I’ve been focused on the opportunities in the next “bubble” forming, which is in the bond market. With the federal funds rate at historical lows and investors flocking toward short-term money instruments, the bubble is forming as a flight to safety has, once again, drawn too much attention to an investment philosophy. Remember the tech and housing bubbles, and in the next few years you will live with the effects of the bond bubble.

First, what is the federal funds rate and why does it move in different directions?  In the United States, the federal funds rate is the interest rate which private depository institutions (mostly banks) lend balances at the Federal Reserve to other depository institutions, usually overnight. It is the interest rate banks charge each other for loans.

The interest rate that the borrowing bank pays to the lending bank to borrow the funds is negotiated between the two banks, and the weighted average of this rate across all such transactions is the federal funds effective rate.

Why does it change? The Federal Reserve utilizes the Federal Funds Rate as a tool to increase or decrease the flow of funds within the economy. We’ll only focus on the Federal Funds Rate as there are other tools available to accomplish the same goals such as REPO or Reverse REPO transactions. The rate will decrease when the economy is declining or increase to control inflation when the economy is growing. Such movements could increase or decrease unemployment rates.  See charts below: 

Given the data above, why am I predicting a bond “bubble” forming and subsequently a substantial decline in these types of assets? What is the value of a bond bought at 1k paying a 3.5% coupon today if interest rates are increased and a bond is released the next day has 4% coupon? If you want to sell the bond paying 3.5%, then you would have to reduce the selling price until the bond pays an equivalent 4% coupon. How much you have to reduce the price is referred to as duration.

Duration is useful as a measure of the sensitivity of a bond’s market price to interest rate (i.e., yield) movements. It is approximately equal to the percentage change in price for a given change in yield. For example, for small interest rate changes, the duration is the approximate percentage by which the value of the bond will fall for a 1% per annum increase in market interest rate. So a 15-year bond with a duration of 7 would fall approximately 7% in value if the interest rate increased by 1% per annum.

Therefore, this is an easy exercise for us to apply to the current situation building and the opportunities that exist. Given the Federal Funds Rate is .25%, we can reasonable assume by an educated guess that sometime in the future the rates will increase to maybe 1.25%. Look at your bonds and bond funds, now do the math and calculate your loss by multiplying the duration of the fund by 1%. Don’t know the duration of your bond portfolio? Better call someone and have them calculate it for you.

It just came to me, the chart above would suggest the Federal Funds Rate historically averages may be 4%.

The American Economy had been prosperous during the 1920′s due in large part to the demise of Europe after WWI. It was a good time to be an American as we were supplying the world with essential goods. On the other hand, Europe was struggling with reconstruction, reparation payments and debt.

As America continued to grow into the mid twenties it was financing more and more of its expansion through the growth of debt. You know, steady growth is never enough. There must be more beyond what you’re making now. Let’s expand through debt. Well, economic cycles do happen from time to time and its does slow down. To make a long story short, the economy did slow and the debt was defaulted on by many Americans causing a “financial Meltdown” throughout the world. Sound familiar? By the way, it did cause high unemployment and deflation for a prolonged period of time in the 1930′s.

Of course, this lead to the stock market crash of 1929 from a value of 377 to 228 or 39.5 percent. The market than began a small comeback at the beginning of 1930 to 285 or an increase of 25%. After its short run, the average fell to 45.29 in early 1932. Yes, you would jump out of a window or become “Depressed”. UMMM, just wondering if I put the same numbers in now what would happen. Let’s see.

The DOW Average was at 14,093 in October of 2007 at the height of the housing boom. It then fell to 6,626 in March of 2009 representing a 52.9 percent decline. Then, for no apparent reason, speculation sets back into the market and it rises to 11,204 in April of 2010 for a record-breaking 69 percent increase! So those are the numbers and there not disputed. Let’s dig deeper.

The top on our recent rally was 11,204 which is 79% of the 14,093(2007) and 285 is 75% of the 377 reached in 1929. I’ll call it close enough for a similarity. What would 45.29 be in terms of today’s averages? Its 1832! I don’t want to think about that number too long. So, let’s move to the policies of the time.

