Billionaire News Watch

Saturday, June 12, 2004

Today the New York Times ran a front page story on the mysterious and inexplicable discrepancy between oil companies’ production and their proven reserves. In recent years, production has begun to fall even as "proven reserves" increase. While this may be puzzling to the New York Times and to middle class investors and consumers, to billionaires it’s as easy to read as a roadmap to MoneyTown.

There are two kinds of money to be made in the oil business, money from selling oil, and money from selling stock in the oil company. The price of oil is determined by supply and demand, and the price of the stock is determined by the company's proven reserves. So cutting production keeps gas prices high and overstating reserves keeps stock prices (and executives’ stock options) high. The beauty of our system is that it’s the oil companies themselves who are responsible for calculating and stating their proven reserves. It should be noted that although there is NO AUDITING OF THIS CALCULATION the SEC does have "rules" requiring these calculations to be "conservative." That’s the same SEC that oversaw the success of Enron and Worldcom.

In January, the oil giant Royal Dutch Shell was caught overstating its proven reserves by 22 per cent. A scandal ensued surrounding its chairman Sir Phillip Watts, resulting in his disgraced removal from office. The exact same practice that resulted in a legal and economic firestorm in Europe has been reported as an "enigma" here in America.

Sure, high gas prices and inflated reserve estimates are great for shareholder value and the companies’ bottom lines. But these figures do much more than that. They help remind Americans that the earth has an inexhaustible supply of oil. They help keep SUV’s rolling, suburbs sprawling, and the American people from ever awakening from the American Dream.

I suppose our sunny report on Halliburton in Iraq has jinxed us, friends: the company is now being investigated by the Securities and Exchange Commission for allegedly bribing Nigerian officials to secure a $4 billion natural gas contract.

In its typically hurtful, anti-Billionaire rhetoric, the SEC calls the alleged $180 million bribe a potential violation of the "Foreign Corrupt Practices Act." $180 million in bribe money for a $4 billion contract? Sounds like smart business, not corrupt practice!

We can only hope the SEC will do the sensible, honorable thing, and take a fat check in return for dropping the investigation. Hopefully Billionaires across America will rise to the occasion.

He's been shy about it, but we knew it all along: A recent report in TIME magazine suggests that Dick Cheney's office personally engineered a multibillion-dollar no-bid Iraq contract for his alma mater Halliburton. The new evidence comes from a leaked Pentagon memo.

Of course, we Billionaires already affectionately refer to the war in Iraq as "the Halliburton Project." Between illegal kickbacks, gross overcharges, juicy no-bid contracts, and cost-cutting measures like skimping on meal service sanitation, Halliburton has really made a killing in Iraq (no pun intended)!

As long as Bush and Cheney remain at the helm, we Billionaires look forward to more lucrative wars in the years ahead!

Good news for Billionaires in the power business (and aren't we all?): A new study, conducted by the EPA's air pollution consultants, has found that Bush’s cleverly named “Clear Skies Act� is really a sweetheart deal for power companies! The study found that Bush's policies protect our power plants' right to pollute better than existing clean air laws or two competing legislative proposals.

According to the report, simply enforcing the existing Clean Air Act (which our friend W. has graciously avoided doing) would save 4,000 lives every year compared with Bush’s environmental plan.

Some say you can’t put a price on a human life, but of course, we Billionaires say pshaw to that! Assuming most of the deceased are working class folk who can’t afford to move to a nicer neighborhood, each life lost to factory emissions is probably worth an annual salary of around $30,000. Multiply that by 4,000 and you get $120 million: a pittance compared to power company profits nationwide! While it's certainly a shame that so many able-bodied workers are facing an untimely demise, it's nice to have a president who puts simple economics over sentimentality.

Don’t even get us started on John Kerry, the Uncle Tom of billionaires, who co-sponsored a resolution that could save 100,000 lives by the year 2020. When is he going to learn that corporations, not people, elect the president in this country?

The United Nations Security Council has signaled its unconditional surrender to the American and British authorities by unanimously adopting their plan to transfer sovereignty. The 15-0 vote in favor of the resolution has finally put to rest any doubts as to who signs the permission slips for our great nation’s military adventures.

It’s hard to believe that just over a year ago the UN had the audacity to question the legitimacy of the US invasion. With compelling evidence against the existence of WMD, and overwhelming public opinion opposing war, the UN withheld its support. The Security Council’s unanimous vote proves once again that mere facts, and the will of the majority are no match for our military strength and the will of our leader, and have no place in a democracy.

Today, even such vocal critics as France and Germany have fallen into line behind our president, proving that preemptive war can and does get results. The UN, once our enemy, has been defeated, and again become a rubber stamp of approval for America, and billionaires everywhere.

The Federal Reserve has finally spoken up in defense of banks’ rights, silencing a growing chorus of critics who objected to the now-widespread practice of offering "bounce protection" or "overdraft privilege" to low-income customers.

The way this "service" works is simple. Banks place ATMs in bodegas and supermarkets in impoverished areas. Customers can withdraw cash without the hassle of being informed that they are overdrawing their accounts, and the banks collect a hefty overdraft fee. It’s a win-win situation.

