Goldman Sachs Again Tries to Prop Up Oil Prices

Goldman Sachs massive NYC headquarters.

Today Goldman Sachs announced that oil prices would rise to $149.00 a barrel before the end of the year. The price is hovering around $112.00. Why is Goldman trying to push oil prices higher? Does it have anything to do with the fact Goldman is an equity owner in the oil futures market, is the stock broker for the ICE futures market, manages institutional funds with substantial oil investments, participates in energy swaps to help manipulate the oil prices, and has consistently used its position and analysts to influence the oil market?

Ever since the purchase of the London Oil Futures Market by ICE, the public offering of ICE stock managed by Goldman and the huge increase in institutional investor involvement in the oil futures market Goldman has been projecting major increases in oil prices. Goldman research activity seems to be driven more on profit potential than objective oil market analysis.

The following excerpts from several stories on Goldman over the past 9 months shows the incredible leadership position Goldman took in pushing the rapid rise in the crude oil price. Now that the price has dropped about $35 Goldman today made another push to drive prices back up. Do you think there is any connection between the fact a number of financial analysts downgraded Goldman this week to a sell status rather than a buy status, thus undercutting its financial value?

One might think the actions by Goldman are so reckless, such blatant conflicts of interest, and clearly concerted efforts to manipulate the market without disclosing the company ownership position in the market that it seems Goldman's might be in serious financial trouble. Do not be surprised if sub prime mortgage losses combined with reckless credit risks and mismanagement of the oil investments doesn't result in the collapse of Goldman Sachs in the imminent future. If oil prices continue to go down the Goldman organization may very well go down with it.

Goldman's famous philosophy of being "long term greedy" may have finally caught up with them. Goldman's was formed in 1869, the same year that Black Friday took place when speculators tried to corner the US gold market and destroy the US economy. It was also the year Rasputin, the Russian mystic, Nadezhda Krupskaya, wife of Soviet founder Lenin, and Mahatma Gandi were born. A very strange year indeed.

Coltons Point Times
June 2, 2008

The CFTC, Commodity Futures Trading Commission, was set up in 1974 to protect Americans from manipulations in the commodity markets. It was last updated in 2000 even though in 2006 a Senate Permanent Subcommittee on Investigations said there was substantial evidence of price manipulation in the commodity oil futures markets and a gaping loophole in U.S. Regulations that would lead to further speculation and manipulation.

That was the same year the Administration allowed ICE, the new oil futures market owner in London to trade American oil futures in London. Oil prices were $59-60 per barrel then and since the gaping loophole in our regulation prices have more than doubled, meaning the price impact of speculation could be $60 per barrel today.

So Goldman Sachs represents ICE in securities offerings and was an original equity owner of ICE. The current Treasury Secretary was former head of Goldman Sachs. The current head of NYMEX, the New York Mercantile (Futures) Exchange whose contracts can be bought through ICE in London, is James Newsome who also sits on the Dubai Exchange, the third and last oil futures exchange in the world. Interestingly Newsome is a former chairman of the CTFC.

The current CTFC Global Markets Advisory Committee includes Newsome and Jeffrey Sprecher, Chairman and CEO of ICE, along with representatives of J.P. Morgan, Goldman Sachs, Lehman Brothers, Citigroup, UBS and Barclays among others. The CTFC Energy Market Advisory Committee includes Newsome and Sprecher from the futures exchanges along with Goldman Sachs, Shell Oil, Morgan Stanley, Merrill Lynch, Lehman Brothers, J.P. Morgan, and others.

So the two key advisory committees to the CTFC contain many of the very firms that are under investigation by the CTFC and the largest investment houses, banks and oil companies of the world are the target. The five CTFC lawyers could spend decades searching for truth.

Why did Congress and the Administration refuse to act to close the huge CTFC regulatory loophole two years ago when it was identified? Why were no changes made in CTFC regulations to enable it to effectively stop oil price manipulations since Bush took office? Why does the Treasury Secretary ignore what may be massive oil price manipulations by the financial sector speculators? How can the CTFC investigate the largest and richest corporations in the world with five lawyers?

If Congress or the Administration have any sense they will assign all the investigative resources of the federal government to the CTFC investigation including the FBI, SEC, FTC and any intelligence service monitoring the world oil situation. If ever there was a need for a national security investigation this is it as our economy and the world economy are at risk. This could be the last chance for Bush to actually do something for the good of the people before his Administration becomes a target of the investigation.

And don’t forget these same financial and oil companies have already given $1.6 billion to the campaigns of our U.S. Senate, House and presidential candidates in this election year and another $1.6 billion will be given before November. Let’s hope $3 billion cannot buy the influence of Congress. They have also paid over $20 billion in fines for fraud and stock manipulations in recent years so such behavior may not be anything new.

Reuters News Wire
December 12, 2007

According to Reuters the most active investment bank in the energy markets, Goldman Sachs, released a new forecast today that said U.S. oil prices will head higher in the coming year. The bank also expects the Organization of the Petroleum Exporting Companies (OPEC) to restrict crude oil production levels, even though global demand may rise. Goldman is forecasting U.S. crude oil to cost an average of $95 a barrel in 2008, up $10 from a previous projection. Analysts at the bank suggested that the price could even reach $105 by this time next year. The new price forecast for 2008 is 7% higher than the most bullish projection among 37 analysts recently polled by Reuters.


Bloomberg News
Published: May 16, 2008

New York: Crude oil futures rose above $127 a barrel Friday for the first time, leading other commodities higher, after Goldman Sachs raised its forecast on speculation that Chinese diesel purchases would strain supplies.

Goldman raised its price outlook for the second half of this year to $141 a barrel, from $107, citing supply constraints. China may increase fuel imports to generate power after a May 12 earthquake. Oil and other commodities, like gold and platinum, also surged on the falling dollar.

"We can blame Goldman again," said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA in New York. "In March 2005 they predicted that prices would rise dramatically, and they did. Prices jumped to the $125 level after another Goldman report less than two weeks ago. At this point nobody wants to bet against Goldman."

Crude oil for June delivery rose $3.13, or 2.5 percent, to $127.25 a barrel on the New York Mercantile Exchange. The contract surged to $127.82, the highest since trading began in 1983. Prices have doubled in the past year.


New York Times
By Louis Story
Published: May 21, 2008

Arjun N. Murti remembers the pain of the oil shocks of the 1970s. But he is bracing for something far worse now: He foresees a “super spike” — a price surge that will soon drive crude oil to $200 a barrel.

Arjun Murti at Goldman Sachs studied the 1970s’ oil spikes. One had drivers lined up at a gas station in San Jose, Calif., in 1974.

Mr. Murti, who has a bit of a green streak, is not bothered much by the prospect of even higher oil prices, figuring it might finally prompt America to become more energy efficient.

An analyst at Goldman Sachs, Mr. Murti has become the talk of the oil market by issuing one sensational forecast after another. A few years ago, rivals scoffed when he predicted oil would breach $100 a barrel. Few are laughing now. Oil shattered yet another record on Tuesday, touching $129.60 on the New York Mercantile Exchange. Gas at $4 a gallon is arriving just in time for those long summer drives.


Reuters News Service
June 9, 2008

Kuala Lumpur: Oil prices are likely to hit $150 a barrel this summer season, the global head of commodities research at Goldman Sachs said on 9 June, as tighter supplies outweigh weakening demand.

“I would suggest that the likelihood of that happening sooner has increased tremendously ... sometime in summer,” Jeffrey Currie told an oil and gas conference in the Malaysian capital, referring to oil at $150 a barrel.

Goldman Sachs, the most active investment bank in energy markets and one of the first to point to triple-digit oil more than two years ago — a once unthinkable level — said last month oil could shoot up to $200 within the next two years as part of a “super spike.”

Forecasts that oil could head towards $150 and above have multiplied over the past month as prices broke through several records, the latest being last Friday, when oil soared more than $11 a barrel on Friday, its biggest one-day gain ever.

Oil hit an all-time high of $139.12 on 6 June on the back of a weak US dollar and mounting tensions between Israel and Iran.

Goldman Sachs forecast almost a month ago that US crude would average $141 a barrel in the second half of 2008, up from a previous projection of $107, due to tight supplies.


Al Jazeera
UPDATED ON:Saturday, July 12, 2008
With oil prices having more than doubled over the last 12 months, various reasons are being cited for the price increases.

Adhip Chaudhuri, a visiting professor of economics at Georgetown University's campus in Doha, Qatar, explains the cause and effect of high oil prices.

Is the increase in oil prices plunging the global economy into stagflation?

