We've Really Done it This Time

The idea being propagated in some quarters of the mainstream media to nuke the leak in The Gulf of Mexico, if comments at The Oil Drum can be taken as authoritative, is tinged with the stuff of fantasy if not downright madness. In the meantime, this catastrophe is fast surpassing all other man made disasters in anyone's memory. Early on, I mused that this event might ultimately bring down The Obama Administration. Well, forget them, this event might set the ball rolling to bring down our entire civilization and more. Broadly speaking, man and animal kind, and the ecosystems that are essential to our collective well being, not to mention the planet's, will likely be suffering mightily from the effects of this horror for a very long time.

The Very Definition of a Nightmare

Matt Simmons is an investment banker and analyst who works in the oil industry and authored Twilight in The Desert, a book about the onset of Peak Oil. If he can be believed, and I have no idea if he can, the oil leak we are all focused on is likely a diversion from a far bigger leak some miles away. Pardon the wordplay, but we need to get to the bottom of this now.

Muddying The Waters

The latest desperate attempt to cap the underwater petroleum volcano is upon us. The would be remedy has the none too comforting name of Top Kill, (seen above) which, apparently, involves dropping massive amounts of heavy mud onto and into the fissure(s) leaking oil and gas. The success or failure of this latest gambit by BP will begin to reveal itself sometime today. Pray that it works, if you are the praying kind, and, in the meantime, prepare for a figurative muddying of the waters by BP should this attempted solution not yield the desired results.

Thimble Full of Sand.

As the report makes clear, our oil and gas industry regulators are bought and paid for. In truth, your entire government is bought and paid for. Every major regulatory agency is little more than a revolving door between government and the industry the government agency is meant to police. Your biggest problem, my fellow Americans, are yourselves and your government. Islamic jihadists, malfunctioning foreign governments, bankrupt foreign financial entities and various and sundry other bogeyman trotted out to paralyze us into a state of panic and fear such that we hew unerringly to the latest nostrum put forward by The Powers That Be are the least of our concerns.

Our government, a sort of kinder gentler mechanism that most closely resembles, in its functioning, Mussolini's Fascist business model, is vastly more at issue than anything our government is likely to place in front of us as something we are meant to unquestioningly seek protection from.

The question is what are we going to do about this appalling state of affairs? If, perhaps, you are unsure, let me offer a suggestion. Start by refusing to vote for anyone who runs on either of the two major party tickets, or any sub-party, such as the Tea Baggers, who are presently being played like a fiddle by The Republican Party. Refusing to give succor to the two political franchise operations is the bare minimum required. Think of it as a necessary but not sufficient prerequiste for Real Change.

California, Illinois, New York, etc. Take Note.

The contours of the disaster in The Gulf of Mexico are expanding almost as fast, if not faster, than the vast British Petroleum generated oil slick itself. I expect that Louisiana's mildly defiant maneuver, which I view as appropriate and justifiable, to become the norm going forward as more and more states begin to recognize that when it comes to emergencies, and matters of life and death, The Feds are either purveyors of benign neglect, looking out for someone else's interests first, i.e. corporate ones, or worse, simply intransigent and adversarial.

Well, well, well.

With respect to my most recent ruminations on the possible effect on the Obama Administration from the ongoing catastrophe in The Gulf of Mexico, it seems that strenuous legal efforts were made, and are being made, to halt off shore drilling. Prior efforts were turned back by none other than Attorney General Ken Salazar who specifically invoked BP's drilling plans in The Gulf of Mexico.

I Want to Believe Them.

But I absolutely don't. The latest fairy tale, excuse me, official claim, made by mega oil industry miscreant BP seems like just so much petroleum patch propaganda. Pardon me for allowing this story to monopolize the blog of late, but unfortunately, I am finding it substantially more compelling than any other burning (pun intended) issue.

At this point, I am seriously beginning to wonder if President Obama, despite tough talk, not imposing governmental control over this growing catastrophe will wind up bringing down his administration. After all, how much longer does this have to go on before one can plausibly declare it a threat to national security? I seem to recall that after Hurricane Katrina the infamous Blackwater soldier of fortune agency was brought in to brutally quell any real or potential mayhem in New Orleans. This time around we have literal black water. The Universe works in mysterious and yet implacably poetic ways, doesn't it?

But back to the far fetched notion that this ongoing event might cascade into a political disaster for the Obama Administration. It certainly wouldn't be what anyone could plausibly forecast as a proximate cause for Obama's political collapse, so, by virtue of some off beat contrary logic, I'll immediately place the odds on this potentially burgeoning- let's call it The (underwater) Teapot Domebama- debacle, at 10 to 1 that it topples, by hook or by crook, (pun sort of intended) the sitting President. It it does, it wouldn't, by any means, make this horrific event worthwhile, but it would fulfill the dictum that every black cloud has a silver lining.

Infinite Supply

The reporting of the catastrophic well blowup in The Gulf of Mexico continues to dumbfound the Fourth Estate, though there are signs that they may be getting a clue. Why just the other day on PBS, I listened to someone presented as an authority on the subject downplay the present disaster as one on a par with the infamously legendary Exxon Valdez episode, but not quite as bad as the more recent Atlantic Empress oil spill that occurred near Trinidad.

I'm afraid to say that comparing The Exxon Valdez and Atlantic Empress incidents to The Gulf of Mexico well blowup is a bit like comparing lamb chops to bananas. Yes, they are, indeed, both food, but after that most comparisons between the aforesaid tanker spills and The Gulf disaster are either not worth making or simply don't exist. After all, The Exxon Valdez and Atlantic Empress spills, were just that, spills of some finite amount of crude. There is nothing finite about what is gushing from the bottom of The Gulf of Mexico.

