Good News Amid Bad News

When you look at all the sh!t that's gone down in the past year or so:

-The financial collapse
-Soaring unemployment
-Fort Hood
-The underwear bomber
-The Times Square bombing
-Iran Elections
-Afghanistan's decent
-Iraq's decent
-and now the DeepWater Horizon debacle.

It makes you glad that Sen. McCain didn't win. Not because Pres. Obama is great mind you -

Because can you imagine all this stuff on McCain's desk? He'd have had a stroke.

-and we'd be in the era of President Palin.

*shudder*

Reverse For Hire Ad

This was total genius.

Deepwater Horizon, Spin, and the Numbers Game

Just some delightful bits making the rounds:

Gulf Spill May Far Exceed Official Estimates

The amount of oil spilling into the Gulf of Mexico may be at least 10 times the size of official estimates, according to an exclusive analysis conducted for NPR.

At NPR's request, experts examined video that BP released Wednesday. Their findings suggest the BP spill is already far larger than the 1989 Exxon Valdez accident in Alaska, which spilled at least 250,000 barrels of oil.

BP has said repeatedly that there is no reliable way to measure the oil spill in the Gulf of Mexico by looking at the oil gushing out of the pipe. But scientists say there are actually many proven techniques for doing just that.

Steven Wereley, an associate professor of mechanical engineering at Purdue University, analyzed videotape of the seafloor gusher using a technique called particle image velocimetry.

A computer program simply tracks particles and calculates how fast they are moving. Wereley put the BP video of the gusher into his computer. He made a few simple calculations and came up with an astonishing value for the rate of the oil spill: 70,000 barrels a day — much higher than the official estimate of 5,000 barrels a day.

And:

U.S. Said to Allow Drilling Without Needed Permits

The federal Minerals Management Service gave permission to BP and dozens of other oil companies to drill in the Gulf of Mexico without first getting required permits from another agency that assesses threats to endangered species — and despite strong warnings from that agency about the impact the drilling was likely to have on the gulf.

Those approvals, federal records show, include one for the well drilled by the Deepwater Horizon rig, which exploded on April 20, killing 11 workers and resulting in thousands of barrels of oil spilling into the gulf each day.

The Minerals Management Service, or M.M.S., also routinely overruled its staff biologists and engineers who raised concerns about the safety and the environmental impact of certain drilling proposals in the gulf and in Alaska, according to a half-dozen current and former agency scientists.

Those scientists said they were also regularly pressured by agency officials to change the findings of their internal studies if they predicted that an accident was likely to occur or if wildlife might be harmed.

Under the Endangered Species Act and the Marine Mammal Protection Act, the Minerals Management Service is required to get permits to allow drilling where it might harm endangered species or marine mammals.

But never fear, BP's CEO sets the record straight:

"The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume," [BP CEO Tony] Hayward said.

And besides, government and industry seem to agree - why does it matter how big the problem is?

[BP spokesman] David H. Nicholas, said in an e-mail message that “the estimated rate of flow would not affect either the direction or scale of our response, which is the largest in history."

"I think the [5,000 barrels/day] estimate at the time was, and remains, a reasonable estimate," said Dr. Lubchenco, the NOAA administrator. “Having greater precision about the flow rate would not really help in any way. We would be doing the same things."

Touché

The first step of recovery is admitting you have a problem.



Obviousy, these people have problems...

I doubt I'm anywhere near 100.

No, I'm not going to count them.

(H/t Board Game Doc)

Lewis Black vs Glenn Beck

Spoiler: Black kicks Beck's @ss.



Black's been off his form lately - nice to see him come roaring back.

Who Names This Sh!t?

You gotta hand it to the folks involved. Yes, they destroyed our economy, but they did it with retro cool named investments like Goldman Sachs' Abacus or the celestially-themed Aquarius, Cetus, and Orion from the less than stellar hedge fund called Magnetar.

But it looks like Morgan Stanley isn't so much with the poetic naming. Their financial WMD was known by the rather street name of Dead Presidents.

Looks like Morgan Stanley is also in the business of luring clients into long positions, then going short on the same deal (by itself, not a crime - but if you fail to disclose your short position, well...).

Oops.

Felix and many others are all over this new feeding frenzy. Here's some naming advice for traders of the future, courtesy of Michael Corkery:

Note to future CDO-structurers. Choose benign things like fruits, vegetables, and mountains when naming your deals.

Oh, but Michael... then they would deny us a window into their black little hearts. I look forward to a deal called the Trojan Horse or the Titanic.

Late edit: forgot to (H/t CJR)

What's Behind the Rise in Food Allergies?

Maybe it's crappy methodology... at least if you believe Dr. Marc Riedl's new study in the Journal of American Medicine Association.