The United States is, for all practical purposes, in a recession. The European Union's growth rates are being revised downwards below 2 per cent. The shine is coming off even China, India and Korea.
The recessions and the low growth rates represent stagnation and hence connote the 'stag' part of "stagflation", and high oil prices have a lot do with it.

Oil prices, together with simultaneous, huge increases in food prices, have increased worldwide inflation rates. Both China and India now have high inflation rates with China at almost 8 per cent and India at 11 per cent. The rising inflation is the "flation" part of "stagflation".

The worse thing about stagflation is that the central banks find themselves in a dilemma. If they lowered interest rates to spur growth, they would raise inflationary expectations. On the other hand, if they fought inflation by raising interest rates, the reduction in money supply will have contractionary effects on the GDPs of their countries.

For policymakers stagflation is a "lose - lose" situation.

Is the growth in world demand for oil the main reason?

Demand is one part of what the money market calls "fundamentals". The other is, of course, supply. In the opinion of the Bush administration, and the majority of the Wall Street establishment in the US, demand is the principal reason why oil prices are going up astronomically. However, this point of view does not correspond to facts.

Consider first the oft-mentioned demand from "China and India" which is frequently put forward as the principal reason why oil prices are going up.

According to official statistics published by the United States government, China consumed an additional 377,000 barrels of oil per day during 2007.

However, during the same time period Germany and Japan together decreased their consumption by 380,000, and hence, the net effect of China’s increased consumption is zero.

Even if China doubled its consumption in the first half of 2008, say to stockpile for the Olympics, the increment would be a drop in the bucket of total world consumption of 86 million barrels per day.
The same is true of India. It increased consumption by only 150,000 barrels per day during 2007, which is virtually indiscernible in the total world demand.

Notice also that the sum of additional consumption from "China and India" barely exceeds 500,000 barrels, an amount that Saudi Arabia has promised to increase production by.

Finally, the US has projected that the net increase in oil consumption during 2008 will increase by one million barrels per day, which is about 1.1 per cent. How can such a small increase in demand increase oil prices by 100 per cent between July 2007 and July 2008?

What is happening with the supply of oil?

The supply of crude oil has been remarkably stagnant over the last three years. According to official US statistics, the production of crude worldwide was 84.63 million barrels per day in 2005, and it was 84.55 million barrels per day in 2007. Thus, even small increases in demand over the last three years have put upward pressures on prices.

The near-term supply situation, according to the International Energy Agency, is not all that bad. Saudi Arabia will be adding to their capacity, deepwater Nigerian production will start in 2008, and Iraqi production will see an increase. If one added up the growth in all forms of energy, namely crude oil, natural gas, and biofuels, according to IEA there should be an increase in supply capacity of 1.5 million barrels during 2008.

Notice that amount of increase in supply is greater than the projected increase in demand for 2008 amounting to 1 million barrels per day. The supply projection for 2009 is even better. The supply capacity is expected to increase by 2.5 million barrels, which will outstrip the growth in demand comfortably.

It is the very short-term supply disruptions which seem to be more important for an increase in oil prices. Real disruptions may come from labour strikes in Venezuela, hurricanes in the Gulf of Mexico, and rebel attacks in Nigeria. Given that the demand and supply situation is so tight, even the slightest of bad news can increase the price of oil in the futures and spot markets noticeably.

Can the weak dollar be blamed for high oil prices?

Asserting that the "weak dollar" is a significant reason behind the rise in oil prices has become as ritualistic as asserting that "China and India" are the cause. And yet, the forces which determine the foreign exchange value of the dollar against the euro, the yen, or the pound are distinctively different from those that determine the price of oil.

There is, however, one logical argument which can sometimes provide a sufficient explanation as to why a depreciating dollar and increasing oil prices are inversely related - If the dollar weakens against the euro, the ability of the oil-exporting countries to buy European goods will decline because their oil exports are denominated in dollars.

The Europeans, at the same time, will be able to pay the higher dollar prices of oil because the euro has appreciated. Clearly, to keep their purchasing power over European goods constant, the oil-exporting countries need an increase in oil price approximately equal to the depreciation of the dollar.

However, for the first six months of 2008 the dollar has depreciated against the euro by only 7.5 per cent, while oil prices have gone up by about 50 per cent.

Surely, both Americans and Europeans are paying much higher prices for oil than can be explained by a "weak dollar".

Is speculation, then, a major factor?

The energy ministers of Saudi Arabia and Qatar asserted for the first time in public at the recent Jeddah meeting of major oil producing and consuming nations, that speculation in the oil futures markets was the most important reason why current oil prices are going up.

The United States Senate has been holding hearings in front of several committees since 2006 on the lack of regulation and oversight by the official Commodity Futures Trading Commission (CFTC) in the New York Mercantile Exchange (NYMEX) one of the two locations for oil futures.

In a recent testimony to the Senate, a hedge fund trader presented data to show that outstanding speculative positions in all commodities futures has reached $250 billion by March 2008, as compared to only $13 billion at the end of 2003.

As far as speculation specifically in oil futures is concerned, representative Bart Stupak (Democrat-Michigan), the head of the House Energy and Commerce Committee, announced recently that 71 per cent of all oil futures were owned by institutional investors.

The institutional investors, which consist of but is not confined to state
pension funds and university endowments from the United States, have been pouring funds into indexed commodity funds as part of a strategy of portfolio diversification.

The traditional assets, in which they would have otherwise invested in, namely stocks and bonds, have been yielding negative returns after inflation.

These investors can buy futures contracts with only a 5 per cent margin down payment. In addition the regulatory environment is very slack, filled with loopholes which bypass whatever few regulations that are on the books.

While there are dollar limits to positions that the institutional investors might take in the NYMEX, they are allowed to conduct "swaps" with the investment banks like Goldman Sachs and Morgan Stanley, and thereby manage to roll over their "buy" positions. This way they never have to take physical possession of the oil that they put in "buy" orders for.

If speculation is what is driving oil prices up, then it stands to reason that such high prices should lead to an excess supply of crude in the world. There are signs that such an excess supply is indeed building up, albeit slowly, much like the way the excess supply of housing emerged in the United States.

Fuel consumption has declined in the US sharply. We have already noted that oil consumption in Japan and Germany are actually decreasing.

Consumers in China and India have been insulated from the high world prices of oil until very recently with domestic subsidies. However, China has raised the prices of various petroleum products amounting to an average increase of 18 per cent, and so has India, by 13 per cent. The decrease in the demand for oil will start strengthening soon.

The biggest argument for speculation to be the single-most important cause for oil price increases in 2008 is: What else could have doubled the price of oil in one year?

The views expressed here are not necessarily those of Al Jazeera.


CNN Money
August 13, 2008

Financials sell off

"The financials [are] really what sold off," said Art Hogan, chief market strategist at Jefferies & Co. Merrill Lynch's (MER) downgrades of several investment banks put the sector under selling pressure, Hogan said.

Merrill Lynch analyst Guy Moszkowski downgraded on Wednesday Citigroup, Goldman Sachs Group (GS) and Lehman Brothers Holdings to underperform, according to media reports. Moszkowski also lowered Morgan Stanley's (MS) rating to neutral.


SAM NELSON
Reuters
August 20, 2008 at 11:51 AM EDT

Grains and soy also found support from firm crude oil markets following an optimistic forecast for crude oil prices from big index fund Goldman Sachs.

“The weather was supportive, plus Goldman reiterated their forecast for $149 dollar a barrel crude oil by the end of the year,” Mr. Sernatinger said.

The outlook from Goldman was well above Wednesday's price for New York crude oil futures prices of around $115 per barrel.


A Goldman Puff Piece

Goldman Sachs provides full service commodity risk management to commercial, sovereign and investor customers worldwide. Our commodities teams have extensive physical and financial experience in power, weather, natural gas, liquefied natural gas, natural gas liquids, crude oil and refined products as well as coal, emissions and precious and base metals. Our capabilities include:

Delivering the experience of over 220 professionals around the world, with offices in New York, Calgary, Houston, London, Sydney (via Goldman Sachs JBWere venture), Singapore and Tokyo.

Offering innovative risk management to our corporate clients and financial investors, from hedge funds to institutions to private equity.

etc., etc.

Isn't it ironic that of all the articles mentioned the closest one to the truth is the Al Jeerza, the Arab news service interview which is the only media to zero in on the impact of financial manipulation in the price of oil?

USA Olympic Champions

The world got a rare view of America that could only be possible through the Olympics as a Texan, Iowan, Russian and Chinese combined to give the USA the first sweep of gold and silver in the women's overall gymnastics championship in history. What you say?

Try this. Nastia Liukin of Texas won the gold and Shawn Johnson, her roommate from Iowa won the silver medal in the Olympics all around, the first time it ever happened.

