's reserve bank said Wednesday. President Robert Mugabe threatened a state of emergency if businesses profiteer from the country's economic and political unraveling.

Shop shelves are empty and there are chronic shortages of everything including medication, food, fuel, power and water. Eighty percent of the work force is unemployed and many who do have jobs don't earn enough to pay for bus fare.

One third of Zimbabweans have become economic and political refugees. Another third is dependent on foreign food aid. But Mugabe barred non-governmental organizations from handing out food last month, claiming they were supporting the opposition.

McCAIN CALLS WALL STREET 'THE VILLAIN' IN SUBPRIME CRISIS Senator McCain put the blame on Wall Street for the home mortgage credit crisis that has roiled financial markets around the world. "Wall Street is the villain in the things that happened in the subprime lending crisis and other areas where investigations and possible prosecution is going on," Mr. McCain said during a taped appearance on ABC's "This Week" program. The Arizona Republican, who has wrapped up his party's presidential nomination, said he supports the housing bill passed by Congress on Saturday to stem foreclosures and aid Fannie Mae and Freddie Mac, the largest American mortgage-finance companies, even though it may cost taxpayers as much as $25 billion. Mr. McCain, 71, said the risk of the mortgage companies' failure is outweighed by the potential cost.

The Ford Motor Company, stunned by abysmal sales of its most profitable vehicles and a sudden shift in consumers’ tastes, said Thursday that it lost $8.7 billion in the quarter, its worst ever, and would overhaul its North American plants to focus on small cars.

The loss, equal to $3.88 a share, was mostly the result of $8 billion in write-downs because of falling demand for and resale values of gas-thirsty pickups and sport utility vehicles in the United States....

Ford said it would cut production for the rest of the year by an additional 105,000 vehicles, for a total reduction of 26 percent compared with the second half of 2007. Then, it plans to overhaul three truck factories in North America so they can build small cars and double production of gas-electric hybrid vehicles next year.

So what's the prognosis for America's most repugnant symbol of domestic excess and military-backed reliance on foreign oil--the Stretch Hummer? They actually kinda serve a function for, you know, prom-pooling.

The House is expected to vote on the bill as early as Wednesday, and it could be sent to Mr. Bush’s desk by the end of the week.

Mr. Bush had voiced objections to a $3.9 billion provision that would give grants for local governments to purchase and refurbish foreclosed properties — a provision that the White House regards as a bailout.

But Mr. Bush set aside those objections on the advice of the Treasury secretary, Henry M. Paulson Jr., who told him that the overall package was necessary to help stabilize the housing and credit markets, according to the White House press secretary, Dana Perino, who announced the switch Wednesday morning. Ms. Perino said the gravity of the crisis, coupled with Congress’ plans to recess later this summer, was the reason for the reversal.

“The president would not have signed this bill if we had a lot of extra time on our hands,” Ms. Perino said. “We don’t.” Mr. Bush believed he could have won a veto fight with the Congress, but that he had concluded a prolonged veto fight would not be good for the housing industry, she said.

The $3.9 billion provision had been a subject of dispute between Mr. Bush and Congressional Democrats for months, and for a time, at least, Democrats seemed ready to concede. Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the banking committee, said that if removing the grants from the bill was needed to get Mr. Bush’s signature, he was prepared to do so.

Something for him:

Something for the kid:

Something for everyone:

Something for every morning:

Something for America:

I'm not asking about a business reporter who covers biotech. Nor someone who reads press releases and RSS feeds of published scientific articles. I'm definitely not asking about wire reports, or reruns of New York Times articles. Is there anyone, at any of the local papers, who actually covers the scientific community in Seattle, who knows the lab managers, the budget officers, the department chairs, the graduate students and fellows? Anyone who is connected enough to know the science that isn't being done, what crucial questions are going unanswered?

I'm not gloating here. I'm horrified. Seattle is a world class scientific city, right up there with Paris, Boston, San Francisco, Tokyo and Baltimore. The University of Washington is consistently one of the largest federal grant recipients--many years second only to Johns Hopkins in total dollars, typically hovering around a billion dollars--largely due to the high quality of work being done. With all we need right now from science, to have no real press coverage, in one of the primary centers of global scientific research, is terrifying.

I don't count. I'm far to conflicted to honestly report on the state of science in Seattle. I can say there are fantastic stories to be had. Anyone out there?