Life After the Oil Crash

Deal With Reality or Reality Will Deal With You
with the business for 15 years. But during various state budget crises, the waiting period was reduced to seven years, and then five, and then three. Legislators even tried for one year. Why? Because the state wanted to use that free money."That's absolutely correct," said California State Controller John Chiang, who inherited the situation when he came into office. "What we've done here over the last two decades has been dead wrong."

HomeGuide.com: What Will Happen to Your Money if Your Bank Fails?

A lot of banks went overboard during the boom and lent money to people
who shouldn't have been able to get a loan. The bad debt has since caught
up, leaving many banks struggling to keep their doors open. Washington
Mutual, National City and Wachovia are just a few of the big banks looking
for huge cash infusions to keep their businesses up and running. Lenders of
this size will most likely be able to get the financial backing they need to
keep their banks open. However, smaller banks may not be as lucky.

CNN Money: Get Ready for More Bank Failures

"We are going to see a fair number of bank failures," said Chip MacDonald,
partner in the capital markets group Jones Day, a law firm headquartered
in Cleveland. "We are in the early innings. For the public banks that have
reported earnings for the first quarter, it has not been a pretty picture."
According to the most recent figures from the FDIC, 76 banks were on
the FDIC's "problem list" as of the end of December. MacDonald said it
would not surprise him if the number is now up to 100 to 125 institutions.

Charles Hugh Smith: The Worst of the Housing Bust is Yet to Come

The entire edifice of home ownership rests on debt - buyers being able
to borrow large amounts of money for a reasonable rate of interest. The
entire housing bubble was essentially a debt bubble, driven by lending
standards which sank to near-zero, non-U.S. buyers snapping up trillions in
mortgage-backed securities and derivatives, and lax lending regulations
enabling banks to lower their reserves to 1% and spin the mortgages off
their balance sheets. This has all reversed.

Los Angeles Times: 1,000 Foreclosures Per Day in California

California's foreclosure crisis passed another ominous milestone in April,
when more than 1,000 foreclosed homes were  auctioned off every
weekday at courthouses across the state, the auction tracking firm
ForeclosureRadar reported today. The April total of foreclosure sales at
auction -- 22,838 for the state -- represents a jump of 44% over March
totals and the highest level ever in California, ForeclosureRadar reports.

Reuters: German President Says Banks Turned Markets Into "Monster"

Banks taking on risky investments without adequate risk provision have
turned the world's financial markets into a "monster that must be tamed,"
German President Horst Koehler said in an interview . . . "Capitalism is not
just about pulling in profits but above all about being able to handle risk and
the financial markets crisis shows that too many players in banking houses
did not understand precisely that," he told German weekly magazine Stern.

NY Post: Consumer Credit Crisis Showing Up in the Credit Cards

The money drain from high food and gas prices is causing consumers to fall
behind on home-equity loans at Bank of America - at an even faster rate
than the bank forecast only three weeks ago. The grim report from the
nation's second biggest bank underscored new problems ahead from the
widespread debt that consumers piled up by borrowing against inflated
home values to finance spending sprees over the past three years. Bank of
of America said more of its once-credit-worthy customers are struggling
just to fill gas tanks and food pantries . . .

Wall Street Journal: Bank Losses on Small Business Loans Surging

The turbulent economy is exposing yet another type of credit where
bankers let their guard down: small-business loans. Missed payments and
losses on small-business loans are surging at banks throughout the country
that were so eager to pad their profits that they essentially threw typical
underwriting methods out the window. Some lenders doled out small-
business loans as if they were credit cards, relying solely on the personal
credit scores of borrowers. That meant many loans were made without
assessing a company's strategy or finances, even by banks that avoided
subprime mortgages. Now the economic slowdown is leaving lenders with
little or nothing to collect on many small-business loans in case of default.

Associated Press: Fewer Fliers for summer, Packed Planes Persist

Fewer Americans are expected to fly this summer, but don't expect more
empty seats as carriers park planes to help offset surging fuel costs. The
trade group for the nation's largest airlines on Tuesday forecast 211.5
million passengers will travel on domestic carriers between June 1 and Aug.
31. That would be a 1.3% drop from last summer. Airlines are reducing
their carrying capacity amid slower economic growth and rising jet fuel
prices, the Air Transport Association said.

