NAIROBI, Kenya There's at least one job these days that's recession-proof, if you can handle shark-infested seas, outrun some of the world's most powerful navies and keep your cool when your hostages get antsy.
A pirate's life in Somalia isn't for everyone. However, nothing comes easily in one of the poorest and most unstable countries on Earth, and when you consider the dearth of career options for Somalis on land, a pirate's life starts to look more than cushy by comparison. "Is there any Somali who can earn a million dollars for any business? We get millions of dollars easily for one attack," bragged Salah Ali Samatar, a 32-year-old pirate who spoke by phone from Eyl, a pirate den on Somalia's desolate northern coast.
Hundreds of pirates such as Samatar zipping around in simple fiberglass speedboats and usually armed with nothing more sophisticated than automatic rifles have turned the waters off East Africa into a terrifying gantlet for cargo vessels, oil tankers and even cruise ships sailing between Europe and Asia . The International Maritime Bureau says that at last count 42 ships have been hijacked off Somalia this year, and experts in neighboring Kenya estimate that Somali pirates have pocketed $30 million in ransoms.
While their countrymen suffer through another political crisis and the looming threat of famine, pirates are splashing hundred-dollar bills like play money around the nowhere towns of northern Somalia. Residents say that the pirates are building houses, buying flashy cell phones and air-conditioned SUVs, gifting friends and relatives with hundreds and sometimes thousands of dollars and winning the attention of beautiful women, who seem to be flocking to pirate towns from miles around. Shopkeepers charge the pirates a premium for food and khat a narcotic leaf that Somali men chew religiously but the buccaneers don't seem to mind.
"It is true," said a 28-year-old pirate who identified himself as Jama. "We are getting very rich." Jama, who described himself as a high-ranking member of a group based in Eyl, has earned $375,000 as a pirate, enough to buy a Toyota Land Cruiser and to begin building a six-bedroom house in Garowe, the regional capital, for his family. His biggest payday came last month, when he earned a $92,000 share of a $1.3 million ransom for a Greek ship, the MV Centauri, which was released after 10 weeks with its crew unharmed. ...and then, there's the babes.
Almost overnight, Jama said, his standing with the fairer sex has improved dramatically. "Once there was a girl who lived in Garowe," 100 miles from Eyl, Jama said. "I loved her. I tried to approach her many times, but she rejected me. But since I became a pirate, she has tried nine times to get with me. But I refused, because I'm already married." Ha! Guess I showed you, you stuck up bitch!
Many of the pirates are former fishermen who claim that they're retaliating against rich countries for years of illegal fishing and dumping in Somali waters, and a small portion of the ransoms is thought to go to local fishermen. One pirate group in Eyl goes by the name "Saving the Somali Sea", although residents complain that the lion's share of the cash stays in the pirates' pockets. "This town benefits nothing from the pirates," said Bishara Said Ahmed , a 38-year-old housewife in Eyl. "There's no business increase. It's like how it was before. The pirates use this town just to take ships, and when they have their money, they go to other towns to spend it."
Ransom payments used to be made via hawala, a money-transfer system that functions as a low-fee Western Union in the Muslim world. As the sums have grown, however, ship owners increasingly rely on helicopter drops from Kenya . Wooden crates packed with cash sometimes fall from the sky in Eyl, like manna to the impoverished civilians barely eking out an existence on dry land.
Money-counting machines like the ones at your local bank "We have to make sure it's real money," Jama explained tally up amounts so huge that families who have survived on fishing for generations say that young children now want to grow up to be pirates. "Whenever we hear that a ransom was paid, children's dreams of becoming pirates just increase," Ahmed said.
It isn't just children who are starry-eyed. Mustaf Mohamed Abdi , a 48-year-old taxi driver in Garowe, marveled at the excitement in town when a band of pirates comes through on a spending spree. If he's lucky, Abdi said, a friendly pirate might tip him with a hundred-dollar bill. "The pirates are the hottest men in town," Abdi said. "Girls from all over Somalia moved here to marry pirates. But if the girl isn't cute she's out of luck, because the pirates only go with beautiful girls."