President Herbert Hoover is a good person to start a discussion of parallel policies leading to such declines in financial systems. He spearheaded a campaign of home ownership in the 1920′s as the Secretary of Commerce through the development of the long-term home loan which most people use today. Obviously, the people weren’t ready for the program as too many people defaulted on the loans after a “Housing Boom!”.  

During his Presidency, he signed into legislation higher tariffs, a forced migration law sending Mexicans back to Mexico, laws promoting artificially high wages, started the Hoover Dam, increased corporate taxes and passed a bill to reduce foreclosures.  

We now occasionally read about higher tariffs to protect American businesses, foreclosure reduction laws, Migration of Mexicans (Arizona Law) and coming to a town near you soon, Public Works Projects, and increased minimum wages laws. Not too much in terms of similarities here! Of course, I’m being sarcastic!

Now President Roosevelt, he began by blaming the depression on bankers, financiers and self-interest basis of Capitalism. President Obama? I wonder if they save old speeches like old songs? He promoted price-fixing, minimum wage, isolationism, massive government hiring and regulation of Wall Street. Sound familiar! Couldn’t be the policies of Herbert Hoover promoting a “Housing Boom!” or anything along those lines of thought. No, it has to capitalism. Has Wall Street benefited from the regulatory laws passed back then? Not really, I can think of Michael Milken, Bernie Madoff and countless others. People still loss money and others make money.  

What about Europe? It was a much different Europe in the 1920′s with deflation and debt problems. LOL! Did I say different, I meant the same. Germany is the dominant economy in Europe. When there are issues in Germany its major issue. The Euro is a major issue which means Germany has a major issue. In the 1930′s, it was reparation payments forced on Germany for losing WWI which represented the major issue. Those reparation payments essentially lead to the rise of Adolf Hitler who promised to fix the problem. I guess so! 

The issue in the 1930′s was where would increased demand begin. At some point, demand has to create pressures for supply. There seems to be the same questions now.

Why do we continue to believe that history doesn’t repeat itself? If you believe Roosevelt saved us from the depression, then study the time period and you’ll find differences. First, the stock market never broke 200 and was valued at 150 on the eve of WWII (1938). Second, unemployment was 19% in 1938 versus 24.9% in 1933. If WWII doesn’t assist in the Economic Recovery, then the economy was going back into a Depression.

We’re moving along the same course now. Small business isn’t able to turn a profit and hire new employees which typically accounts for a large percentage of new hiring on a yearly basis. It’s referred to as aggressive growth companies. It’s the absent component of Socialism, Fascism, and Communism leading to stagnant growth within those systems.

We should try a different approach during this economic downturn. We should promote policies which give incentives to small aggressive growth companies. This could lead to pressures on demand and hence increased supply requirements creating employment which may lead to home and car purchases, wage pressures and ultimately sustained growth.

Follow Roosevelt and there may be the same fate. But don’t worry, history doesn’t repeat itself!!

1832  What a number? In 1832, President Andrew Jackson refused to fund the Second National Bank leading to the Panic of 1837. The result was a 5 year depression.

What a time to make money. I was riding in an elevator listening to a person discussing the explosive growth story. His wife had turned 10k into 150k in a month. This was one hell of a free lunch!

As a young person out of college I had no idea what was going on at the time. Well, there was one phrase that did make sense “irrational exuberance”. Party over!

I would have never imagined cash, cd’s and short-term duration bonds as appealing. I’ve always been a “Fast Eddie” fan from the movie The Hustler. Just fast and easy! There must be some opportunity where the irrational has created an arbitrage situation. Something to short!

Not so sure! Maybe inflation could create a great opportunity in the shorting of bonds with high durations. Then again, deflation is ever-present giving the short too much risk. So much for that arbitrage situation.

How about equities? Short the market? Its down 1000 points from its last peak. And, the upside doesn’t seem so certain anymore either. My feeling is much more downside coming. Have the guts to play the downside? Not me but its the smart guess.

Either way its speculation because valuations are unpredictable due to too many uncertainties in the world economy.

Where is sustained growth coming from in the near future. I’ll be happy to become Fast Eddie again when I can answer that question. Until then I’m heading for the exit and into safety.

Shame on me for turning my back to speculation and taking the short-term safety and not finding opportunity in this economic climate. Then again, I may be saving you on the losses which could be substantial! Opportunity in safety. I can’t believe its come to this point.

