The U. S. Geological Service issued a report in April 2008 that only scientists and oil men knew was coming, but man was it big.  We have plenty of oil right here within the borders of the United States. The report was an updated one to the old 1995 version on how much oil was in the area of the western 2/3 of North Dakota, western South Dakota, and extreme eastern Montana known as the “Bakken”.    The Bakken is the largest domestic oil discovery since  Alaska ’s  Prudhoe Bay and has the potential to eliminate all American dependence on foreign oil. The Energy Information Administration (EIA) estimates it at 503 billion barrels. Even if just 10% of the oil is recoverable… at $107 a barrel, we’re looking at a resource base worth more than $5..3 trillion.. “When I first briefed legislators on this, you could practically see their jaws hit the floor. They had no idea..” says Terry Johnson, the Montana Legislature’s financial analyst…

The problem is the environmentalists won’t let us drill for it and the foreign oil producers don’t want us to access it either.  Whose side are they on – the terrorists?  Hmmm….

Update: the US Geological Service report referenced above refers to 3.65 billion barrels of recoverable oil —not 503 billion…

Republican senator George LeMieux of Florida was appointed to fill the unexpired term of Mel Martinez, who resigned. His analysis shows that ALL WE HAVE TO DO TO BALANCE THE BUDGET is go back to 2007 spending levels!  It’s a no-brainer!  But not for idiots who buy votes for a living.

If government spending were reduced to its 2007 level, we’d have a balanced budget (with a $163 billion surplus). Returning to the 2008 level of spending, the budget would be balanced in 2014 (a $133 billion surplus). And in both cases, that’s while keeping the Bush tax cuts across the board and indexing the loathed alternative minimum tax for inflation.

“Could we live with what we did in 2007?” LeMieux asks—the “we” a collective reference to Congress, the federal government, and the country. He thinks so. Because of the recession, “most Americans are living with less than they had in 2007.”

Trillion dollar deficits or a balanced budget?  Ask your president why…

A 1934 Chicago Tribune cartoon…From the looks of Obama’s new budget, the plan to take over the United States hasn’t changed:

Simon Jonson has suggested that (ultra liberal inflationist and debt multiplier) Paul Krugman be made Fed Chairman – instead of the bankster Bernanke.  Bernanke definitely needs to go …but to replace him with Krugman?  Simon Johnson has gone nuts and his sidekick Kwak has such a liberal political bias that it gets in the way of economic common sense.  Even Krugman says it’s a crazy idea. The guy just fell several notches in credibility advocating that sort of dribble…

TPC has a good post from Comstock, as summarized below:

So let’s sum this up.  Even in this big “recovery” that is being spun so heavily on financial TV, employment is still down 5.2%, retail spending 8.4%, new single-family home sales 73.3%, core new durable goods orders 19.6% and industrial production 11.5%.  Since the numbers have moved up slightly we suppose that by definition it’s technically a “recovery” rather than a recession, but it does seem like a distinction without a difference.  And remember this is all we’ve gotten from the stimulus plans, the first-time home-buyer credit, cash for clunkers, the foreclosure moratoriums, zero interest rates, unprecedented quantitative easing, mortgage-backed security purchases, Treasury bond purchases, virtual government takeover of the housing market  massive aid to the GSEs and record deficits.  As we have previously pointed out all we have done is shift private debt burdens to the Federal government.  With all that, it is still doubtful that the economy can stand on its own once these artificial supports are removed.  Nevertheless the debts will remain, eventually to be resolved either by future inflation or default.

The last sentence is intriguing… When an obligor’s income (ability to repay) goes up as a result of newly printed money making its way to them, then monetary inflation can make that obligor’s debt easier to be paid back.  But the newly printed money MUST make its way to the obligors.  Suppose the new money goes to the stock or commodities markets to bid those prices up, but the obligors don’t own any of those types of assets – rather they own real estate (i.e. houses).  Then the obligors are no better off despite the inflation.  This is the case for the average consumer.  On the other hand, the banksters benefit handsomely from the government inflation handout.  They will be able to easily pay off their debts…once they sell off their stock and commodity assets…  The one thing that remains to be seen is what that liquidation by the banks will do to stock and commodity prices.

If you are underwater on your home loan and can’t afford to make the mortgage payment, give the TBTFs the keys rather than “cooperate” with them. You are better off AND the TBTFs are then forced to write down the value of your mortgage on their asset list.  This helps the country, in the long run.   As Denninger argues, while commenting on this NYT piece,  the current extend and pretend policy is designed to hide the TBTFs financial problems -NOT TO HELP YOU!