Despite the obvious advantages of this system, some have found reason to object. Critics claim that "overdraft privilege" is actually a credit line and therefore subject to those job-killing federal regulations known as usury laws. If the "service" were considered a loan, then a $100.00 overdraft, outstanding for two weeks and subject to a $20.00 fee, would be the equivalent of a loan at 520% annual interest. Talk about smart business!

Thankfully, the Federal Reserve has taken a principled stand to let banks call these loans "services," and continue reaping their juicy profits. Last year, a single bank, Washington Mutual, collected over a billion dollars in overdraft fees. We look forward to setting new records in the year ahead!

These are sad days, my friends. Not only is the air quality in New York making me wish for my hunting lodge, but Alan Greenspan is raising the interest rates. Bad for lenders, good for borrowers - and bad for us, as the jump in consumer prices means that we might have to start paying the peons more. Thank God the Gipper ain't here to see this. Trickle-down economics never work the way you'd think...

To cheer you up, here's some good ol' bubble-economy nostalgia. Enjoy this list of Forbes' Top 10 IPOs of the Decade!

Good news: New trends in college enrollment suggest there is more room at the nation’s finest universities – for the children of billionaires!

According to a recent report, minority enrollment is down at the University of California at Berkeley and elsewhere, due in part to the rising costs of education, along with changing admissions and recruitment policies.

Of course, we Billionaires cherish minorities, such as whale blubber magnates and non-indicted Enron executives, as much as the next fellow. But over the past half-century or so, cash-deficient families of all stripes have been flooding our elite educational institutions with their unwealthy scions. Without cranking out scads of billionaire trust-fund alumni, how will our most respected universities finance their exclusive social clubs, polo teams, and pricey guest lectures by fellow Billionaires?

Fortunately, third-generation Yalie George W. Bush shares our concern. Although college tuitions have risen 35 percent since he took office, Bush has frozen Pell Grant giveaways to non-billionaire students for the first three consecutive years of his tenure. Don’t be alarmed by his recently proposed "increases" – they affect less than 1 percent of all Pell Grant recipients. (Have your accountant do the math!) Bush has also proposed putting time limits on Pell Grants, ensuring that dilettantish working parents don’t waste public money inching through their educations.

Bush has also wisely encouraged our universities to eliminate preferential treatment in college admissions based on non-Billionaire criteria. As the president knows from personal experience, only the children of wealthy alumni deserve a leg up in the application process. Thanks to his visionary policies, America’s higher education system will soon be returned to the children of the upper classes, to whom it rightfully belongs. And for a Socialist breeding ground like Berkeley, that won’t come a moment too soon! (Do they even have a polo team?)

In a boom to billionaires everywhere, all .0001% of Americans anyway, the Bush Administration has been spending as much on nuclear proliferation as the late Ronald Reagan did during the height of the Cold War. (In a related story, MGM Studios announced plans to remake their 1962 classic shorts, "Hurry Children, Get Under Your Desks!" and "That's Not Snow, it's Nuclear Winter!" slated for a 2005 release.)

At the annual “Support Your Local War Machine� Dinner held on May 27th in Washington D.C., billionaires gathered to celebrate the news that nuclear spending was again reaching all time highs.

As Fred Kaplan writes for Slate.com, according to a report quietly released in April by the Natural Resources Defense Council “the Department of Energy is spending an astonishing $6.5 billion on nuclear weapons this year, and President Bush is requesting $6.8 billion more for next year and a total of $30 billion over the following four years.� Or, as one billionaire who asked not to be identified said at the dinner, “So the Soviet Union is no longer a threat? Someone has to profit from all that enriched uranium lying around.�

A young man standing nearby, wearing what appeared to be a thrift store tuxedo and whose lapel was suspiciously void of the member’s only 'Billionaire’s World Dominion Pin,' stepped forward and asked the billionaire if it were wise to be spending so much money on weapons designed to fight a non-existent enemy. The billionaire huffed and hawed and replied, “Our strategy is long term, and we are always developing new markets for our products. In the 1990's, when Clinton's peace initiatives really hamstrung our profit margins, we learned that it's bad business to assume the U.S. can continually provide the kind of market growth needed to consistently raise our bottom line through 2015.�

The curious questioner countered that spending hundreds of billions of dollars on next-generation nuclear weapons when the old weapons were never and should never have been used didn’t seem like a good use of taxpayer dollars. Again the Billionaire scoffed,

“Hiroshima and Nagasaki unfairly stigmatized the old nukes. That’s why we are developing the RNEP’s, [Robust Nuclear Earth-Penetrator] bunker busting nukes that burrow deep into the earth before detonating. Don’t you worry about wasting taxpayer money, these nukes will be used.�

When asked if it were responsible to fuel another arms race when only a few years ago such an event seemed relegated to the dust bin of history , the billionaire countered, “In a marathon, Nike might sponsor the best runners in the field, but it makes good business sense to make running shoes available to everyone. Competition is the life blood of the free market. It paves the way for a very few of us to get very rich, and you’d have to be a communist if you didn’t approve of the very few getting very rich.