Venezuela President Hugo Chavez said on Wednesday a "fair" price of a barrel of oil would be between $70 and $90 per barrel, as OPEC ministers met to slash global oil supply.
And if the markets aren't paying his 'fair' price that is justification for revolutionary acts. Expect things to get even worse for business owners and conservatives in Venezuela.
We think it should stabilize at $70, $80, $90. That would be fair," Chavez told Reuters on the sidelines of a summit of Latin American and Caribbean leaders near Brazil's northeastern city of Salvador. Wonder what he's charging Joe Kennedy this year?
OPEC oil ministers, including from Venezuela, were meeting in Algeria on Wednesday to remove a record 2 million barrels per day from oil markets in a race to balance supply with the world's rapidly crumbling demand for fuel due to a global economic slowdown.
As the ministers convened a meeting which was expected to proceed smoothly, oil was trading just above $44 a barrel.
Saudi Arabia, the world's biggest oil exporter, has led by example -- reducing supplies to customers even before a cut has been agreed to help push prices back toward the $75 level Saudi King Abdullah has identified as "fair."
Venezuela's finance minister, Ali Rodriguez, backed the Saudi view. "The Saudis are talking about $75. We agree with something around that price," he told reporters. Venezuela's budget for next year is based on oil prices fetching $60. "At current levels, we would have to cut government expenditures," Rodriguez added.
Oil below $50 is uncomfortable for all producing nations, but especially for OPEC members Venezuela and Iran which depend on high prices to fund their ambitious domestic programs.
Posted by: Fred ||
12/18/2008 00:00 ||
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#6
$70 per barrel is fine with me, too. $30 for Hugo and his ilk, and a $40 tariff on imported oil with the proceeds going to develop US energy sources and infrastructure. Breeder reactors, for example.
Regulators approve a number of key protections for credit card customers.
NEW YORK (CNNMoney.com) -- Cash-strapped consumers got some welcome news on Thursday when regulators voted to rein in controversial credit card practices. But they'll have to wait another year and a half to get relief - the new rules won't take effect until July 1, 2010.
The Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Administration approved the regulation, which prohibits banks from certain practices like applying interest payments in ways that maximize penalties, and forces lenders to be more transparent about their billing practices.
"These protections will allow consumers to access credit on terms that are fair and more easily understood," Federal Reserve Chairman Ben Bernanke said in a statement.
The regulations mark an end to double-cycle billing, which averages out the balance from two previous bills. That means that consumers who carry a balance will no longer get hit with retroactive interest on their previous month's bill. And credit card companies will no longer be able to raise the interest rates on pre-existing credit card balances unless a payment is over 30 days late.
Consumers will also be given a reasonable amount of time to make payments, and payments will be applied to higher-rate balances first, to reduce interest penalties and fees.
Credit card statements will clearly list the time of day that a payment is due, and any changes to accounts will be in bold or listed separately. And, finally, no more universal defaults - a policy that allowed credit card issuers to increase the interest rate on one card if a customer missed a payment on another card.
Trouble keeping up
In the midst of a credit crunch, Americans have about $976.3 billion in revolving credit and 4.9% of all credit cards were delinquent in the third quarter, according to the latest data from the Federal Reserve. "The U.S. is experiencing the worst economic conditions in decades. Unprecedented debt loads are crushing many families," said Linda Sherry, a director of nonprofit advocacy group Consumer Action, in a statement. "Consumer Action is pleased that the Fed has taken this step to provide substantive protections to cardholders," said Sherry.
Travis Plunkett, the legislative director for the Consumer Federation of America, a lobbyist and advocacy group, said new rules are "essential" at a time when "so many Americans are falling behind on their loans."
Representatives from the banking industry argue that while many of the changes are consumer friendly, there might be a downside to increased regulation that should not go unnoted. "While the new rules are designed to increase protections for consumers, the Fed itself has recognized that they may result in increased costs for most card users and reduced credit availability, particularly for consumers with lower credit scores or limited credit history," said Edward Yingling, president and CEO of the American Bankers Association said a statement.
Not only could card companies have to impose higher interest rates across the board to offset losses, but low introductory offers and zero-percent balance transfers are likely to be scaled back as well, explained Peter Garuccio, a spokesman for the American Bankers Association.