This is the reason for “HAMP” and all of the other silliness.  It is not to “protect” homeowners, it is to prevent banks from having to recognize punishing losses that, in point of fact, they should have to recognize due to their own idiotic lending practices.

Treasury knows this – that their entire “TARP” recapitalization and “stress test” game was nothing other than a sham intended to pump confidence so that these institutions could issue stock into the market and try to “rebuild” their balance sheets.

If this didn’t actually hurt the public I wouldn’t care.  But it does severely damage the public in multiple ways, specifically:

• These “modification” programs in the general sense do not and cannot lead to sustainable mortgages for the vast majority of homes at risk.  The reason for this is simply that the person who bought the house did so at a radical premium to what they could actually afford.  That “premium” was there as a consequence of intentional speculative activity and outright fraud in underwriting that pumped “home values” – premium that has now disappeared and cannot come back by anything short of more fraud!  Therefore these “homeowners” cannot be “saved” – any change that simply reduces payments but doesn’t get rid of the negative equity problem only extends and increases the damage ultimately done.
• A huge percentage of the people trapped in these loans are cajoled or outright threatened into doing things that are severely against their own interest.  I hear daily of people who have raided 401ks and IRAs to try to remain in their homes and make these “trial payments” or participate in other similar schemes.  Retirement accounts are privileged in a bankruptcy and cannot be taken; it is essentially NEVER the correct thing to do to raid such an account to try to prevent a foreclosure or bankruptcy filing! This sort of underhanded “suggestion” occurs all the time and in my opinion constitutes raw predatory conduct for which there should be felony legal sanction – but of course there isn’t.
• The artificial propping up of home prices severely damages those Americans who would like to buy a house but cannot afford one at the present price. If you do not own a car, you obviously want prices on cars to be low, not high.  The same applies if you don’t currently own a house – you want prices low, not high.  The only people who benefit from prices that are pumped up out of whack with fundamental values are those who lent money at bubble prices and will lose that money if prices contract, along with those who build more houses at bubble prices and thus skim off unreasonably large “profits.”

The power is still with the people, we just have to wake up and do the right thing as individuals for ourselves.  The right thing is to take full advantage of the law of the land and to ignore pressure and threats from the TBTFs that your credit will be damaged if you don’t work with them.  The truth is this: YOUR CREDIT IS ALREADY DAMAGED AND IT’S TIME TO BEGIN THE REPAIR PROCESS!  Get yourself back on track, forget about government sponsored loan modification farces.  Jacking around with the TBTFs only postpones the inevitable – for you and for them…

Denninger is again calling for a boycott of the big banks.  We at Swamp Report support this 100%.  The TBTF’s will not be TBTF if we move our money out of them.  We however believe the boycott should be extended to at least the top 10 banks, not just the top 4.   Do it today!

This is a call for a boycott.

A call to break these institutions by destroying their deposit base and “net interest margin”, one consumer at a time, as a protest against the outrageous actions these firms have taken in terms of risk and their shifting of the costs of that risk, which should have resulted in their failure and closure by The FDIC and OCC, onto the backs of their customers via outrageous fees, interest rates and costs, along with the direct subsidy being paid by all taxpayers generally.

Now The Huffington Post has picked it up and suddenly there’s a Facebook group for it too.

Huffpo said:

The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it’s meant to be. It’s neither Left nor Right — it’s populism at its best. Consider it a withdrawal tax on the big banks for the negative service they provide by consistently ignoring the public interest. It’s time for Americans to move their money out of these reckless behemoths. And you don’t have to worry, there is zero risk: deposit insurance is just as good at small banks — and unlike the big banks they don’t provide the toxic dividend of derivatives trading in a heads-they-win, tails-we-lose fashion.

Treasury secretary Timid Tim Geithner has predicted there will be no “second wave” financial crisis to follow the crisis of last year.

“We are not going to have a second wave of financial crisis,” Geithner said in an interview with National Public Radio. “We cannot afford to let the country live again with a risk that we are going to have another series of events like we had last year. That is not something that is acceptable.”

With characteristic audacity of the Obamunists, he says:

“We will do what is necessary to prevent that and that is completely within our capacity to prevent…” .

Well, with the prediction track record of the government in anticipating and predicting such events, if we believe the exact opposite of whatever the administration says we will be better off…

Tech Ticker is very cynical on the Obama Administration.  So too is the American public – as evidenced by the recent poll numbers.  The excuse to spend until the world ends was that we need to avoid the end of the world.  So now we have a choice: end of the world? or…end of the world?