Here's a nice bit from the NYT's writeup:

For their report, Dr. Riedl and his colleagues reviewed all the papers they could find on food allergies published between January 1988 and September 2009 — more than 12,000 articles. In the end, only 72 met their criteria, which included having sufficient data for analysis and using more rigorous tests for allergic responses.

“Everyone has a different definition” of a food allergy, said Dr. Jennifer J. Schneider Chafen of the Department of Veterans Affairs’ Palo Alto Health Care System in California and Stanford’s Center for Center for Primary Care and Outcomes Research, who was the lead author of the new report. People who receive a diagnosis after one of the two tests most often used — pricking the skin and injecting a tiny amount of the suspect food and looking in blood for IgE antibodies, the type associated with allergies — have less than a 50 percent chance of actually having a food allergy, the investigators found.

Lovely.

Oh, and accepted dogma? You're next:

Authors of the new report — and experts on the guidelines panel — say even accepted dogma, like the idea that breast-fed babies have fewer allergies or that babies should not eat certain foods like eggs for the first year of life, have little evidence behind them.

Cisco Wants To Dress You Up

Cameras + Motion Sensors + Impossible digital video interpolation = a pretty cool effect.


Something tells me computer renderings of unseen body parts would not be quite so seamless, but still... a fine idea.

(H/t MS)

Breaking: No-H to Add "r"

It has come to my attention that Ms. No-H is planning on becoming Mrs. No-H.

Congrads!

The Club For Growth Swings Again

While there are surely lots of factors in the primary defeat of sitting GOP senator, Bob Bennett - here's the bit (from the DesertNews) that catches my eye:

The Club for Growth, a conservative group that spent nearly $200,000 against Bennett, also cheered his demise.

"Utah Republicans made the right decision today for their state, and sent a clear message that change is finally coming to Washington," said club president Chris Chocola.

The club for growth has certainly been bringing the pain these days (ask Dede Scozzafava).

While there's hardly enough there to support any kind of broader predictions - its just interesting to see this kind of red-on-red carnage. There's been an awful lot of talk about a conservative schism - but to me it looks an awful lot more like enforcing discipline.

Stray not from the one true faith, ye conservatives... lest the Club swing for thee.

Must Be Something in the Water

The WSJ reports that oil workers in the US experience four times the death rate of their European counterparts.

A Wall Street Journal examination of the MMS's track record found several instances of the agency identifying potential safety problems and then either not requiring follow-up or relying on the industry to craft a solution. In some cases, the industry didn't do its part.

The Journal also found that the safety record of U.S. offshore drilling compares unfavorably, in terms of deaths and serious accidents, to other major oil-producing countries. Over the past five years, an offshore oil worker in the U.S. was more than four times as likely to be killed than a worker in European waters, and 23% more likely to sustain an injury, according to International Association of Drilling Contractors data, which is adjusted for man-hours worked.

Asked about The Journal's findings on its safety record and practices, MMS officials said in an interview Wednesday that the agency plans to toughen its oversight.

There's also this choice bit:

Defenders of the agency say enforcement isn't its primary responsibility. Stephen Allred, who as Assistant Secretary of the Interior oversaw MMS from 2006 to 2009, said the agency does conduct spot inspections of oil rigs, and checks operators' compliance with safety procedures. However, "Their role is not to baby-sit" the operators, he said. The agency's primary task during inspections is to verify how much oil is being pumped, which is key to another MMS duty, maximizing payments the government receives for oil and gas rights from energy producers.

What's funny about that viewpoint is that the group charged with maximizing the royalty payments is precisely the people who were up to their neck in industry collusion, sexual peccadilloes, and drugs.

It would be fair to argue that the people involved in those scandals were not regulators - but then you'd have to admit that the people in charge of the MMS "primary task" were corrupt. And then you'd logically have to ask - do secondary tasks in the MMS receive better people and more funding?

Signs point to no:

Ethical problems also hit the offshore oil program. In 2009, Donald C. Howard, the former regional supervisor of the Gulf of Mexico region for MMS, pled guilty and was sentenced to a year's probation in federal court in New Orleans for lying about receiving gifts from an offshore drilling contractor.

I Have No Idea Who Lady GaGa Is...

...but I think she works at NPR.

Crazy? No. I have video evidence, you see:



P.S. I totally heart Nina Totenberg.

(H/t CJR)

Regulatory Capture > Regulatory Exemption > DeepWater Horizon

Here's a fun series of dots, I wonder if they connect in any way:

Greg Palast on Truthout.org

Before the Exxon Valdez grounding, BP's Alyeska group claimed it had these full-time, oil spill response crews. Alyeska had hired Alaskan natives, trained them to drop from helicopters into the freezing water and set booms in case of emergency. Alyeska also certified in writing that a containment barge with equipment was within five hours sailing of any point in the Prince William Sound. Alyeska also told the state and federal government it had plenty of boom and equipment cached on Bligh Island.