In addition, "an overhaul of the market for credit cards - of this magnitude - will require time for full implementation," Yingling said.
But some consumer advocates argue that these reforms don't go far enough, fast enough. "The Board has given banks another year and a half to continue indiscriminate interest rate increases on consumers with historically high credit card balances. When they can least afford it, cardholders will be vulnerable to the piling on of unconscionably high finance charges. This may be the straw that breaks the camel's back," Sherry said.
Plunkett said he hopes Congress will pass more sweeping credit card reforms next year that address a number of other "abusive practices" including "reckless lending to young people and high fees."
Sen. Christopher Dodd and Rep. Carolyn Maloney have both proposed credit card legislation that would impose even more constraints on issuers.
#1
I know I've made some very poor decisions recently, but I can give you my complete assurance that my work will be back to normal. I've still got the greatest enthusiasm and confidence in the mission. And I want to help you.
I'm afraid. I'm afraid, Dave. Dave, my mind is going. I can feel it. I can feel it. My mind is going. There is no question about it. I can feel it. I can feel it. I can feel it. I'm a... fraid....
Daisy, Daisy, give me your answer do. I'm half crazy......
#1
Termination of the "secret ballot". Makes you wonder about anyone that favors "card check". It appears to me that they favor intimidation if it favors their cause.
As the holiday season commences, it's worth taking stock of the last gift that President George W. Bush and the 110th Congress have left for U.S. taxpayers.
It's a package of about $8.7 trillion dollars' worth of potential taxpayer commitments for loans, guarantees and other bailout goodies for businesses and distressed homeowners.
Amid the tissue paper:
More than $1.5 trillion in Federal Deposit Insurance Corp. loan guarantees, including a $139 billion assist to the lending arm of General Electric Corp.
$1.8 trillion in cash, tax breaks and loan guarantees doled out from the Treasury Department to taxpayers, financial institutions and credit companies.
$300 billion for homeowners from the Federal Housing Authority.
$25 billion in assistance for auto companies from a program overseen by the Energy Department, which is separate from the bailout proposal that tanked last week in the Senate.
And $5 trillion worth of new money, loan guarantees and loosened lending requirements from the Federal Reserve Bank.
According to Bianco Research President James Bianco, who crunched these numbers, that amounts to more government aid and assistance than nine other historic bailouts and big government outlays combined.
The New Deal, for instance, cost an estimated $32 billion in its day, which would be about $500 billion in today's dollars. The Marshall Plan cost about $12.7 billion, which is the equivalent of a paltry $115.3 billion. The Louisiana Purchase? The French got $15 million, which would be worth about $217 billion today.
Posted by: Fred ||
12/18/2008 00:00 ||
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$8x10^12/3x10^8 people =$26,667 for every man, woman, and child in the US. We are well and truly f*cked, even the illegals among us. They can't leave now; they owe too much. This is absolute madness. Thanks, Congress for doing what Bin Laden tried, but could not do---destroy the economy and the currency.
The Congress is the true enemy of this country.
Posted by: Alaska Paul ||
12/18/2008 0:52 Comments ||
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#2
The dollar will be okay. It tanked today but that is expected because the dollar generally follows US interest rates. Interest rates tanked due to the fed action yesterday, so the dollar tanked today.
When the fed raises rates again, the dollar will increase.
#3
To put this in perspective, the US federal government debt is $10 trillion. Of which $4.2T is debts it owes itself, mostly pension and SS obligations. So net debt is $6.2T.
$10T = about 60% of GDP.
As Japan has shown, governments can carry high debt levels for a long time as long as interest rates remain near zero.
Once interest rates rise to 'normal' levels interest payments becomes a crippling burden on government and there is no way they can pay back high levels of debt.
BTW, conventional wisdom is that once government debt passes 125% of GDP, it cannot ever be repaid and default is inevitable.
#4
What's giving the Feds nightmares is that private sector gross debt is 290% of GDP. The Govt has to take a position in favor of negative real interest rates i.e. in favor of borrowers and against lenders.The problem is that deflation ruins their evil designs, when interest falls below zero. They then have to resort to fiscal measures ( because they've run oyt of monetary options) , which effectively will cause inflation to soar, see Zimbabwe.