Did China really just start its housing burst? Wow! This is really bad. Germany in political turmoil? France can’t remain in AAA credit standing? Spain needs a major loan? Suddenly safety seems smart.

The velocity of money (also called velocity of circulation) is the average frequency with which a unit of money is spent in a specific period of time. Velocity associates the amount of economic activity associated with a given money supply. When the period is understood, the velocity may be present as a pure number; otherwise it should be given as a pure number over time. In the equation of exchange, velocity of money is one of the variables claimed to determine inflation.

If, for example, in a very small economy, a farmer and a mechanic, with just $50 between them, buy goods and services from each other in just three transactions over the course of a year

• Mechanic buys $40 of corn from farmer.
• Farmer spends $50 on tractor repair from mechanic.
• Mechanic spends $10 on barn cats from farmer

Then $100 changed hands in course of a year, even though there is only $50 in this little economy. That $100 level is possible because each dollar was spent an average of twice a year, which is to say that the velocity was 2 / yr.

Secondly, why write a blog about the velocity of money? This is an attempt to explain why there is such panic in the financial system and how it may impact your life. Unfortunately, economics has been a large part of our lives for many years now.

Since I graduated from high school in 1987, we’ve experienced a recession in the early 90′s after the Gulf war ended. A spectacular rise in technology stocks in the late 90′s followed by a plunge in technology value leading to another recession in the early 2000′s. Then, 9/11 when 3 million jobs were lost in the 9 months following this tragic event. This pushed us into another recession resulting in the Federal Reserve lowering borrowing rates to 40 year lows creating housing bubble and finally a complete meltdown of the financial system.

Most people want to get up in the morning, shower, coffee, go to work and run the kids around at night. They don’t want to worry about unemployment, rising debt and losing their house. Economics is not about feelings. In economics this person is referred to as a “unit” and not a life. His or her spending is referred to as “consumption” and the rate of that consumption is “velocity of money”.  The happiness you feel or dissatisfaction you may experience is called a “utile” or “utility of satisfaction” which is an attempt to measure his or her confidence in the economy. Will you continue to spend or are you going to increase your savings? Do you think you’ll have a job next month? Going to buy a car or house? GIVE ME A NUMBER……I want to know is your ”utility of satisfaction”!!! Please!! I want to know the “velocity of money” over the next six months. If I can predict it, then I can make a fortune in the market.

If we can make a fortune then let’s give it a try! We’ll attempt to make our fortune today. Or, better yet, we’ll have some “educated guess” as to the direction we think it should go in the near future. 

What appears to be a relatively slow velocity of money period within our economy since the financial meltdown in 2008 may not improve anytime soon? First, unemployment is high which doesn’t promote “consumption” resulting in a slower velocity of money. Secondly, the banking system isn’t lending money because they are afraid they won’t get paid back or there isn’t enough ROI to support the risk. SLOWER Velocity of money. Third, the government is going to have to tighten an out of control liquidity problem as result of the housing collapse. SLOWER Velocity of money. Lastly, housing is a big part of the market place representing the largest purchase most people will make in a lifetime and it’s not getting better. Not to the level it needs to be at this time to pull us out of a possible deflationary period. Isn’t deflation related to a slow measure of the velocity of money? Chicken before the egg or the other way around, their related or married one way or the other.  

Seems easy when you look at the illustration above, the velocity of money is 2/y which represented $200 of goods purchased in year XXXX. The mechanic goes on unemployment and only spends 1/2 of what he spent when he was employed. The mechanic buys $20 worth of corn, the farmer spends maybe $30 on essential goods and there are no barn cats purchased. This has slowed the velocity of money to a crawl at .75/y which is an estimate. We better find a way to find the mechanic a job!

Go the other way and it’s a worst case scenario. If the velocity of money becomes 4/y, then you’ve created a cancer to any economic system which is inflation. You know, this thing called the velocity of money is an important thing when you think about it. Its effects your way of life in every way. This is why I’m such a critic of Alan Greenspan as this was his responsibility of the majority of my adult life. He did a poor job of managing it!