But it was all a lie. On that March night in 1989 when the Exxon Valdez hit Bligh Reef in the Prince William Sound, the BP group had, in fact, not a lick of boom there. And Alyeska had fired the natives who had manned the full-time response teams, replacing them with phantom crews, lists of untrained employees with no idea how to control a spill. And that containment barge at the ready was, in fact, laid up in a drydock in Cordova, locked under ice, 12 hours away.

Nola.com -Federal regulators let BP avoid filing blowout plan for Gulf oil rig

Petrochemical giant BP didn't file a plan to specifically handle a major oil spill from an uncontrolled blowout at its Deepwater Horizon project because the federal agency that regulates offshore rigs changed its rules two years ago to exempt certain projects in the central Gulf region, according to an Associated Press review of official records.

The Minerals Management Service, an arm of the Interior Department known for its cozy relationship with major oil companies, says it issued the rule relief because some of the industrywide mandates weren't practical for all of the exploratory and production projects operating in the Gulf region.

The blowout rule, the fact that it was lifted in April 2008 for rigs that didn't fit at least one of five conditions, and confusion about whether the BP Deepwater Horizon project was covered by the regulation, caught the attention of Interior Secretary Ken Salazar.

That'd be the Minerals Management Service exempting BP from a regulation in April of 2008, right? I think I remember hearing something about the MMI in that year.

Now what was that?

Sex, Drug Use and Graft Cited in Interior Department

The report says that eight officials in the royalty program accepted gifts from energy companies whose value exceeded limits set by ethics rules — including golf, ski and paintball outings; meals and drinks; and tickets to a Toby Keith concert, a Houston Texans football game and a Colorado Rockies baseball game.

The investigation also concluded that several of the officials “frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives.”

Oh yeah, them.

Of course, not filing a plan is different from not HAVING a plan. But to take Mr. Palast's point, having a plan is also very different from actually implementing the plan.

Here's Palast again:

In the end, this is bigger than BP and its policy of cheaping out and skiving the rules. This is about the anti-regulatory mania, which has infected the American body politic. While the tea baggers are simply its extreme expression, US politicians of all stripes love to attack "the little bureaucrat with the fat rule book." It began with Ronald Reagan and was promoted, most vociferously, by Bill Clinton and the head of Clinton's deregulation committee, one Al Gore.

Americans want government off our backs ... that is, until a folding crib crushes the skull of our baby, Toyota accelerators speed us to our death, banks blow our savings on gambling sprees and crude oil smothers the Mississippi.

Then, suddenly, it's, "Where was hell was the government? Why didn't the government do something to stop it?"

The answer is because government took you at your word they should get out of the way of business, that business could be trusted to police itself. It was only last month that BP, lobbying for new deepwater drilling, testified to Congress that additional equipment and inspection wasn't needed.

(H/t trainreq)

Bad Sign

File under "Signs that make you immediately change course"

(Via the NYT)

Our Backdoor Bailout of Greece

The other day we were talking about Greece and the potential economic damage to the EU. "Do we care?" was the question.

After reading John Mauldin on the Big Picture, I'd say we care:

It now looks like almost 30% of the Greek financing will come from the IMF, rather than just a small portion. And since 40% of the IMF is funded by US taxpayers, and that debt will be JUNIOR to current bond holders (if the rumors are true) I can’t tell you how outraged that makes me.

What that means is that US (and Canadian and British, etc.) tax payers will be giving money to Greece who will use a lot of it to roll over old bonds, letting European banks and funds reduce their exposure to Greece while tax-payers all over the world who fund the IMF assume that risk. And does anyone really think that Greece will pay that debt back? IMF debt should be senior and no bank should be allowed to roll over debt and reduce their exposure to Greek debt on the back of foreign tax-payers.

I don’t think I signed on for that duty.

I certainly didn't.

I realize a taxpayer doesn't get a say in where every dollar gets spent - but you have to wonder how we arrived at a point where the Federal Reserve owns bankrupt shopping malls, the US is piping money to European banks via AIG and now somehow we're holding the equity tranche of Greece's bailout loans.

I mean, we're the biggest debtor nation on the earth, yet somehow we keep agreeing to pick up everyone's tab? How does that make any sense?

Late Edit: Barry stomps on this idea rather hard saying US exposure on Greece default amounts to $3 billion.

HuffPo's "Too Big to Jail"

HuffPo has a solid story about the lack of high-level criminal prosecutions in the mortgage meltdown.