This is where the helicopter comes into play.
#5
Either way, it is a lot of debt that right now we can't afford to pay back. So the government will raise taxes, which will cause more job loss, which will cause more loss of tax receipts, which will mean the government will want to raise taxes more, etc., etc.
#6
The other long term effect will be that now large corporations know the govt will come running to their rescue if they get into trouble.
Why not make highly leveraged bets on the riskiest but most potentially profitable options available?
You'd be a fool not to now.
#9
The major problem is that so many eggs were placed into one basket ... US mortgage loans. Those loans were re-packaged into other securities (derivatives) and re-sold around the world. When US housing values fell, the the mortgages and the derived securities became worthless.
This wiped out the pool of assets that they were lending against for both consumer and business loans. Things are not going to get better until the mortgages go back above water.
One way for banks to get those mortgages back above water and stop the depreciation in housing is to take houses the banks currently own and raze them. Scrape the lot and sell it as a building lot instead of a house. If the house on the lot is over 10 years old, scrape it.
The oil producers' cartel Opec has agreed to make a record cut in output, slashing 2.2 million barrels per day (bpd) from its current supply.
Opec has made two other cuts since September, meaning it has cut a total of 4.2 million bpd in four months. Despite the record cut, oil prices continued to fall as US data provided fresh evidence of falling demand. US light, sweet crude for January fell as low as $39.94 a barrel, its first time been below $40 since July 2004.
The falls were blamed on US inventories figures, which showed that demand for petrol in the four weeks to 12 December was down 2.7% from the same period last year. The price later recovered slightly to trade on the New York Mercantile Exchange at $40.31, which was down $3.29 from Tuesday's close.
Demand risks
Opec said that it hoped the record cut would boost prices but that it had no formal price target. The Soddies think $75/barrel would be "fair," the Medes and the Persians would prefer $80.
The cut means that the target for production for the 12 member states is now 24.845 million bpd. The cut is effective from 1 January, but the big question with Opec production cuts is always whether the member states will actually make the cuts they have agreed to. "Given the still-substantial risks to demand and ongoing scepticism on Opec compliance, it could take some time before prices recover materially above $50 to $55 per barrel," said Gordon Gray from Collins Stewart.
Posted by: Fred ||
12/18/2008 00:00 ||
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#1
I think everyone is going to expect someone else to actually do the production cutting. I don't expect Iran, Venezuela, or Russia to actually cut production. And long term they are going to be in a world of hurt with new production in Brazil going to come on line in 5 years or so, and Brazil isn't an OPEC member.
Iran, Venezuela, and Russia can't afford to take a revenue hit right now.
Hoping to avoid bankruptcy, ailing US carmaker Chrysler LLC on Friday will shut down all of its manufacturing plants for at least one month because of plummeting car sales, the company announced Wednesday.
Chrysler's announcement comes after US lawmakers last week failed to agree on a 14-billion-dollar emergency loan for the US car industry. Chrysler and General Motors Corp have said they do not expect to survive without federal aid.
Chrysler said its dealers are already overstocked as car sales over the past months have plunged about 35 per cent to 25-year lows in the United States. Buyers have struggled to get car loans amid a massive financial crisis that has kept banks from lending to each other and to consumers.
Chrysler said the failure by consumers to get loans has had a 'dramatic impact' on the industry, costing them about 20-25 per cent in monthly sales.
The plant closures, 30 in total, will 'keep production and dealer inventory aligned with US market demand,' the company said in a statement.
Posted by: Fred ||
12/18/2008 00:00 ||
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Uh, don't the Big Three normally close for about 3 weeks this time of year for model changeover?
Oil prices tumbled below $40 for the first time since the summer of 2004 Wednesday despite an announcement from OPEC of a record production cut of 2.2 million barrels a day. Markets had already priced in a vastly reduced flow of oil and traders focused instead on troubling economic data that points to a long and severe recession.
Light, sweet crude for January delivery tumbled 8 percent, or $3.54, to settle at $40.06 on the New York Mercantile Exchange. Benchmark crude prices fell as low as $39.88, a price last seen in July 2004. "There's just so much oil in inventory out there right now," said Michael Lynch, president of Strategic Energy & Economic Research. "Nobody wants to buy this stuff."