Now Nastia is the closest thing we have to gymnastic royalty as her father and coach, Valeri Liukin was a gold medal champion from the Soviet Union and her mother, Anna Kotchneva was a world champion rhythmic gymnast from the Soviet Union. Nastia was born in Moscow.

Shawn was born in Iowa and one of the first students of Chinese gymnast Liang Chow who moved from Beijing, China to Iowa to attend university and start a training school.

So a Russian born girl and her Soviet champion parents move to Texas while a Chinese gymnast moves to Iowa and finds a future Olympic champion at his door. About 10 years later they all converge in Beijing for the 29th Olympics, with Nastia and Shawn roommates where they electrify the world with dazzling performances.

In the end just 6 one hundredths of a point separates the two, who were cheering for each other during the competition, and proved that sportsmanship still rules in America where you can be competitors and remain friends.

Do I sense a movie in the making?

McCain Ad Says Obama the Anti-Christ - Blows Biblical Revelations Prophecy

Just when you thought the political advertising in this years presidential slash and bash campaign could sink no lower McCain comes out with a stunner that even the Evangelical voters find a bit too much to stomach.

The whiz geezers (they sure aren't whiz kids doing this stuff) in the McCain camp released a new spot identifying Obama as "the One", which in Biblicalese means the Anti-Christ, as a warning to Americans that I guess we are falling into the lure of Satan.

After watching our financial institutions and government leaders the past few years I figured long ago we fell under Satan's influence and I am glad McCain clarified what God really meant with that whole revelations thing.

Of course in Revelations the Anti-Christ seduces the people into following him as he sets out to clean up the world and the people have no idea their Savior is really the Anti-Christ. So if McCain is right about Obama, then McCain screwed up the whole Revelations prophecy by telling us ahead of time. How could we be unsuspectingly seduced by the Anti-Christ when we already know the dude?

People have been waiting a few thousand years for the End Times to get it on and now that McCain has ruined the prophecy does that mean we have to wait a few thousand more years before our next window of opportunity? Come on man, why spoil all the fun of the End Times like that?

McCain people say he was just kidding with the ad, they didn't really mean to alarm all those righteous Christians that don't like McCain and might vote for Obama. Now, if there is a "race" card in this campaign is there also a "religious" card to be played? So many cards have already been played this election from gender bender to old geezer cards that I'm about to start a deck burning campaign to rid the nation of politically correct crap cards.

So was McCain also kidding when he wrecked five Navy planes, a key element in his "experience" to be commander in chief? Actually he only wrecked three, two others were shot down.

There was the plane crash in Corpus Christi Bay practicing landings. The crash into the power lines in the Mediterranean flying too low. He said he was over the Iberian Peninsula, which really means Spain. Then he crashed a jet returning from an Army-Navy football game.

Finally, there was the first time he was shot down when he was waiting on the deck of the USS Forrestal aircraft carrier to take off and a rocket was accidentally fired and hit his plane causing an explosion that tragically killed 134 sailors, destroyed 20 aircraft and nearly sank one of the largest ships in the world. All this before the surface to air missile shot him down over Hanoi.

So that means McCain's commander in chief experience which resulted in 28 medals came from 23 combat missions in Vietnam, a total of 20 hours of flying over enemy territory. Now that is a heavy metal experience but tens of thousands of Vietnam vets spent thousands of hours in enemy territory and instead of a trophy case full of medals they got Agent Orange.


So if the Obama Anti-Christ ad was just "kidding around" and the slew of wrecked jets was just kidding around along with the commander in chief war record credentials is there any reason in the world to take McCain serious? I hope so because he's made a lot of promises that we know about not to mention all the promises he may have made we don't know about.

Now, as for the End Times, McCain should stop meddling in Revelations and start telling us what makes him different from the Anti-Christ. He should stand in the pulpit of truth and stop telling jokes if they were really jokes and not merely provocative, subliminal, hate-baiting ads selling lies.

Will November ever come?

Why Not Warning Labels for Financial Experts?

One thing the federal government can do is require warning labels for anything that is, may be or could be hazardous to the health or safety of the citizens. They are expert at it with the dozens of alphabet soup agencies forcing manufacturers to slap notices on the labels or to disclose warnings when doing television commercials.

Haven't you all heard the dozens of warnings for different drugs. When they finish their outrageous lists you wonder how anyone in their right mind could ever use the damn stuff. Some even say the product "may" help a few people even if most can't be helped. I think that it a little crazy.

Still, the FDA, CPSC, DOA, ICC, SEC and FTC among countless others have developed quite a reputation for warning us about everything under the sun. Some prescription bottles have longer warnings than product information.

So it occurred to me that there is nothing worse for your mental or physical health than getting wrong advice on what to do with your money. It seems every bank, brokerage house, investment banker, stock broker, 401 K advisor and anyone out there telling you what to do with your money should have a warning label because every one of them have been wrong in the past year or two.

The wild predictions of spiraling oil prices up to $200 a barrel, skyrocketing inflation, a total collapse of the housing and credit markets, massive foreign trade deficits, and horror story after horror story intended to drive the market up or down any particular day depending on whether the source of bad news is buying or selling are just too much.

These people have been instrumental in causing our home values to fall, our stock portfolios to dissipate, our retirement funds to evaporate and our economy to nearly collapse. Isn't it about time the feds label them for what they are, a danger to our health and well being?

Maybe it should read like the following and be required on their news articles or over their picture if they are on television?

DANGER: The following is from a proven mental minimalist whose motivation is toward their own funds, bonuses, buyouts, and bosses with no regard to the fool consumers listening to them. These people are idiots and so are you if you do what they say. Ignore them or burn in hell with them!

History Repeats - Russian Tanks on the Move

It seems we've seen the images before, many times before, and they all seem to lead one to the same conclusion. No matter how things change they remain the same. When will the Russians learn we are watching?

Poland 1939

Berlin 1945

Hungary 1956

Czechoslovakia 1968

Georgia 2008

Newest Olympic Heroes USA Style

So far the Olympics have been long on advertising and short on heroes but two genuine articles have emerged from the sports competition to capture the fancy of the world. Of course there is everyone's hero Michael Phelps closing in on a bevy of records from most gold ever to most gold in a year. This golden boy is about to knock the cash register off the wall as over $100 million in sponsorships will be collected if he wins the last three races.



Now for two reasons Phelps, the newest Greek God, has a Coltons Point connection as he is a native Marylander and his sports management firm, Octagon Athletes and Personalities from DC, NYC and the world has a Coltons Point resident doing all his graphic art work from logos to birthday cards, posters to movie covers. Guess who?

Our other hero, regardless of how she does in the individual competition, is Shawn Johnson from Iowa, which just happens to be my home state as well. We have Michael Phelps at 6 feet 4 inches and Shawn Johnson at 4 feet 9 inches which just goes to show you that heart has no relationship to physical size.

Here is what the national media is saying about the power packed pixie from Iowa.

Chicago Sun Times

Johnson is Little Miss Perfect
August 8, 2008

BY Greg Couch Sun Times Columnist

BEIJING — Shawn Johnson sat straight with her fingers clasped on the table directly in front of her, and her smile big, straight and never wavering.

"In the end," she said, "if I give everything I have, I’ll be happy."

In every Olympics, we look for some tiny sweetheart to fall in love with.
Johnson is it.

She is the American gymnast, who not only is favored to win the all-around competition, but also possibly take down China’s team in the most hotly contested U.S.-China team matchup in the Olympics.

That’s right, all 4-9 and 90 pounds of this 16-year-old, probably the toughest Olympian pound-for-pound, is set to take down the big bad guys. This is a Wheaties box cover waiting to happen.

"It’s such an honor to know that USA (gymnastics) picked me," she said.

But wait, you don’t know the half of it.

The truth about Johnson is — and remember I’m a critic for a living — she is perfect. Little Miss Perfect.

If that sounds like sarcasm, forget it.

No, I’ve been studying this, looking for the flaws to expose. If she has one at all, it’s only that perfection can be annoying. It can be fake or plastic. And Johnson does have that perfect smile.

But somehow, she makes it work.

Here’s the deal: Johnson is from West Des Moines, Iowa. She had far too much energy as a baby, and was doing pull-ups in her crib. I swear. So her mom put her in gymnastics when she was 6.

She’s a straight-A student, who, according to the Palm Beach Post, spends her free time walking dogs at a shelter and wiping off muddy footballs for her high school’s team. I swear.

Her parents? Junior high sweethearts who met at a roller rink.

She’s the one.

Now, I’ve always liked gymnastics during the Olympics, found it amazing and one of the most courageous sports. You get your moment and you have to nail it. It’s beautiful movements mixed with incredible power.