USA Today: FBI Warns of Escalating Mortgage Fraud

Last month, the Treasury Department put the mortgage-fraud damage for
calendar year 2007 at nearly 53,000, a 42% jump. The FBI said that
mortgage fraud losses in fiscal 2007 totaled more than $813 million, though
only 7% of "suspicious activity" reports detailed the loss in dollars. That
number "is just the tip of the iceberg, reflecting only a small percentage of
financial damage suffered by victims of mortgage fraud," Kenneth Kaiser,
the FBI's assistant director in charge of the bureau's criminal investigations

Business Week: Peer-to-Peer Lending a New Trend in Student Loans

Because of the credit crunch, conventional lenders are making it tough for
any but the most creditworthy borrowers to qualify for private college
loans. Now, a new breed of student lender is trying to get students to
return the snub -- by writing off the Sallie Maes and Citibanks of the world
in favor of relying on friends, family, and even perfect strangers to finance
their college loans. "It's not a solution to the credit crisis in student loans
by any means," says Mark Kantrowitz, publisher of the site finaid.org. "But
the idea of using peer networks to raise money is intriguing."

___________________________________________________________________


Organic storable foods available from LATOC affiliate Wilderness-Dining

___________________________________________________________________


Food, Soil, Agriculture:

Australia's Largest Bank Now Stockpiling Supplies, Possibly Including Food

Editor's Note: at the LATOC Forum, member Cornelian - a longtime and very reliable member of the forum who lives in Australia - said this story was on the radio and the representative had specifically said they were stockpiling food. According to this article (which she also found at my request for published confirmation of the story) they are stockpiling "supplies". I can't help but to suspect that "supplies" includes food as well as the medical supplies mentioned. Emphasis added:

A Canberra conference on infectious disease in the workplace has been
told the cost of providing flu shots for staff is cheap compared to the costs
of a flu outbreak. The Commonwealth Bank will this week complete its
voluntary immunisation program for 28,000 staff. The bank's chief
medical adviser, Dr. Colin Johnston, says the corporation is also
stockpiling drugs and supplies in case of a worldwide flu pandemic.

Here is the report at the LATOC forum that led me to the above article. To be perfectly clear: I have no confirming evidence they are indeed stockpiling "food". Only the above article that says they are stockpiling "drugs and supplies". At the the same time, I have no reason to doubt the veracity of Cornelian's account of the radio broadcast that the spokesman indeed said "food".

I was listening to ABC News Radio last night when they had a report on the
availability of flu vaccine in Australia. From this they went onto a report
about the Commonwealth Bank of Australia (Australia's largest and probably
oldest bank) who are offering every last one of their employees, tens of
thousands of them, flu vaccines. OK, nothing so far to make me really
listen. The bank just wants its employees to turn up for work and is
removing the flu excuse as best it can. Then the CBA spokesman goes on
to say, "We're also stockpiling food. We believe a pandemic of avian flu is
absolutely inevitable and we are preparing." Source

Medical Journal of Australia: Both Citizens and Authorities Should Begin Stockpiling Food in Preparation for a Catastrophe

Food supplies in the home will need to last as long as it takes for vaccine
development and production. For ordinary seasonal influenza vaccines,
there is a lag of 6 months or more after a new virus strain has first been
discovered until a new vaccine is available for distribution. For weather
-related catastrophes, food stockpiles might be required for much longer. A
destabilised global climate, where small changes in atmospheric and ocean
circulations have major consequences for temperature, rainfall, wind and
storm patterns, may precipitate food stockpile dependence for several
years. While long-term food stockpiling could be considered a governmental
responsibility, we suggest that home stockpiling of food to last about 3
months might be done by individual households. This would allow a window
of time for to put emergency action plans food deliveries in place.

Counterpunch: Inside Farmer Ernie's Chamber of Horrors

The Boy Scouts of America Greater Yosemite Council commended his
leadership in transforming "a small family farm model to the current
computer driven egg-producing company." The Stanislaus County Board of
Supervisors inducted him into the Agriculture Hall of Fame. But according
to an undercover video aired on TV stations this week including CNN the
avuncular, civic-minded Ernie Gemperle operates a chamber of horrors for
the two million chickens caged on his Turlock, CA-based Gemperle
Enterprises farms. The video, which includes workers gassing and stomping
sick hens and carcasses pulled from live hen cages, was shot over a two
month period earlier this year at Gemperle Enterprises egg farms in Delhi
and Hilmar, CA by an unidentified, undercover investigator.

NY Times: Indians Find U.S. at Fault in Food Cost

Instead of blaming India and other developing nations for the rise in food
prices, Americans should rethink their energy policy — and go on a diet.
That has been the response, basically, of a growing number of politicians,
economists and academics in this country, who are angry at statements
by top U.S. officials that India's prosperity is to blame for food inflation.

Bloomberg: Thai Rice Breaches $1,000 a Ton for the First Time

The benchmark price for rice exported from Thailand, the world's biggest
supplier, breached $1,000 a metric ton for the first time today as
importers rushed to secure supplies, heightening concern about a global
food crisis. The price of 100% grade B white rice, which is set weekly,
gained 8.4% . . . The price has more than tripled over the past year.