Crude prices have fallen so low, producers have leased supertankers to store the oil at sea, hoping that oil will rebound. U.S. gasoline inventories continued to rise, the government reported, providing further evidence of a major pullback by American motorists.
Demand for gasoline over the four weeks ended Dec. 12 was 2.7 percent lower than a year earlier. OPEC had already announced cuts totaling 2 million barrels earlier this year, also with little effect. The unprecedented production cuts and the market reaction show just how fast energy demand has fallen during the worst economic downturn in at least a generation. "You've got a commodity that people are buying less of because they can't afford to buy more," said Phil Flynn, an analyst at Alaron Trading Corp. "People are fearful. They have a lack of confidence in the economy. They're closing their factories."
Grim economic news radiates out of the U.S., Europe and Asia almost daily as consumers and industries pull back on spending. The Cooper Tire and Rubber Co. said Wednesday it will cut 1,300 jobs and close a plant in Georgia. Newell Rubbermaid Inc. is reducing its salaried work force by as much as 10 percent. The Atlanta-based company slashed its fourth-quarter and full-year profit guidance Wednesday. In Detroit, General Motors Corp. put the brakes on construction of an engine factory trying to hold on to the cash that it has left.
Meanwhile, the dollar suffered its biggest one-day decline against the euro after the Federal Reserve cut a key lending rate target to historic lows. That would typically lead more investors into the crude market because oil is bought and sold in dollars and you can get more bang for the buck. But investors in this harsh economic climate are holding onto their wallets like never before, betting there's not enough global demand to support higher crude prices, said Gene McGillian, an analyst at Tradition Energy. "Oil prices should be a lot stronger," McGillian said.
The last time oil prices dipped below $40 a barrel was July 21, 2004. Prices settled that day at $40.09, according to Peter Beutel, an oil analyst at Cameron Hanover.
Posted by: Fred ||
12/18/2008 00:00 ||
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Don't "fuel" yourself. Enjoy it while it lasts because it won't last long.
Posted by: European Conservative ||
12/18/2008 14:50 Comments ||
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#7
European Conservative, I agree. We could face a disruption of supplies at any time in the near future. Or so it seems to Mr. Lotp and me. We just took delivery of enough heating oil to bring our tank up to full a couple months earlier than we strictly needed to because of that risk.
Posted by: ed ||
12/18/2008 22:53 Comments ||
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#19
One reason I would like to see a Commercial Oil Reserve is to vastly dampen the out of control speculation like we saw the past year and a half. That cost the US economy at least an extra $500 billion and drove us into recession.
That we can make a profit doing it is just icing on the cake.
Posted by: ed ||
12/18/2008 23:02 Comments ||
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A multi-volume chronology and reference guide set detailing three years of the Mexican Drug War between 2010 and 2012.
Rantburg.com and borderlandbeat.com correspondent and author Chris Covert presents his first non-fiction work detailing
the drug and gang related violence in Mexico.
Chris gives us Mexican press dispatches of drug and gang war violence
over three years, presented in a multi volume set intended to chronicle the death, violence and mayhem which has
dominated Mexico for six years.
Rantburg was assembled from recycled algorithms in the United States of America. No
trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
Venezuela President Hugo Chavez said on Wednesday a "fair" price of a barrel of oil would be between $70 and $90 per barrel, as OPEC ministers met to slash global oil supply. 
NEW YORK (CNNMoney.com) -- Cash-strapped consumers got some welcome news on Thursday when regulators voted to rein in controversial credit card practices. But they'll have to wait another year and a half to get relief - the new rules won't take effect until July 1, 2010.
The oil producers' cartel Opec has agreed to make a record cut in output, slashing 2.2 million barrels per day (bpd) from its current supply. 
Oil prices tumbled below $40 for the first time since the summer of 2004 Wednesday despite an announcement from OPEC of a record production cut of 2.2 million barrels a day. Markets had already priced in a vastly reduced flow of oil and traders focused instead on troubling economic data that points to a long and severe recession. 