But I don’t like to see how its made. These little girls are constantly overtrained and hurt, with plenty developing eating disorders.

"I have been remarkably injury-free my whole career," she said. "Minor sprains, yes. But anything big? No."

Her parents have said over and over how important it was that Johnson have a "normal" life, which, with prodigies can mean they’re allowed to make one phone call a day while starving themselves in the sports academy they’ve moved to away from their parents.

Johnson stayed in Des Moines and goes to public school. A typical work schedule for these kids is 40-hours a week of training. Johnson does 25, which would seem to be plenty, and might explain her lack of injuries. She also says she’s on no particular diet.

That’s all the plan of her coach, Liang Qiao, who now goes by "Chow." See, when Johnson’s mother enrolled her in gymnastics as a 6-year old, it turned out that the guy running the place was Chow, a former Chinese champion gymnast.

Now, I’m not sure how many Chinese champions can accidentally be found in Des Moines, but that’s where he was. He came to the U.S. to go to the University of Iowa, and then staying nearby to open his gymnastics school.

The Washington Post

By Thomas Boswell
Wednesday, August 13, 2008

BEIJING
Women's gymnastics at the Olympics always lifts or breaks your heart. On Wednesday, it did both. Few athletes in the world can make you catch your breath in disbelief or define the line of human beauty more powerfully that Shawn Johnson on the balance beam, Nastia Liukin on the uneven bars or Chinese captain Fei Cheng on the vault. Give a bird its wings, a squirrel his tree or a chimp her vines and they can't touch what these dervishes can do.

But if it's tears you want, the kind you feel inside when you see a small girl in glitter makeup trying to pretend she's 16 -- and eligible for the Olympics -- when she may only be 14, then National Indoor Stadium was the place to come for that emotion, too.

Yet the bitterest tears of all belong to an undeserving victim, U.S. captain Alicia Sacramone, who bombed on the last two events -- falling off the balance beam, then tumbling on her rump in floor exercises, a discipline where she was world champion in 2005. Her scores demolished the United States' (slim) chances at a comeback.

Sacramone has lots of disadvantages. She's 20, grown, smart, goes to Brown and is old enough to know what's at stake. All are nightmares to a gymnast. Better to be young, limber, oblivious and fearless.

As she left the mat, the two-year battle between the U.S. and China -- with each winning a world title by a tiny fraction of a point -- was as good as decided.

Sacramone fled her teammates, buried her head in her hand and began to cry. For the next 20 minutes, she fought back tears, sometimes failing. After the verdict was final, Johnson sat next to Sacramone, looped her arm through the older girl's, then laid her head on Sacramore's shoulder in an instant of consolation.

Such talent and grace, such sadness and sympathy, such ethical complexity, all tangled up together. In the end, it may be too much to digest. Who's juicing, who's not? Whose age is fake or real? Which judges are biased or wise? Forget it, Jake, it's the Olympics.

Only Johnson, who did well in all four events and is favored in Friday's all-around, saw the day in focus, got it exactly right with a kid's clarity. Sometimes complexity's a bore. Hold tight to the strong and solid -- what there is of it.

"I honestly think our team did great today," she said, smiling at a massive news conference. "We are proud of each other no matter what we do. We are like a family. We respect China. We will wear our silver medals proudly."

Johnson is 16. Really. Though she'll have a hard time growing wiser.

Christian Science Moniter

Amid US gymnastics disappointment, Shawn Johnson’s grace

Perhaps nothing at these Games will be more precious than that one moment, when we caught a glimpse of a young woman whose gifts stretch well beyond sports.

Mark Sappenfield, August 13, 2008 edition

Beijing
When the women’s gymnastics team competition was all but over, save China’s last, perfunctory turn on the floor – when American team captain Alicia Sacramone no longer had anything to distract her from the mistakes that had made a gold medal impossible, Shawn Johnson sat beside her.

China would win. The US, who had promised so much, would be silver medalists.

Sacramone looked as though she was on the edge of a cliff, holding back that inevitable moment when the disappointment in her falls on floor and beam would overwhelm her and plunge her headlong into tears.

But Johnson smiled that smile that comes so easily for her, and took Sacramone’s arm in hers, almost as if they were an old married couple on a park bench. For a moment, however briefly, Sacramone smiled, too.

No matter what Johnson does in two days’ time on the women’s all-around competition, I hope the world will remember that image – of a 16-year-old girl who is not only an extraordinary athlete, but also something altogether more profound and worthy of celebration: an uncommon human being.

“She is a very loving person,” says her coach, Liang Chow. “That shows in her gymnastics.”

To imagine that Johnson could ever blame her captain for preventing her from being the Michael Phelps of women’s gymnastics is not to understand who she is. Before today, it was by no means inconceivable that Johnson could have won four golds: in the team event, the all-around, and the floor and beam individual events.

But she knows, as does the entire team, that without Sacramone, they would not have won the world championship last year. After a shaky rotation on beam then, Sacramone gathered the team together – in a huddle as gymnasts often do – but this time, very clearly under her wing. On that day, the floor event was flawless and America was world champions.

Today, the result was different. Johnson was not.

“We love her no matter what,” she says.

These sorts of things are said every day at the Olympic Games. Often they are honest, sometimes they are not. With Johnson, there is no doubting.

Much has been made of the age of the Chinese gymnasts. We know Shawn Johnson is 16. But she is so much older than that, too.

McCain the "wrinkly", "white-haired dude" says Paris

"Hey America, I'm Paris Hilton and I'm a celebrity, too. Only I'm not from the olden days and I'm not promising change like that other guy. I'm just hot. But then that wrinkly, white-haired guy used me in his campaign ad, which I guess means I'm running for president. So thanks for the endorsement white-haired dude."

With that video response to McCain's unauthorized use of her image in an ad blasting Obama and the rather negative copy about the celebrities in America, our favorite celebrity brat came out of hiding and announced plans for her new presidential campaign.

Notwithstanding the fact she is just 27 and the minimum age for president is 35, I am delighted she is in the thick of it because our other two presidential candidates were acting very much like a couple of spoiled brats and Paris might knock some sense into them.

Hilton might be one of the most underrated celebrities in America because the press has been so quick to paint her as an airhead. She came from a super rich family but her grandfather has already disinherited her. That means she has no multi-million dollar inheritance and no sugar daddy paying all the bills for her to play.

So faced with that reality what did Miss Hilton do? She started charging to make appearances at clubs, parties and practically everywhere she goes. Not a bad move for a party girl certain to grab headlines. Rumor has it her fees run up to $100,000.

She also started several of her own businesses which own the rights to her name, image and whatever else she does. And companies from around the world have hired her for ad campaigns, new perfume products, clothes and who knows what else? Last year the bad girl of LA who the media portrays as a spoiled brat made over $7 million and none of it came from the Hilton estate.

I get a good laugh watching Paris and we even invited her to come to Coltons Point with her TV show, the Simple Life, and see what we had to offer. We promised her Hillbilly Joe would escort her around. Unfortunately she wound up in jail at the time.

She brings a breath of fresh air and laughter into a race that was getting all to hot and heavy with both candidates resorting to the old macho mode, name calling, finger pointing and stupid things coming out of their mouths.

In the range of small world, Paris's mother gave $4,600 to McCain during the campaign. You would think the McCain advisors would check to see if they were going to offend any donors before putting Paris into his ad. Hilton's mother said McCain's ad is "a complete waste of the country's time and attention at the very moment when millions of Americans are losing their homes and their jobs." Too bad the candidates don't share her sentiments.

What a Waste of Energy - America's Energy Policy

Its Time for "North America for Americans"



Hey guys, take a minute to catch your breath and look around. Well, that might be a lot to expect as I've been in campaigns before and I know how hard it is for a candidate to find advisors who actually listen to the public rather than try to tell the public what to think. This campaign seems to have more than its fair share of experts who continue to miss the point and miss the opportunity to show us how their candidate is prepared to lead.

If the candidates want to be responsible then act responsible. If the candidates want to be taken seriously on energy, then act like you know what you are talking about. And if the candidates want to save America then be gentlemen and work together to save us. Otherwise, get out of the way and shut up!

Our first and only concern should be energy independence from foreign control and manipulation. There must be an American strategy that includes our neighbors to the north and south, Canada and Mexico. Between the three (USA, Canada and Mexico) we have more than enough reserves of oil, natural gas and alternative energy capacity to meet our needs forever.

Between the three we have the technical skills, exploration capacity, financial resources and the spirit of freedom needed to create our own cartel to meet our future needs, to control inflation which is now driven by oil prices, to offset problems in one area (hurricanes) with increased production in another area (Canadian shale reserves), and to finally gain independence from foreign manipulation.