Getting back to our prediction, we were on our way to making plenty of money based our prediction regarding the velocity of money. Given everything we’ve discussed, the velocity of money is slow and will remain this way for the near term. In addition, I’m watching this situation in Europe very closely. If it turns worse or collapses, then we’re in for one hell of a ride in the wrong direction. Deflation is a very real possibility.

Now we’re certain of the direction things should go, we should be in a great position to make money! Right! It’s not that easy but I did give you something to think about.

I have to admit; I do watch Cramer on CNBC and listen to his knowledgeable insight with respect to markets. He’s made huge money in his day. I read his take on the situation in Europe and he feels it is either going to blow up in the next few days or go away. Collapse! WOW! Is it really on the brink of collapse??  

I think the Germans have to make a decision soon. Euro or no Euro?  

The value of German exports to the world slowed by 25% to an estimated US$1.1 trillion in 2009 from $1.5 trillion in 2008. According the CIA World Factbook, top trade customers for Germany’s exports are France (10.2% of total German exports), Netherlands (6.7%), United States (6.7%), United Kingdom (6.6%), Italy (6.3%), Austria (6%), China (4.5%) and Switzerland (4.4%). 

Germany imported $931.3 billion worth of products from other countries during 2009, 24.4% less than the $1.2 trillion in imported items during 2008. Major trade partners that supply Germany with imported products are Netherlands (8.5% of total German imports), China (8.2%), France (8.2%), Italy (5.9%), United States (5.9%), United Kingdom (4.9%), Austria (4.3%) and Belgium (4.3%). 

Given this information, your major trading partner France has the 9th highest debt burden relative to GDP in the world and faced with the prospect of bailing out Italy, Spain and Greece. So don’t look to France for help to grow your exports. A weak Euro would boost exports to the U.S. given the unemployment rate in the U.S. reduces considerably. So don’t look to the U.S. to grow your exports as unemployment will continue to be an issue. The other big player, China, is a possibility as the Yuan is going to rise against the Euro and make German exports cheaper. Could happen only if the Chinese don’t mind decreasing demand for their products in Europe. By the way, Europe accounts for 20% of Chinese exports on an annual basis. So, I’m not sure this will happen either. 

Having driven during the winter weather for most of my life, I can assure you it’s not wise to go too fast on a freezing day. Sometimes it’s smart not to slam on the breaks as you tend to lose control of the vehicle. Just let the car slow down by taking your foot off the gas pedal and look for a good place to slow or stop the car. Then, proceed with caution when entering the roadway again.  

Translating to economics, don’t try to cure debt too quickly as it leads to a lack of growth and savings. This may have to be generational financing and the entitlements grandfathered to cease at some age group. I’m sure the Chinese would finance a 30 to 40 year instrument to continue the growth of their products in Europe. It would bolster the Euro and thus reduce the value of a dollar allowing Chinese products to return to their usual cheap state.  Just a thought. 

Given the prospects of these radical concepts actually coming true, I’d have to side with Cramer and believe the end is coming soon or should be coming soon.  

Back to Timothy Geithner, Secretary of the Treasury, giving us a comfort regarding these debt issues by assuring us that Europe can handle the situation on their own. What if he said they can’t handle it? The markets would collapse around the world and give all Tea Party candidates validity. It would say socialist policies don’t work. 

This doesn’t look good to me. Make sure you have your seat belt fastened!! Impact is coming soon!!

First, Justin Yifu Lin stated a revalued renminbi would increase prices paid for Chinese products by importing countries namely the U.S… I guess you have to remain silent and just stare at the man as he states a fact which is covered in Econ 101 at most universities. If you don’t revalue, then I will! Most countries will tax through a tariff if you manipulate your currency at lower levels to promote unfair trade.   

He goes on to say, “because most of the products China exports to the United States are labor-intensive goods U.S. manufacturers stopped making years ago, the U.S. would only have two choices: buy the products from other countries or from the Chinese.”  How can we buy your products if we don’t have the jobs to pay for them? Brilliant concept: undervalue your currency; steal jobs from the U.S., then try to sell us your products! Amazing, why didn’t we think of that a long time ago. 

He argues, if China’s product increase in price then it will lead to inflationary presses reducing the growth of jobs. Actually, it would lead to competitive markets establishing equilibrium prices relative to supply and demand. We may actually be able to produce some of these labor intensive products he refers to in his speech. Currently, Chinese products own market share based on their artificially low prices as a result of an undervalued currency. 