___________________________________________________________________


Some Food Reserve Units Still Available from LATOC Affiliate Nitro-Pak

___________________________________________________________________


Oil, Energy, Water, Metals:

Richard Heinberg: Governments Can't Stop Oil Prices from Rising

I don't think there's anything that the Australian Government can do or the
US Government can do about rising oil and food prices and by the way,
these two things are connected. The rising oil prices create increased
costs for farmers. Also the cost of shipping, food and just about everything
else is increasing, so these high prices are going to have knock on effects
through the economy. The airline industry is going to be hard hit and again,
there's very little that governments can do other than to start planning for
high prices. We should be redesigning our economies to operate with less.

Counterpunch: Bush's Oil Wars Have Raise the Price of Energy

Despite all the recent talk of soaring prices at the pump, political and
economic pundits rarely mention the impact of war and political instability
in the Middle East on the skyrocketing price of oil. There is strong evidence
that the heightened price of energy is a direct consequence of the
destabilizing wars and geopolitical insecurity in the region. These include
not only the raging wars in Iraq and Afghanistan, but also the threat of a
looming war against Iran. Anytime there is a renewed U.S. military threat
against Iran, fuel prices move up several notches.

Financial Times: Oil at $200, There is No Turning Back

Oil at $US200 a barrel: that was the warning from Goldman Sachs,
published last week. The real price is already at an all-time high. At $US200
it would be twice as high as it was in any previous spike. Even so, it would
be a mistake to focus in shock only on the short-term jump in prices. The
bigger issues are longer term. Here are three facts about oil: it is a finite
resource; it drives the global transport system; and if emerging economies
consumed oil as Europeans do, world consumption would jump by 150%.
What is happening today is an early warning of this stark reality.

Video: Glenn Beck Interview with James Howard Kunstler

Editor's Note: the interview is being discussed at the LATOC Forum. FWIW, Beck's staff reads LATOC and has used it on their radio show. In this interview he says he's reading Kunstler's new book and thinks it's excellent.

NY Times: Congress Votes to Stop Stockpiling Oil

Despite initial resistance from the White House, the Senate voted 97 to 1
to stop putting 70,000 barrels of oil a day in the Strategic Petroleum
Reserve through the remainder of this year; the House later approved a
similar bill by a vote of 385 to 25. The rapid action demonstrated
lawmakers’ anxiety about election-year howls from constituents who are
straining the family budget at the gas pump.

CS Monitor: Get Ready to Spend $6,000 a Year on Gasoline

Even with US airlines cutting flights and SUV sales now tanking, the effects
of expensive oil on the American family could be stark, Wescott's report
says. In 2003, with oil approaching $40 per barrel, the average US family
spent about $1,900 (4.8% of its income) on natural gas, heating oil, and
gasoline. But today at the $120 per barrel level, a family will spend about
$6,000 a year or about 15% of total annual income . . .

Paul Krugman in the NY Times: Stranded in Suburbia

This is really our big problem: we’ve made long-lasting investments — in
infrastructure, in housing, and to some extent in our auto fleet — based on
low oil prices. Those past decisions are what make today’s high prices such
a big problem. In the long run we can adjust, but in the long run . . .

Forbes: The Water-Industrial Complex

In 2001, a water shortage in America's Pacific Northwest wiped out nearly
a third of the U.S. aluminum industry. Low precipitation levels in the
Cascade Mountains during the preceding winter robbed local reservoirs of
the water needed to turn the massive turbines inside the region's main
hydroelectric power plant, the Bonneville Power Administration. Electricity
prices skyrocketed. Over the course of a few months, roughly a dozen
aluminum plants closed. Nearly a decade later, only one has reopened. Like
oil, water is an essential part of doing business in almost every industry,
and unexpected shortages can trigger catastrophic consequences.

Associated Press: Military Cracks Down on Scrap-Metal Scavengers

Hundreds of Marines were conducting a combat training mission in the
Mojave Desert when an air patrol spotted something kicking up dust: A
civilian pickup truck speeding across the barren landscape. Behind the
wheel was a suspected scrap metal thief who had been combing the Marine
Corps Air Ground Combat Center for spent brass shell casings. Bombing
ranges have become prime hunting grounds for so-called "scrappers," who
are motivated by soaring commodity prices to take greater risks in their
quest for brass, copper and aluminum. The scavenging causes headaches
for the military, which cannot patrol every inch of the remote bases where
spent ammunition, shrapnel and unexploded ordnance are easy to find.

NY Times:  In U.S., Metal Theft Plagues Troubled Neighborhoods

Metal scrappers have attacked churches and ransacked homes in this
Midwestern city, leaving entire neighborhoods uninhabitable. Saint
Theodosius Orthodox Cathedral here lost its insurance after a thief stole
copper panels from the roof years ago. Three churches in Cleveland
Heights have been stripped of copper gutters. And in the last few months,
three churches in the North Collinwood neighborhood were stripped of
copper downspouts. Houses, however, are the greatest targets of
commodity scavengers in the United States. Neighborhoods depopulated
by the rising tide of foreclosures make easy targets.

USA Today: Steel Once Again a Hot Commodity

Steel's recovery is certainly another example of how global demand for
commodities is breathing new life into raw materials ranging from potash
to wheat and corn. Steel is just one of the latest metals to get swept up in
the worldwide metals boom, says David Behr of Metalprices.com.

___________________________________________________________________


Crimes, Conspiracies, and High-Weirdness:

Washington Post: The Mob is Big in Japan, Owns Banks in California

The cops fighting organized crime are hard-drinking iconoclasts — many
look like their mobster foes, with their black suits and slicked-back hair.
They’re outsiders in Japanese society, and perhaps because I was an
outsider too, we got along well. The yakuza’s tribal features are also
compelling, like those of an alien life form: the full-body tattoos, missing
digits and pseudo-family structure. I became so fascinated that, like
someone staring at a wild animal, I got too close and now am worried for
my life. But more on that later. The Japanese National Police Agency (NPA)
estimates that the yakuza have almost 80,000 members. The most
powerful faction, the Yamaguchi-gumi, is known as "the Wal-Mart of the
yakuza" and reportedly has close to 40,000 members. In Tokyo alone, the
police have identified more than 800 yakuza front companies: investment
and auditing firms, construction companies and pastry shops. They even
set up their own bank in California, according to underworld sources.

Washington Post: Detainees Drugged with Psychotropics For Deportation

The U.S. government has injected hundreds of foreigners it has deported
with dangerous psychotropic drugs against their will to keep them sedated
during the trip back to their home country, according to medical records,
internal documents and interviews with people who have been drugged.
The government’s forced use of antipsychotic drugs, in people who have no
history of mental illness, includes dozens of cases in which the "pre-flight
cocktail," as a document calls it, had such a potent effect that guards
needed a wheelchair to move the slumped deportee onto an airplane.

Des Moines Register: Largest Federal Raid Ever

Detainees who are charged with aggravated identity theft, unlawful use of
a Social Security number or other offenses will be given lawyers and sent
to appearances in one of three makeshift courtrooms at the detainee
center in Waterloo, Arnold said. The set-up includes three courtrooms –
two in trailers and one in an existing room. A Video footage shot by federal
agents showed a large "intake area" in McElroy Auditorium with folding
chairs and tables. The footage , included images of a kitchen, break room,
restroom and shower facilities used by detainees.

NY Times: Blunt Federal Letters Tell Students They're Security Threats

A German graduate student in oceanography at M.I.T. applied to the
Transportation Security Administration for a new ID card allowing him to
work around ships and docks. What the student, Wilken-Jon von Appen,
received in return was a letter that not only turned him down but added an
ominous warning from John M. Busch, a security administration official: "I
have determined that you pose a security threat." Similar letters have
gone to 5,000 applicants across the country . . . The officials also said they
were sorry about the language, which they may change in the future, but
had no intention of withdrawing letters already sent.

NY Times: To Curb Truancy, Schools Begin Tracking Students Electronically

Educators are struggling to meet stricter state and federal mandates,
including those of the No Child Left Behind Act, on attendance and
graduation rates. The Dallas school system, which, like other large
districts, has found it difficult to manage the large numbers of truant
students, is among the first to experiment with the electronic monitoring.

UK Daily Mail: Town Halls Told to File Reports on "Political Troublemakers"

More than 10 million people are to have their everyday disputes, their
politics and their business lives checked by new "tension monitoring"
committees. The committees are to be set up to try to cut the risk of
riots or disturbances in the aftermath of terrorist outrages or outbreaks of
local racial trouble. They will file reports on named troublemakers whose
political activities are considered to be raising community tensions.

___________________________________________________________________


Preparation and Relocalization:

Alternet: How We Lost Knowledge of Where Food Comes

Has it ever occurred to you just how odd it is that we know so little about
what we eat? Each day we feast on cereal, bread, salad, soup, chicken,
cheese, apples, ice cream, and more. Over the course of our lives, each of
us has eaten thousands of different foods. We have tasted their saltiness
and sweetness, crunched their crispness, chewed their fleshiness,
swallowed them, and incorporated their nutriment into our bones. Yet
despite this biologically intimate and everyday physical connection, most of
us have little idea where our foods come from, who raised them, etc.

High Quality Storable Organic Bulk Foods Available from Brand New LATOC Affiliate Wilderness-Dining:


I recommend the following documentaries:





ccc







Learn to garden organically and to compost:





ccc