Even the nature of the error, the circumstances of its occurrence, are considerably more complex than what transpired with The Exxon Valdez spill. We were able to determine fairly quickly exactly who was responsible for that one, but this mess doesn't even have a readily available name with which to attach itself because there are too many parties-the entire culture if one chooses to veer into the quasi-metaphysical- with red stained oil on their hands. As a result, this almost indescribable human &^%$ up is literally one which bears no name, and one whose widespread damage can not yet even begin to be calculated. Scared and/or disturbed yet? I know I am, because at every level our society operates, we are demonstrating that we either refuse (or lack the capacity) to adequately take the measure of this horrific event.

Candles Burn Brightest Just Before Extinguishing.

The Eurozone, with critical U.S. assistance, has decided to go all in and pull a U.S. banking cabal response to a justifiable attack by market participants on the EU's flagging monetary system. Everyone, at least for the moment, is jumping wildly back into the pool, but all that has changed is that more funds (that no one actually has except by creating more debt) have been thrown at a system that is untenable due to an excess of unserviceable debt.

I am now almost as certain as I am of my own name that attempts to prop up the western financial system will end reasonably soon, and result in an entirely new paradigm. Unfortunately, the pain that will ensue on the way to the new paradigm will be unlike anything modern civilization has ever experienced. That includes the last Great Depression. In the meantime, President Obama, who has somehow managed to at least equal his predecessor in awfulness, has nominated a Goldman Sachs stooge to the Supreme Court.

Don't Be Played For a Fool.

Today the beating wings of a gaggle of black swans were heard directly overhead. Their copious, air cooled, liquid excrement was felt very shortly thereafter. Do not be taken in by reports that someone's errant fat finger was what caused the stock market to crater as badly as it did. That is absolute horse *&%! It's far more likely that Goldman Sachs pushed Ms. Market right over the edge so that The Vampire Squid could make a killing, thereby allowing them to more easily pay the SEC a fine for the sort of nefarious scam they committed today. Alternatively, today's roller coaster/ house of horrors ride was, ala the "No banker left behind" bailout, just another sickening example of financial extortion. "Leave us alone to rape and pillage or else!"

I am only half joking. After all, who do you think these bastards are?

Now, I am about to divulge something of a personal nature to you, which is that the little guy, that would be me, was screwed out of some substantial profits today. Suffice it to say that the bid and ask in the option pits were very out of whack in ways they should not have been. But, as The Vampire Squid and their ilk probably stood to lose enormous sums of money if my (and other's) correct bets were honored, they simply chose not to. Word has it that the SEC is looking into today's most "unusual trading." I'm sure their search will last half as long as the proverbial New York minute, and be as fruitful as trying to introduce rice paddies in the Mojave desert. Such is life in the charnel house U.S. capital markets, an arena more depraved than a Bangkok whorehouse, and more in need of being condemned than a cockroach ridden, termite compromised, crack house.

In the meantime, please do your level best to not be taken in by the likes of one Barron Segar, who gushed that today's selloff was the "ultimate buying opportunity" He and his ilk have no clue. Today was the beginning of the end, and therefore, constituted something far closer to the ultimate selling opportunity. Expect more wild gyrations with a decidedly downward tilt as our entire financial system goes supernovae.

One big, fat indication that today was indeed a watershed event was the action in precious metals. Almost without exception, precious metals, and here I mean spot gold and silver, get taken down hard when shares encounter major selling episodes. Silver is especially prone to experiencing nasty body slams as it is viewed, unlike gold, as an industrial metal rather than a monetary store of value. Well, today's behavior in physical was anything but true to form.

A word to the wise: The race to the bottom amongst the world's fiat currencies will see every fiat lose value, and lots of it, against precious metals. Those of you with a Keyneisan "Gold is a barbarous relic" bent, may not like it, but that, in my humble opinion, is what's in store. As Voltaire, or was it Thomas Jefferson, observed, all abstract paper claims to wealth, aka fiat, ultimately revert to their intrinsic value. The speed with which that ineluctable process proceeds is accelerating.

As the Boy Scouts are wont to say, Be Prepared.

Black(ened) Swan

As per last week's post, when I speculated that something would soon emerge-probably not on my short list- to act as the next black swan, or flock of black swans, overturning the U.S. economy's apple cart, a terrible oil spill may well be the event that, no pun intended, turns the tide. My sources (try not to laugh too hard) inform me that this ecological disaster, which is already enormously damaging to all manner of marine wildlife, will make the Exxon Valdez spill appear like a lazy stroll in the park by comparison. The entire Gulf of Mexico is now in grave danger of becoming a dead zone, ecologically and economically, and if one would be amateur analyst is correct, the path of the Gulf Stream could cause the destruction to spread as far as the northeast coast fishing grounds.

Once again we are faced with a grim reminder that the cost of doing business as usual, specifically as regards how, and on what basis, we provide energy for ourselves, is untenable. Tragically, and not just for our species, we are destined for this sort of catastrophe, because we simply will not meaningfully reform our mode of existence. Instead, we give audience to imbeciles whose signature incantation, at least where our energy problems are concerned, is "Drill, baby, drill." Well, this is what one reaps when one drills like an entitled baby.

In the meantime we'll have to contend with attempts to soft peddle what looks like a kind of ghastly companion piece, albeit an infinitely worse one, to the Hurricane Katrina debacle of 2005. The sandy white beaches of the west coast of Florida, among other beautiful places, will be stained black this summer, and many other things-things that are even more precious, precarious, and beautiful than sandy white beaches- will be hopelessly sundered so much so that Memorial Day cookouts that are notably devoid of Gulf shrimp will be the least of our problems.