The Chinese have huge reserves built up from these artificially low currency rates. What to do with those reserves? Are they promoting growth of markets around the world? Not really! The Chinese have been known for their questionable concepts in the past and implosions at times. It’s my position their poised for another implosion! 

Want to know where the jobs are to promote growth in the U.S.?  Your job is stuck in a Chinese bank! 

I have a solution; Hillary Clinton should land in China and “beg” them to continue to buy U.S. debt instruments! Why not, the Chinese where sleeping at the White House when her husband was in office. Took some political contributions Hillary? Oh what a tangled web we weave! 

For everyone who voted for this administration or the Clinton administration, you should take a long look at the situation in China and ask yourself who’s helping you find a job. President Obama can spend trillions and not get you a job. How can he get you a job? What will you build or sell? China is able to under bid you!

Who? What? Why? How? LOL! It’s the best joke I’ve heard all week. Who in their right mind would purchase a bond from a socialist economy with limited growth potential. What does this accomplish other than a temporary fix to a long-term problem. Why not change your system by reducing debt through conservative fiscal and monetary policies? How are they going to pay for these bonds? I know, they have future revenue streams from social programs providing sustained cash flows! LOL!

Anyways, I thought I would provide a few links for your reading pleasure:

http://sprint.mw.cnn.com/primary/_0oEpum-iyeSxTekaV

http://news.yahoo.com/s/ap/20100509/ap_on_bi_ge/us_greece_imf

http://www.cnbc.com/id/37051995

http://www.cnbc.com/id/37052269 - 600 Billion Euros!!!! From these growing economies? LOL

Call a Plumber as there is a leak in the European economy: DEBT! You know, where there is debt there is INFLATION! OH NO! Not that thing called inflation! Following WWI, Germany faced hyper-inflation caused by reparation payments they had to pay as a result of not winning WWI which is partially responsible for the depression. Wouldn’t want that to happen again. We’re in a real danger zone.

If they passed a bill to drastically reduce debt levels along with scaling back on social plans, then I’m a buyer! But, releasing debt instruments to place a band-aid on the problem doesn’t excite me at all. What makes more sense is to pass laws which enact similar programs as those destroying Europe. You know, health care bills which will create massive amounts of debt. Excited about those debt instruments (U.S. Treasuries)? Not me either!

Wrong policies at the wrong time by the wrong people! Thank goodness we didn’t give them the power in the 90′s to pass a health care package. WE STILL HAVE TIME TO REPEAL IT!!!!!!!!!!!

To all the liberal professors I had in college: your wrong! Take an accounting class before you formulate your economic views. Social programs are inefficient and expensive. No case study needed, just follow the reality show called Europe with its leading character Greece.

Greece is the beginning of the end of socialistic policies. A cancer in the economic system. Perhaps a little revolution every once in a while is good for a government if you believe in Thomas Jefferson.

We the people of the United States have been cheated out of a good education. Liberals with state pension funds and federal grant money have no understanding of building efficient growth models based on competitive incentive based methodologies.

Don’t expect this crisis to blow over quickly. There is plenty of change coming. Capitalism will make its comeback soon and the people of the world will benefit from it. However, it won’t be painless and its never easy to become responsible. The liberals need to go back to the chalkboard to design a new play as this one didn’t work.

Where does China play into this game? We know communism doesn’t work! How are they dealing with this issue. We’ll never really know due to their lack of “freedom of speech”! I’m waiting for them to come up for air. Manipulated or controlled markets don’t work. Their heading for trouble.

What about the good old U.S.A.? I would’ve said we’re in a good position to lead the world again but, we’ve passed these debt causing liberal policies of late! We’d better evaluate our decision and make an adjustment before we’re in the streets protesting.

Health care is a business that offers a service. It has to be run like a business with tough decisions made on a daily basis. Businesses have to compete for business. If there are inflationary pressures within an industry, then its most likely due to an inefficient market model. Social programs don’t promote competition and efficiency.

I just looked out of my office window to see the bulls run down the street. Capitalism is waiting to cross the street. And, socialism was hit by a car! Wish I knew the name of that political science professor who gave me an “F” on a 20 page research paper I wrote on privatization of public housing! Good idea!