The financial crisis has spawned hundreds of criminal prosecutions for alleged fraud. Yet so far, defendants have been mostly minor players such as real-estate agents, mortgage brokers, borrowers and a few low-level bank employees. No senior executives at large financial institutions face criminal charges.

That’s in stark contrast to prosecutions during the savings and loan scandal two decades ago, when the government’s strategy targeted and snagged some of banking's most powerful players. The approach back then succeeded in sending scores of S&L executives to prison, as well as junk-bond king Michael Milken and business tycoon Charles Keating Jr.

I mean, sure, we got Madoff and Stanford - but those were guys whose Ponzi schemes had imploded - there was hardly any alternative to locking them up.

Good on them for reminding us that white collar criminals have gone to jail in the past (Savings and Loans, Enron, anyone?)

There's video, too:



(H/t CJR)

Hello, Love Interest...I'm Leading Man

My buddy C is going to be sad. We'd always talked about making this movie someday - then we decided to take a few decades off and have kids.

Alas, you snooze you lose...



(Via Scanners with a H/t to MB)

Gulf Oil Spill: Say it With Pictures

NOLA.com has some great visuals on the Deepwater Horizon disaster. Case in point:

(H/t MissPriss)

1,000,000 Gallons a Day

The WSJ is quoting two experts who put the leak rate for the Deepwater Horizon at between four and five times the current estimate of 5,000 barrels a day:

John Amos, a geologist who has worked as a consultant with companies such as BP, ExxonMobil Corp. and Royal Dutch Shell PLC on tracking and measuring oil spills from satellite data, said NOAA raised its estimates to 5,000 barrels a day after he and his colleagues published calculations that showed the original figures were far too low based on the NOAA data. Amos has also previously participated in a joint industry-NASA study using satellite imagines to detect and track oil slicks.

Mr. Amos said the 5,000 barrels a day is the "extremely low end" of their estimates. He said, based on NOAA maps, a more realistic figure is 20,000 barrels a day.

The same article puts that in perspective thusly:

Ian MacDonald, professor of oceanography at Florida State University who specializes in tracking ocean oil seeps from satellite imagery, said there may already be more than 9 million gallons of oil floating in the Gulf [as of April 30], based on his estimate of a 25,000 barrel-a-day leak rate. That's compared to 12 million gallons spilled in the Valdez accident.

Interior Department officials said it may take 90 days to cap the leaking well. If the 25,000 barrels a day is accurate and it leaks for 90 days, that's 2.25 million barrels or 94.5 million gallons.

25,000 Barrels/day
x 42 gallons/barrel
1,050,000 gallons per day

Exxon Valdez was 12,000,000 gallons

Deepwater Horizon beats Exxon Valdez in 12 days - that'd be tomorrow.

I have to believe they'll beat six weeks to cap this thing. The NYT is posting some details on what is going to be attempted.

(H/t trainreq)

PowerPoint Makes Us Stupid

The NYT has an article, We Have Met the Enemy and He Is PowerPoint that illustrates how ingrained PowerPoint has become in the modern military.

Why is it so popular?

Here's one reason:

Commanders say that the slides impart less information than a five-page paper can hold, and that they relieve the briefer of the need to polish writing to convey an analytic, persuasive point.

I'd add two other observations:

1. Powerpoint makes the audience look at something other than the person speaking
2. Powerpoint gives the speaker something to do
   
3. They can read the slide, word for word (my personal favorite)


4. They can refer to the slide


5. They can change slides


6. and of course, they can struggle mightily with the AV equipment and blame their inept appearance on technology.

Both of these do wonders for people who dread public speaking - yet do precisely nothing to inform the audience.

Which is the central problem with powerpoint - it converts the speaker's energy into valueless effort, and tells the audience to ignore what is being said.

Just read the slide.

How many times do you sit in a presentation where the speaker and audience read the slide in unison, with the speaker's lone distinction is that they read out loud?

Bleah.

I say this as a person who has spent the past few weeks putting together powerpoint slides for a presentation that (I was told) could decide the fate of a project I'm working on.
On the appointed day, not only were the slides not used, but I was dragged along to the meeting to answer questions when they were shown.
(There were no questions - although I did get to waste an entire morning).

Watching the presentation that did take place, it was striking to see people attempting to engage in a discussion, only to be shut down because "that's in a later slide" or "we've got a lot more slides to get through."

Of course, reining in discussion is good for any meeting, but of course the purpose of the meeting is to inform and cover the agenda. Powerpoint is not an agenda unless you treat it like one (keep it short, allot time for each item and keep people to a schedule).

What happens instead is that slides get whipped up because they're easy to make, or adapt - or because there were a lot of ideas - and suddenly there are as many agenda items as there are slides.

Madness.