The Oil Drum: Europe

Stuart McCarthy from ASPO Australia has done himself proud with a solid submission to Infrastructure Australia.

Download the full report: Peak Oil and Australia's National Infrastructure: Submission to Infrastructure Australia. The Executive Summary is reprinted below.

This is a guest post from Garry Glazebrook of UTS (the University of Technology, Sydney).

After listening to Al Gore, Nicholas Stern, Ross Garnaut and Tim Flannery, it is now obvious to most thinking people that we have to address climate change, and soon. It is becoming equally clear that the fall in oil prices over the last few months is only a temporary respite, brought on by a faltering world economy, and that oil prices will likely surge again as soon as the economy recovers. The implication is a need for massive investment in renewable energy, energy efficiency and sustainable transport. But how to fund such investment without sacrificing our economy, jobs or lifestyles?

If you want your say on the kind of major infrastructure projects we need to build ourselves out of (rather than into) a post peak oil mess, here is your chance:

Federal Infrastructure and Transport Minister Anthony Albanese and Infrastructure Australia Chair Sir Rod Eddington have urged all Australians to be part of the Rudd Labor Government's nation-building agenda.

Until 15 October, any member of the public and business community can submit their project ideas to Infrastructure Australia for evaluation and possible inclusion on the National Infrastructure Priority List - the first of which will be handed to the Council of Australian Governments in March 2009.

[UPDATE] JP Morgan agrees to buy Bear Stearns for $2 a share (Stock closed Friday at $30).
Also, Fed cuts rates (on Sunday) from 3.5% to 3.25%.

The WSJ has a decent article describing the current financial crisis and pulling no punches:

Debt Reckoning: U.S. Receives a Margin Call

The U.S. is at the receiving end of a massive margin call: Across the economy, wary lenders are demanding that borrowers put up more collateral or sell assets to reduce debts.

The unfolding financial crisis -- one that began with bad bets on securities backed by subprime mortgages, then sparked a tightening of credit between big banks -- appears to be broadening further. For years, the U.S. economy has been borrowing from cash-rich lenders from Asia to the Middle East. American firms and households have enjoyed readily available credit at easy terms, even for risky bets. No longer.

The frame is, erm, interesting. ("It's not because we need to destroy demand, it's because we need to pay for the infrastructure to keep demand increasing.") But hey, it's a start. (Here's a link to the story.)

WASHINGTON (AP) - Federal gasoline taxes should be raised up to 40 cents per gallon over five years, a special commission urged Tuesday in calling for drastic changes to fix aging bridges and roads and reduce traffic deaths.

The two-year study by the National Surface Transportation Policy and Revenue Study Commission is the first to recommend broad changes after the devastating bridge collapse in Minneapolis last August. It warns that urgent action is needed to avoid future disasters.

Here's a link to the National Surface Transportation Policy and Revenue Study Commission, which has links to the entire report and some other interesting materials.

Will the Fed cut interest rates to alleviate the developing credit crunch, and will it have the desired effect if they do? Can lowering the cost of credit overcome risk aversion and the fear of cascading default? If not then the Fed will not be able to prevent the contraction of the money supply and the spread of contagion amid a sea of margin calls.

In Canada, oil sands fever continues unabated and a drilling frenzy may be shaping up in the Arctic. One political leader urges the defence of sovereignty in the Arctic, while another holds talks on North American Union well away from the public eye. In Ontario, businesses are paid not to consume power.

On the climate front, northern infrastructure faces a serious challenge as melting permafrost undermines it's foundations, while Australia experiences a 1000 year drought.

Finally, we remember that 62 years ago, the world was waking up to the beginning of the nuclear weapons age.

Mortgage Maze May Increase Foreclosures

And the very innovation that made mortgages so easily available — an assembly line process known on Wall Street as securitization — is creating an obstacle for troubled borrowers. As they try to restructure their loans, they are often thwarted, lawyers say, by strict protections put in place for investors who bought the mortgage pools.

This impasse could exacerbate the housing slump, pushing more homeowners into foreclosure. That would lead to a bigger glut of properties for sale, depressing home prices further.

“Securitization led to this explosion of bad loans, and now it is harder to unwind and modify them even where it is in the best interests of both the borrower and the investors,” Kurt Eggert, an associate professor at the Chapman University School of Law in Orange, Calif., said in an interview. “The thing that caused the problem is making it harder to solve the problem.”

Creating difficulties is the complex design of mortgage securities.