My issue with the war on terror is not that we’re fighting the war but from their perspective why are they fighting. I can think of several great reasons but not any one particular point. I consider 9/11 an attack or a battle and our response a counter attack. Not a reason. It must be one hell of a reason they’ve been fighting so hard for such a long time now. In my lifetime they’ve held hostages, killed marines in Lebanon, fought each other at times and the last twenty years they’ve been directly fighting us. Basically, they’ve been fighting for my entire 41 years of existence. 

Is it religious? We have many religions in the United States. How about our way of life? Given we all wake up with a million dollars in our bank accounts and easy jobs would lead to a little jealousy. If it was true then I would understand. However most of us wake up and compete against anyone and everyone for the next success. What’s next? Freedom! For some odd reason certain societies don’t like freedom.  

The free exchange of expression, Rages to Riches, Perfectly Competitive Markets, and freedom of religion. Did I say religion? Can’t be religion then! There is freedom of religion in the United States. Which is why socialism is a greater threat? 

I continue to monitor the situation in Europe on a daily basis. Borrow, then borrow more and eventually you have none. Greece is no longer a functioning government and others are to follow. Socialism doesn’t work! 

Today, I read liberals are referred to as “progressive”. Absolutely, it’s going to require a progressive tax on all of us to fund their social programs. Then, we’ll have to borrow until we can’t borrow anymore. Countries going broke aren’t a good thing for “progressives”. Liberals tend to be passive when it comes to social unrest and revolutions. 

High debt levels lead to all kinds of bad things in an economy such as stagnate growth and high unemployment along with inflation. OH (Not IO Buckeye Fans) NO, inflation! People don’t like it when they can’t afford to live. These circumstances can result in a question of ideologies and ultimately wars are based on ideological differences. 

Socialism and terrorism are one in the same. Both achieve their goal when you are afraid. Are you afraid when you have a job and the bills are paid? If the suspected terrorist had a good job which provided for his family, then would he be in the middle of Times Square with a car bomb?  

Instead of passing legislation designed to control markets and produce substandard services, we should focus on spreading the ideology of free market enterprise to produce good jobs and better services around the world. I’m sure a person with a good life somewhere else won’t be at your back door with a bomb around his chest!

With other companies going out of business and others purchased by banks (forcefully by the government), a certain company had a chance to stand-alone or close to it as the “owner” of Wall Street. Instead, GREED couldn’t be helped. They chose to minimize the damage in the short run and comprise the future. The future is here! Time to give back those earnings and possibly future earnings from what would have been ”trusted clients”. 

Warren Buffett, a brilliant investor, is in denial about a mistake costing him and others billions. Not to mention, his assessment of the current economic conditions in the United States and the World. His assessment of the economy is that it’s “improving”. What does improving mean? Does this mean we’re in a period of sustained growth? On the upswing? Not sure this is true. Almost every number I read in the GDP report http://www.cnbc.com/id/36867898 contradicted this opinion.

Most of the larger companies are seeing growth in emerging markets. The United States is projected to have below average growth as compared to other economies. High Unemployment along with expected higher taxes, interest rates, and health care don’t bode well for the United States. To say “improving” is a contradiction to “Value Investing”.

I wonder if he would buy shares of the U.S. government given it was a public company. If not, then how is it improving? This isn’t a company with liquid cash, solid earnings, good management and cheap compared to other companies in its space. It’s a company with declining revenue, decreasing market share, increasing debt, and a growing payroll! Not to mention, highly inefficient with the services it offers.

Our President is expected to “Fly By” the oil spill in the gulf as it grows every hour and is now believed to be five times earlier estimates. The Coast Guard has been slow to act as they wanted BP to pick up the tab. The Department of Defense wasn’t notified of this exploding problem until a few days had passed. Of course this is all about money, which this government is a little short of, as we know. Nothing about the environment is taken into consideration until the money is settled! Slow on the Hurricane and slower on the Oil Spill – Outstanding!

My first thought about the Obama trip was the fact that it’s been a few days late as was President Bush during the Hurricane. Secondly, the inefficiency of the Department of Homeland Security, an agency of combined inefficient agencies, to act with the urgency to save the coast from massive damage lasting for years to come. