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Triple Crunch Log                                                                                                            

Wall Street. …Under the Dodd-Frank financial reform act, the Fed on Wednesday detailed more than 21,000 transactions with banks carried out through half a dozen special financing programmes starting in 2007. They include the Primary Dealer Credit Facility (PDCF) for overnight funding of investment banks and the Term Auction Facility (TAF) for one- to three-month loans. Barclays was the biggest cumulative borrower from TAF. The UK bank, which bought the US operations of Lehman Brothers out of bankruptcy in September 2008, borrowed a cumulative $232bn from the TAF through various subsidiaries.”1098

BarCap to cut hundreds of jobs as revenues fall and headhunters warn of “a looming bloodbath.” FT: “The redundancies, which will affect front-office bankers and traders as well as support staff, are on top of the 300 staff the bank let go in August after a disappointing second quarter.Clients’ lack of dealmaking and low volumes of sales and trading activity amid volatile markets have continued to hurt global investment banks in the latter part of the year, with most analysts’ projecting fee pools to be down significantly on 2009. … The bank, which acquired the US operations of Lehman Brothers in September 2008, now boasts a total headcount of around 25,000. Nearly 4,000 employees have been added over the past 18 months, may of whom were hired to build out of BarCap’s equities and advisory businesses in Europe and Asia. … headhunters have warned of a looming bloodbath across the City of London and Wall Street as investment banks that bet on a strong recovery now look to slash costs. The cuts at BarCap also come just weeks before the industry’s annual bonus round, which has already inflamed tensions with the UK government. While BarCap has already set aside about £4.3bn to pay staff so far this year, bonuses are expected to be materially down on 2009.”1099

2.12.10.Cancun climate change summit: 2010 was hottest year on record. Telegraph: “It might be hard to believe with the snow falling outside but 2010 was globally the hottest year on record, according to the Met Office 0.94F (0.52C) warmer than the 30 year average of 57.2F (14C). The national weather service said it was equal with 1998, when an El Nino in the Pacific made the world warmer. This time the weather pattern in the southern oceans has actually cooled the world, meaning the high temperatures are more likely than ever to be as a result of man made global warming. The cooling pattern known as La Nina will increase into next year making it slightly cooler than recent years.1100

US rethink on offshore drilling angers oil industry. FT: “Oil and gas drilling in Arctic waters off Alaska faces further delays, while areas in the eastern Gulf of Mexico and off the US southern Atlantic coast will remain off-limits, the government said on Thursday, sparking criticism from industry groups and Republicans.”1101

Team France in disarray on nuclear, says the Economist. Last December Abu Dhabi plumped for cheaper South Korean models over French EPRs. China has agreed to buy two EPRs, but at the same time has ordered four comparable AP1000 reactors offered by Westinghouse Electric, an American rival owned by Toshiba of Japan. India is discussing a deal for two French-built EPRs, but many customers in poor or middle-income countries do not think that a little extra safety is worth the hefty extra cost. It is rare for a plane to crash into a nuclear power plant. In June a government-sponsored report prompted the view that Areva, which is largely state-owned, needs about €2 billion more capital to stay in the game.” And so on.1102

NY shale gas moratorium may turn out to be a win-win. FT: “New York State’s decision this week to impose a moratorium on new drilling permits for shale gas wells until May 15, 2011, comes at a good time for the industry. The point of the moratorium is to give the state more time to investigate the environmental impact of the hydraulic fracturing and horizontal drilling used to extract the gas from tight rock. Given that this probe must be done anyway - the environmentalist calls have grown too loud- there is no time like the present. USgas process are so low that many drillers are putting down their rigs or selling thei acreage to cash-rich, state-owned oil companies or international oil companies, which can afford to wait for the rebound in prices.”1103

Rules on gas “fracking” may be tightened by federal government as well as states. FT: “Yesterday’s decision by the Obama administration to put a moratorium on drillingin the eastern Gulf of Mexico further intensifies the current debate about hydraulic fracturing, the controversial process by which much of the unconventional gas is being exploited in the US. The process has been at the centre of the most recent argument between the oil and gas industry and environmentalists since Gasland was released earlier this year, highlighting the effect of some of the chemicals used in extraction. But the argument has gathered pace in the last few days, not least because of the announcement by Ken Salazar that he would consider tightening up rules  so that companies have to disclose what chemicals are being used to extract the gas.” … On Monday night the New York State Assembly passed a six-month moratorium on fracking throughout the state, aimed particularly at the Marcellus field in the north.Locals agree that the bill was largely symbolic, as the state’s environmental conservation department is already reviewing the impact of drilling in the Marcellus field. But the symbolism is significant - policymakers were sending a message to the oil and gas industry about their intentions.”1104

Nigeria’s anti-corruption agency plans to bring charges against Dick Cheney in connection with a $180m graft case involving a former subsidiary of Halliburton, the US oil services group that the former US vice-president once headed. The threat of charges against Mr Cheney follows the detention for questioning last week of 10 Halliburton staff by Nigeria’s Economic and Financial Crimes Commission. The Houston-based company’s country chief was also summoned. Last year Halliburton and KBR, the former unit from which it split in 2007, paid a record $579m fine after pleading guilty to charges that KBR had spent $180m in bribes between 1994 and 2004 to win contracts.1105

3.12.10. Cancún climate change conference: post-Kyoto a disaster, but prospects for other issues. Guardian: “EMISSIONS. Plan: To hold emissions to a maximum temperature rise of 2C. The prize: To prevent runaway global warming. Progress: Little. But many rich countries only interested in implementing unambitious Copenhagen accord. Setbacks: Pledges made so far by countries only cover 60% of what science says is needed to hold temperatures to 2C increase. Outlook: Bleak. Hard to see how big emitters like the US will compromise to greater cuts.

FORESTS: Plan: Reducing emissions from deforestation and degradation (Redd).To set up an international forest and land use agreement which will allow countries to offset carbon emissions by protecting forests – and locking away emissions – in developing countries. The prize: Possible $30bn a year to go to developing countries to protect and restore forests. Progress: Little. Informal discussions taking place but Saudi Arabia is

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