There should be no more Dubai's financed with the blood money from American consumers. In the future the horrendous transfer of wealth from the Americas to Arab nations and hostile energy producing nations for oil should stay at home. Instead of $15,000 hotel rooms in the desert, we can give away health care to our citizens. Instead of pro golf courses in camel country how about a good education for everyone here.

If the United States, Mexico and Canada decided our shared interests were far more important than our differences, that our heritages are bound together through generations, that our borders touch and that if the citizens of all three countries had good homes, good health and good jobs, there would be no need for illegal immigration, then we could all live in peace and harmony.

Well the money we wasted buying inflated oil could have accomplished just that and isn't it about time we used that money to do some good for the Americas? Stop pointing fingers and building walls and work together. Mexico and Canada have incredible oil reserves. We all have a need and desire to help each other grow. And we sure don't need the rest of the world to interfere.

Years ago when we passed NAFTA our biggest mistake was not that it went too far, it didn't go far enough. Oh we moved jobs to Mexico and US manufacturers saved money, but at what cost? We didn't protect the workers down there like we protect them here. We didn't make sure the people of Mexico got a better standard of living, decent homes, food and housing and a better education for their children.

Maybe it is time we stepped back and did it right. Maybe we need an agreement based on a shared interest in creating energy independence for all three nations. One that assures that excess profits are invested in the people, in their standard of living and quality of life. Maybe we should stop glamorizing the excesses like the development of Dubai and start focusing on the real world which is the people living in our three countries in substandard conditions with inferior education and jobs in the wrong place.

Take the current popular energy issue. Every day McCain and Obama cram more and more ideas into their energy programs, sometimes changing from the day before and sometimes saying things that are just plain crazy. The only thing worse than the candidates butchering of the energy issue is the press failing to challenge the candidates on their smorgasbord of mishmash to solve our energy problems.

Did anyone tell the candidates that the price of oil has dropped $28.00 a barrel? Did anyone tell them the price of gas has gone down for 18 straight weeks? How about the fact the American public knows what to do and have reduced the use of gas every week for the last 19 weeks, the greatest decline in gas usage in history? Do our politicians know while they spit out ideas like machine gun bullets and fail to take any action on anything, the people have said enough is enough and stopped driving so much, turned up the thermostats, got rid of the gas guzzlers, and reduced the amount of travel.

While the candidates run attack ads and tell us how stupid their opponent is the people have driven oil prices down. While congress goes on vacation to tell us why the Democrats or Republicans are blocking energy reform, the price of oil is dropping without their reforms. Now it is a start and there is a long ways to go but the nonsense being offered by congress and the two candidates to help us out of the mess only compounds the problems.

If the price is coming down for no reason just like the price went up for no reason then something is wrong with the system. All the nuclear reactors in the world and all the alternative energy boosts in the world will not overcome corruption in the marketplace, unfair business actions, malicious price manipulation of the futures market, and the evil intentions of oil speculators.

We need an investigation of the price manipulation and prosecution of the perpetrators of the crimes, meaningful prosecution of the bad guys, if we want to stop the same corruption from corrupting the energy alternatives. Hiring a lot more investigators and prosecutors will have an immediate effect on prices. Candidate proposals may have an effect by 2012 or later. I don't know about you but I am not content to wait until the Mayan Indians say it is the end of time (December 21, 2012) before we achieve anything.

Nuclear reactors, contrary to the vast experience of McCain, are still dangerous. Three Mile Island and Chernobyl were not jokes nor movies, they were real. I was at TMI for the multi-billion dollar clean up of that "harmless" accident. If $5-7 billion is harmless what is the world coming to? And Chernobyl, I met the kids that were victims of radiation poisoning, the kids that must remain in the hot zone for life because they can contaminate other people. Of course life for them is about 10-12 years.

There is an accident in the Ukraine and sheep die a thousand miles away in Scotland. Land from nuclear testing over the years is a dead zone for hundreds of years. Nuclear waste at our nuclear plants sit stored at the plants, vulnerable to terrorist attack, because congress cannot get a nuclear disposal facility built in the desert. When a nuclear plant wears out, and they do just like everything else, the plant must be decommissioned and that cost is now more than the cost of building the plant in the first place. Nuclear has a role but must be used with great caution.

On the other hand, there are known reserves of oil sufficient to meet the world needs for 300 more years. We are not running out of oil tomorrow. The price manipulation of oil has nothing to do with the supply and demand, the normal supply and demand. Off shore drilling, even the very limited Alaskan drilling, can only help us be more independent. But we need refinery capacity to make the various types of gas and oil we need if we get the crude locally.

Together the three nations should develop and implement a long term energy independence plan that makes all known and unknown reserves available to the producers including the Gulf, Atlantic and Pacific deep water reserves, the limited areas in Alaska that should be developed, and the many other known reserves in the countries.

As new territory is made available for drilling refining capacity must be expanded in the Americas to produce the products we need. There must be substantial incentives for alternative energy and energy conservation programs. For example, energy savings of 50% or more can be made in our older housing stock. Multiply that by a few hundred thousand homes and a real dent in energy demand can be realized.


I say withhold foreign aid to oil producing nations until the foreign governments lean on their local producers to stop speculation. If they want to play games against us then cut off our foreign aid to the crooks.

A meaningful partnership is needed between the three bordering nations, the energy companies in those nations, the conservation and alternative fuel companies in those nations, and the building code enforcement authorities in those nations. Such a partnership will protect and create jobs, stop foreign trade deficits, stop the transfer of wealth to Arab nations, and stop the out of control oil and gas prices. Together we have a chance to change history.

STAY TUNED TO THE LATEST RERUNS OF THE NEWS

Tell me I'm not the only person to notice that more and more television newscasts are rerunning stories from the day before and even two days earlier. It used to be they might try to update an earlier story for filler purposes on slow days but now it seems that over half the news stories on news programs are reruns from the previous broadcasts. I think they have cut the budgets so much that they might not have any reporters left to report fresh news.

Most network and cable news channels now run long blocks of paid advertising during the late evening, early morning and weekend hours. That never would have happened under Ted Turner at CNN who believed a news channel was supposed to report the news twenty-four hours a day. Guess it is kind of hard when most of the reporters have been eliminated.

The networks have found other ways to try and milk more money from the news divisions. CNN did a special on Black America, a two part special, and then proceeded to broadcast the entire thing about 5 times over a couple of days killing off about 10 hours of coverage. Remember, every rerun means that much less original production.

Most talk shows on CNN, Headline News and others, programs like the O'Rielly Report, Glenn Beck, blah, blah, blah are rebroadcast as many as three times in 24 hours as if once wasn't enough. When too many reporters are laid off they start broadcasting more and more entertainment and celebrity expose stories since the self-promotion of the stars is always available from the studios.

Most quasi-news shows like Today, Good Morning America and others often have guests introducing new movies, television shows or books and more often than not they work for another division of the owner of the network. Thus Miley Cyrus of Hanna Montana fame who is owned by Disney is being interviewed on Good Morning America, plays a concert on that show to introduce her newest song, and shows up on several other ABC related shows which is also owned by Disney.



Fox, NBC and CBS all do the same thing when they get the chance so you never really know if a morning show is featuring talent because of the merits of the talent or because that person is contributing to the profit margin of the network. If you watch the news footage closely you can also see the same footage being used over and over again although the story may change slightly.

Which leaves us with the big question. Is our news being pre-packaged as Hillbilly Joe and Dogman say and are we being spoon fed stories that keep our attention diverted away from the truth? If we are getting a daily dose of propaganda then is anyone getting the truth? And what sinister force is behind the disappearance of real news on American television?

Stay tuned for the rest of the story...

THE BROKER FROM INDIA CRUSHED BY AN ELEPHANT STAMPEDE

Just after the dogs took me for a walk this morning at the crack of dawn I was watching the wayward satellite signal that keeps interfering with my television and the MSNBC early morning show came on. For those of you not familiar with MSNBC, it is the joint venture between Microsoft and NBC and I think it thinks they are financial gurus as they have all these financial experts in stock markets around the world reporting in. Truth is they have the lowest ratings of any of these type of networks so either no one takes them serious or they needed a place to put their kids to work.

The "experts" were reporting in from around the globe and when they got to the guy in Hong Kong, he was actually from India, they made a point of how he managed a few billion dollars in some fund. This guy talked as if he represented the financial experts in India, Hong Kong, China, Viet Nam and all those other places not generally known for being masters of capitalism.

He said about 67% of his billions are invested in commodities, meaning oil and food futures. That got my attention because oil has been going down almost every day, already exceeding a loss of 14% in two weeks, while food has been falling even faster. He explained that in India, China and Viet Nam the inflation rate is 12-24% and they are growing economies. Since the USA claims an inflation rate of just 3% he knew the Americans were lying and as soon as we tell the truth oil and food futures will skyrocket back up. He also said the Europeans were lying about inflation as well.

When questioned by the other experts he became adamant saying the US economy was crumbling and the press and government were keeping the truth from the public. He said there was no way the US could have a 3% inflation rate when oil and food doubled in price. When the others pointed out that food and oil are major economic factors in emerging economies, but are a very small part of the huge US gross national product, the guy gave the camera a real goofy look and said we would see.

I quickly checked to see if I was accidentally tuned in to the Comedy Channel. This was a classic Saturday Night Live skit. But no, it was the real deal. And when I thought about it I got a little nervous. All along I've said the speculators were driving up the price of oil and food and when they made their billions they would start selling, which they are. Well this whiz kid from India convinced someone to let him handle billions of dollars and he is throwing it into the speculation market based solely on his insight that everyone in America is lying about the inflation numbers.

There are clearly two types of speculators, the informed sharks and the wallowing minnows and the whiz kid belongs in the latter. When the commodity prices continue to fall, which they are doing again today, in time the guru is going to see his assets go down faster than oil prices and one day the rich in India are going to ask him what happened to all their money and he is going to say the Americans defrauded him out of it.

So the USA gets a bad name in the world because some idiot from India claims we are lying about our inflation rate. Since Hong Kong is now part of China and we are not exactly best friends with China I wonder if the guy from India who is in Hong Kong is a plant to undermine the US economy or just another illegal immigrant to China. If he is truly investing billions of dollars from India and China and the oil and food prices continue to fall then don't be surprised if you read about an Indian broker who was crushed by a mysterious elephant stampede.

Almost 30% of the population in India lives below poverty standards, with suffering so great it made Sister Theresa a saint. Class and religious warfare are rampant. In spite of this the US has lost all of its computer customer service operations to India so now if you call customer support or technical support you have no idea what they are talking about. They might speak English but they have little understanding of the English speaking people over here. The whiz kid is the same. He may speak our language but he has no clue what makes us tick. I only hope he can explain what happened to his investors.

China's Cyber-Militia

National Journal
(Excerpts from COVER STORY - China’s Cyber-Militia)

Full story:
http://www.nationaljournal.com/njmagazine/cs_20080531_6948.php

Chinese hackers pose a clear and present danger to U.S. government and private-sector computer networks and may be responsible for two major U.S. power blackouts.

by Shane Harris

Sat. May 31, 2008

Computer hackers in China, including those working on behalf of the Chinese government and military, have penetrated deeply into the information systems of U.S. companies and government agencies, stolen proprietary information from American executives in advance of their business meetings in China, and, in a few cases, gained access to electric power plants in the United States, possibly triggering two recent and widespread blackouts in Florida and the Northeast, according to U.S. government officials and computer-security experts.

One prominent expert told National Journal he believes that China’s People’s Liberation Army played a role in the power outages. Tim Bennett, the former president of the Cyber Security Industry Alliance, a leading trade group, said that U.S. intelligence officials have told him that the PLA in 2003 gained access to a network that controlled electric power systems serving the northeastern United States. The intelligence officials said that forensic analysis had confirmed the source, Bennett said. “They said that, with confidence, it had been traced back to the PLA.” These officials believe that the intrusion may have precipitated the largest blackout in North American history, which occurred in August of that year. A 9,300-square-mile area, touching Michigan, Ohio, New York, and parts of Canada, lost power; an estimated 50 million people were affected.

Officially, the blackout was attributed to a variety of factors, none of which involved foreign intervention. Investigators blamed “overgrown trees” that came into contact with strained high-voltage lines near facilities in Ohio owned by FirstEnergy Corp. More than 100 power plants were shut down during the cascading failure. A computer virus, then in wide circulation, disrupted the communications lines that utility companies use to manage the power grid, and this exacerbated the problem. The blackout prompted President Bush to address the nation the day it happened. Power was mostly restored within 24 hours.

There has never been an official U.S. government assertion of Chinese involvement in the outage, but intelligence and other government officials contacted for this story did not explicitly rule out a Chinese role. One security analyst in the private sector with close ties to the intelligence community said that some senior intelligence officials believe that China played a role in the 2003 blackout that is still not fully understood.

Bennett, whose former trade association includes some of the nation’s largest computer-security companies and who has testified before Congress on the vulnerability of information networks, also said that a blackout in February, which affected 3 million customers in South Florida, was precipitated by a cyber-hacker. That outage cut off electricity along Florida’s east coast, from Daytona Beach to Monroe County, and affected eight power-generating stations.

Bennett said that the chief executive officer of a security firm that belonged to Bennett’s trade group told him that federal officials had hired the CEO’s company to investigate the blackout for evidence of a network intrusion, and to “reverse engineer” the incident to see if China had played a role.

Bennett, who now works as a private consultant, said he decided to speak publicly about these incidents to point out that security for the nation’s critical electronic infrastructures remains intolerably weak and to emphasize that government and company officials haven’t sufficiently acknowledged these vulnerabilities.

The Florida Blackout
A second information-security expert independently corroborated Bennett’s account of the Florida blackout. According to this individual, who cited sources with direct knowledge of the investigation, a Chinese PLA hacker attempting to map Florida Power & Light’s computer infrastructure apparently made a mistake. “The hacker was probably supposed to be mapping the system for his bosses and just got carried away and had a ‘what happens if I pull on this’ moment.” The hacker triggered a cascade effect, shutting down large portions of the Florida power grid, the security expert said. “I suspect, as the system went down, the PLA hacker said something like, ‘Oops, my bad,’ in Chinese.”

The power company has blamed “human error” for the incident, specifically an engineer who improperly disabled safety backups while working on a faulty switch. But federal officials are still investigating the matter and have not issued a final report, a spokeswoman for the Federal Energy Regulatory Commission said. The industry source, who conducts security research for government and corporate clients, said that hackers in China have devoted considerable time and resources to mapping the technology infrastructure of other U.S. companies. That assertion has been backed up by the current vice chairman of the Joint Chiefs of Staff, who said last year that Chinese sources are probing U.S. government and commercial networks.

Asked whether Washington knew of hacker involvement in the two blackouts, Joel Brenner, the government’s senior counterintelligence official, told National Journal, “I can’t comment on that.” But he added, “It’s certainly possible that sort of thing could happen. The kinds of network exploitation one does to explore a network and map it and learn one’s way around it has to be done whether you are going to … steal information, bring [the network] down, or corrupt it.… The possible consequences of this behavior are profound.”

Brenner, who works for Director of National Intelligence Mike McConnell, looks for vulnerabilities in the government’s information networks. He pointed to China as a source of attacks against U.S. interests. “Some [attacks], we have high confidence, are coming from government-sponsored sites,” Brenner said. “The Chinese operate both through government agencies, as we do, but they also operate through sponsoring other organizations that are engaging in this kind of international hacking, whether or not under specific direction. It’s a kind of cyber-militia.… It’s coming in volumes that are just staggering.”

The Central Intelligence Agency’s chief cyber-security officer, Tom Donahue, said that hackers had breached the computer systems of utility companies outside the United States and that they had even demanded ransom. Donahue spoke at a January gathering in New Orleans of security executives from government agencies and some of the nation’s largest utility and energy companies. He said he suspected that some of the hackers had inside knowledge of the utility systems and that in at least one case, an intrusion caused a power outage that affected multiple cities. The CIA didn’t know who launched the attacks or why, Donahue said, “but all involved intrusions through the Internet.”

Donahue’s public remarks, which were unprecedented at the time, prompted questions about whether power plants in the United States had been hacked. Many computer-security experts, including Bennett, believe that his admission about foreign incidents was intended to warn American companies that if intrusions hadn’t already happened stateside, they certainly could. A CIA spokesman at the time said that Donahue’s comments were “designed to highlight to the audience the challenges posed by potential cyber intrusions.” The CIA declined National Journal’s request to interview Donahue.

Cyber Terrorism - America's Achilles Heel

Cyber Terrorism - Part 1
What Price for Freedom?

Series by Jim Putnam


We live in a society that dictates the need to protect our selves, families, homes, property and business. America without insurance would be like air without oxygen. It is difficult to find a single aspect of life in America in which protection is not integrated and essential.


Yet our leadership tell us that the most basic services in which our life and lifestyle depends, the infrastructure of the American standard of living, cannot be protected. The necessities of life, food, air, water, housing and transportation, are all vulnerable to terrorist attack.


We can protect the president. We can protect our money, our gold and our treasures. We can even protect our nuclear arsenal and weapons of destruction. But we cannot protect our quality of life and our people from the threat of cyber terrorism.


Former Bush Administration cyber expert Richard Clarke predicts an “Electronic Pearl Harbor” and has blasted the private sector for failing to protect our infrastructure. Yet all experts agree it is a complex issue. Cyber security seems to demand a trade off. More security can be given if we are willing to sacrifice our freedom and privacy.


America’s corporate world, especially the financial and international commerce communities, refuse to accept the government intrusion into their world of corporate secrets for fear the information will be used to tax or prosecute them. Recent examples of corporate greed and abuse suggest there is a lot to hide from the government. Yet the privacy issue is valid.


At the same time, the corporate world has been reluctant to tell us if they have been successfully hacked. To do so would acknowledge they are vulnerable. It would raise doubt as to their ability to protect their records, clients and intellectual property. It would threaten their credit rating and worst of all, it could cause their stock value to fall. Better to cover up the attack than to undermine investor confidence.


Politically, with the federal elections on the horizon and control of the White House in the balance, it is always safer to blame someone else or deflect blame than to assume responsibility. The politicians use the convenient mantra we can’t protect our infrastructure from cyber attack. They blame the private sector for failing to develop adequate security. And they accuse the private sector of refusing to cooperate and of withholding information about cyber vulnerability.


Wouldn’t you refuse to tell the government all your secrets? The government can’t keep it’s own secrets, let alone be trusted with proprietary corporate secrets. Still it is a “Catch 22” that must be overcome for the average citizen to go to sleep at night feeling secure that their essential services are protected from the hands of blood thirsty, hate filled terrorists committed to killing Americans and destroying our way of life.


Because tonight the water supply could be poisoned. Tonight the electrical grid could be shut down and air conditioners would stop working in the heat wave. Nuclear reactors could have a melt down sending clouds of deadly radiation into the air and contaminating the countryside. Air traffic controllers could be stopped from contacting the thousands of planes in the air.


Floodgates on dams could be opened sending billions of gallons of water crashing down on communities. You could wake up tomorrow and your bank records could be gone, your insurance coverage cutoff, and health care disrupted. Raw sewage could be diverted into your drinking water. Emergency calls to 911 could go unanswered.


Because our standard of living is excessive, it takes an excessive infrastructure to support it. Our lifestyle is computer and energy dependent. From the cockpit of an airplane to the control room of a nuclear reactor, the 500 digital TV channels to the cell phone attached to your ear, we need the infrastructure to feed our addiction for more.


The techniques that could be used by a single terrorist cell working through cyber space could threaten the very existence of our national infrastructure. Every single catastrophe I mentioned is possible from a few keystrokes on a keyboard. So if the politicians are not responsible, the government can’t help, and the private sector is in denial, where do you turn for help?


We need a wake up call to America, to the government leadership and the business community on the threat to our national infrastructure and what can be done to protect our resources and people. It is too late for theories and hypothetical solutions to very real problems of today threatening our standard of living and quality of life.

Cyber Terrorism - Part 2
Media Awareness?


In America there are time-honored traditions for using the media to sell you everything from the news to the latest unnecessary drug. Once upon a time you could distinguish between media’s supposedly unbiased news stories, and those selling goods, services and points of view.


That day is gone. The editorial policy of the media outlet dictates the slant of the news coverage. Revenues rule philosophy and news is no longer a service but a profit center. News content and presentation is designed for ratings, sales and advertising revenue, not objectivity and public good.


In light of this, why is news coverage of cyber terrorism generally limited to technology stories for special interest groups and safely tucked away in the egghead section? Three obvious reasons come to mind. 1.) It is a complex issue. 2.) It might scare the public. And 3.) It might upset the advertisers on the media.


Cyber terrorism is the largest single threat to the quality of life for our citizens. It represents a far greater threat than corporate corruption, government inertia, media bias or bank and phone company service charges. So why are we not being warned about it?


Sure, the cyber world is complex, isn’t all technology? How many consumers know how their air conditioner, television, automobile or computer work? How many know how their money got from a bank into the ATM to them? They don’t. You throw a switch, push a button, or turn a key and it works.


People are not stupid. They don’t need to know how technology works, just what it can do for them. They know all aspects of American life are dependent on the computer, or the electricity that powers the computer. They know we are being bombarded by microwave beams and every other form of electronic signal and frequency to support that technology.


I have a simple way to perceive the cyber world. Our physical world is three dimensional and interpreted by the physical senses. The cyber world is what is beyond the physical realm, is limited only by one’s imagination, and is interpreted by the expanded mind.


As to our concerns cyber terrorism stories would scare the public, so what! One of our constitutional freedoms has always been the right to be scared to death. Stephen King and Dean Koontz wouldn’t sell many books if the public did not want to be scared. Many movies and TV shows were successful because they were very scary.


People pay billions of dollars to be frightened. Supposedly “free” news stories on cyber terrorism would be a great bargain. Sometimes the power of the media to scare people can change our way of life, and sometimes for the better.


Finally, there is the concern that cyber terrorism stories might upset advertisers. Does anyone doubt it? Computer manufacturers, software companies, technology driven companies and companies dependent on communications and advertising for sales are all directly affected. So are services that are electronically dependent like ATM banking, credit cards, phones, etc.


Of course they don’t want stories about how their product can be hacked by terrorists, or how easily services can be disrupted. Billions of dollars in advertising revenue from these companies are poured into the media, the same media that brings you the news. Do you really think “truth” is more powerful than investor confidence or corporate stock valuation?


Those advertising dollars can buy a lot of influence, especially when the advertising and media companies are losing ratings, readers and revenues. As long as the news sources are owned by the same media companies dependent on ad dollars for valuation and survival, there could be a potential conflict of interest. The recent collapse of stock prices, lost advertising revenues, increased cable and digital competition, and fewer viewers or readers have already caused media companies major problems.


They can ill afford to lose more. In spite of all these reasons why the threat of cyber terrorism is not adequately covered by the news media, occasionally there are stories that contribute to understanding the truth. Barton Gellman, Washington Post Staff Writer, wrote a story titled, “Cyber-Attack by Al Qaeda Feared”, published June 27, 2002. It clearly identified the problem. Unfortunately, to find it you had to get to the Internet online technology section of the Washington Post, but at least it was a start.

More recently The National Journal, not the traditional news media, ran a cover story (May 31, 2008) titled China's Cyber-Militia by Shane Harris which discusses how Chinese hackers pose a clear and present danger to the U.S. government and private sector computer networks and may be responsible for two major U.S. power blackouts. The story is reprinted in the CPT.

Cyber Terrorism - Part 3
Who are the hackers?


Most experts seem to agree we face an unprecedented threat from cyber terrorism, and we are all but helpless to stop it. Who are these “hackers” poised to bring the mighty America to its knees through a cyber space assault? Webster’s New World Dictionary defines a hacker as “a talented amateur user of computers, specifically, one who attempts to gain unauthorized access to files in various systems.” I think the definition falls far short.


Hackers are the new Messiahs of the cyber universe immersed in a quest to create like God. The fact they are creating illegal ways to access other people’s files is not a concern to them, as long as they are creating. Still, there is no convenient way to stereotype hackers.


I sense there are at least three distinct types of hacker, the Idealist, the Invisible and the Insidious. Popular books and movies glorify the first type, the Idealist. Hacking secured systems is a challenge to them and when they are successful it is essential they receive proper recognition for their prowess.


The need for peer recognition and ego insure they take credit for their handiwork. But in a distorted way they are not malicious in their intent. Their goal is not the destruction of property or disrupting lives, although that may very well be the consequence of their efforts.

Far more dangerous are the Invisible types. To them successful hacking is not merely to penetrate a secured file or system, but to go undetected in the process. Thus they are able to come and go at will. Government, quasi-government and shadow government agencies fall into this category. They all want to know everything you are doing. There is no system or network in the world safe from their prying eyes.


Thanks to the digital revolution our Constitutional guaranteed Bill of Rights is now obsolete. There is not a phone call, bank transaction or Internet communication safe from big brother. Private corporations have their own Invisible hackers as well so it is not just the government monitoring your life.


Curiously, all those politicians claiming to be defenders of freedom, and that includes Republicans and Democrats, liberals and conservatives, are mostly silent about the wholesale invasion of privacy now underway.


Fortunately, the eavesdroppers are so successful at capturing all calls, emails and transactions that the sheer volume is beyond their processing capability. For now our dwindling freedom is protected more as a result of bureaucratic constipation than political action. Super computers will soon eliminate that processing limitation, and everything about your life will be an open book.


The last category of hacker, the Insidious, is the most dangerous. Insidious hackers possess the skills and resources of the Idealist and Invisible hackers, but their motivation is without conscious. To them the art of hacking is a tool to get what they don’t have but want, or for bringing about war and destruction.


Criminals and fanatics, and often they are one in the same, go beyond the game of hacking through computer security barriers. Penetrating the systems is not enough. They steal the information, divert money or damage their targets in a way they cannot be caught. Or, they become cyber mercenaries for a terrorist cause and will use hacking to wreak havoc, devastation and destruction on unsuspecting victims.


Lives destroyed and human deaths resulting are nothing more than digital statistics in a higher cause being served. Unfortunately the combined power, resources and might of the vast American intelligence, law enforcement and defense communities is of no advantage when confronting cyber criminals or cyber terrorists.


The Insidious hacker is incorporeal, without material body or substance in the cyber universe. They have no base of operations, no geographic limitations and no political boundaries to restrict them. You cannot identify them with metal detectors or profiling and you most certainly cannot stop them with current computer security techniques and technology.

THE CPT ILLUSTRATED PRESIDENTIAL POLL OF 2008 - YOU DECIDE!

I am sick of reading and hearing about the polling nonsense every day concerning the presidential election. How many times do the political pundits have to prove how stupid they can be? Political polls in the media have about the same degree of accuracy as the weather man and we all know a single digit IQ qualifies you to be a meterologist.

So we are having our own poll and we are declaring the accuracy to be within 1 to 3% of the accuracy of all those political polls in our face every morning. While they claim statistical accuracy because they use voting age, eligible voters, registered voters and likely voters or whatever might be the fad that morning, we claim statistical accuracy because we simply don't care.

They have a poll sample of between 300 and 2000. Now how in the world can 300-2000 interviews tell you what 300 million people think? So we are conducting a single interview assuming our single citizen does indeed represent a cross section of America. We are going to interview Hillbilly Joe from Coltons Point.

Now some Coltons Pointers are not big on reading, Hillbilly being among them so we are going to use pictures to ask questions in hopes of getting coherent responses. Here is our first Illustrated Presidential Poll of 2008.

CPT: Who do you like for president between these two characters?

Hillbilly: That's it? Those are my only choices? What ever happened to the great American heroes like Ronald Reagan or John Wayne. What happened to America?

CPT: These are the choices the people decided on during the primaries.

Hillbilly: Must be more idiots in America than I thought. Daddy is right, we are being overrun.

CPT: So I guess you are undecided. Which one of these two has the image you want for your president?

Hillbilly: That ain't right man. Somthing just ain't right. Where is my old bomb shelter? We are in deep shit!

CPT: That's okay Hillbilly. How about their position on war, which one is closer to your stand on war of these two?

Hillbilly: Good Lord, are we being punished by Divine Providence or what? One wants to fight and one wants to run. One wants to fight forever and one wants to stop in 16 months. Ain't there no happy medium? Can't we just kick some ass and get it over with like the good old days?

CPT: So you must disagree. How about on the economy?

Hillbilly: What the hell do they know about the economy? They're both on federal welfare aren't they? Both US Senators. And both live off their rich women. McCain should retire to Bora Bora while he can still enjoy his wife and Obama should retire to Hollywood where he can really make some big bucks in movies about presidents.

CPT: So who do you want for president?

Hillbilly: Good thing I ain't got no kids. They'd be cursed by the choices we make this generation. The people didn't nominate these dudes, the media did! So I say pass a law and make the network media stars liable for the next president. Whatever happens they are to blame, not us!

CPT: So who are you going to vote for?

Hillbilly: Are you crazy? I'd lose my lifetime Redneck membership if I backed either one. Ole McCain changes position every day and I ain't got a clue what Obama's position is to begin with. It's like Clinton and Bush. They all came from the same place, speak the same double talk, and think the American public has been taking stupid pills for life!

CPT: What place is that Hillbilly?

Hillbilly: You know, Yale, Harvard, those uppity, uppity Ivy League schools where they are brainwashed from birth. I ain't registered to vote and I ain't voting and that's all there is to it! Now leave me alone dude, I'm going to see Rambo 5 at the movies.

Who Can You Trust?

So we gave you our pick for the Queen of Network News Diane Sawyer, the Kentucky girl who rules ABC News. Diane proved that beauty and brains can be combined when she won the America's Junior Miss scholarship pageant and went on to break down all the doors of television news for women becoming the highest paid woman in network news.

However, not even that is good enough for the CPT Who Do You Trust? honor. The person must demonstrate a strict adherence to the ancient rules of journalism where you are objective, fair, unbiased, and never ever try to advocate a political philosophy or cause. Diane stands alone on network TV in this regard.

Today we are announcing the winner of the cable news Who Do You Trust? honor and once again beauty and brains are packaged in the Queen of Cable News, Robin Meade, anchor of CNN Express morning news. Robin was Miss Ohio and a Miss America finalist and went on to broadcast journalism in Ohio, Florida and Chicago before joining CNN.


You can find her every morning lighting up CNN Headline news where most CNN news personalities will put you to sleep. Many shows on CNN, Fox, MSNBC and whoever claim to be fair, unbiased and no spin but they are liars of course and all have an agenda to push on the unsuspecting public from right wing to left wing, conservative to liberal, and I for one am sick of hearing them tell me what to think.

You want a refreshing, upbeat news report go to Diane or Robin. They stand alone in preserving journalistic integrity. Interesting that they came from neighboring midwestern states.

What happens if the USA has a Financial Meltdown?

If any other nation of the world faced the financial disasters we faced the last year from the oil price spiral to the housing catastrophe, the doubling of food prices to the largest budget deficit in history they would have been foreclosed, bankrupted and sold at a sheriff's auction.

The leaders would have been strung up from the nearest lamp pole, the people would be rioting in the streets, there would be a breakdown of authority and anarchy would rein supreme. So why are oil prices in a free fall, the stock market soaring, people calm and politicians still in office?

There is one intangible in economics that defies all rules of accounting and all standards of financial integrity. It is an intangible that stands in the face of common wisdom and sinister manipulation. It makes executives buffoons, analysts liars and politicians fools and in the end stands in defense of the helpless and silent majority called citizens.

It is the spirit of a nation born out of revolution, hardened by civil war and awakened by world wars. It is the spirit of freedom that guides the United States and makes it the envy of terrorists and financiers, the super rich and despots, warmongers and human rights violators, and all of those whose lives are grounded in evil and motivated by greed.

The American Spirit has withstood the test of time and the trials of sacrifice and never faltered from its ferocious defense of freedom, protection of human rights, its sense of fair play, its tolerance of diversity and its foundation in spirituality. True spirit can only come from a higher force like spirituality, a fact our Founding Fathers knew well and our current leaders keep trying to forget.

The United States is not old, it is still young and it will never lose its youthful enthusiasm because our Founding Fathers made it a living, breathing modern nation the day they adopted a Constitution that was the first in world history to be first person present tense.

The USA is the richest, most powerful and still most generous nation on Earth no matter who is the present pretender to the American seat of power (the president) for in truth the president and congress work for the people.

Our nation, under God, has evolved and grown for 232 years making it one of the oldest continuous forms of government yet one of the youngest nations in world history. Our role in the world far surpasses that of being a super power. People want what we have and we buy from others what we need and the result is an economic system that is the most unique, yet most stable in history.

I mentioned in a recent banking article how 15 of the top twenty banks in the world are from Europe. Two others are from Japan, meaning 17 of the top 20 banks in the world are from other nations leaving just 3 of the top 20 from the US. Yet the profits and losses of all those world banks are dictated by the US economy, no one else.

The world would be bankrupt if the US was bankrupt. The vast majority of money in the world is driven by the US economy, what the US needs and what the US generates, and the nations of the world, like it or not, would fade away and die without access to our markets, goods and services.

That is not an indication of arrogance but a statement of fact. We are in a financial mess but one we have faced before and when our leaders prosecute the crooks including those sitting next to them in our seats of power the system will heal and the world will be stabilized for a time.

Pay no attention to the purveyors of doom and gloom in the corporate boardrooms or on the evening news. They do not share our agenda. And we do not share their agenda. In the end they cannot win as their motives are not pure and their actions are not good.

Those that have tried to use the resources of America for personal gain will be stopped. Those whose greed drove them to manipulate markets, fix prices, corrupt associates and bribe officials have had their moment, even disrupted the world economy in the process.

In the end all the true enemies of the US are dependent on the US and cannot allow our country to fall into ruin. We have the only economy capable of making them billions of dollars and of protecting their trillions of dollars of investment in the US. The Spirit of America remains a beacon drawing the people of the world to us and that spirit will continue to dominate the world until it has spread throughout the world.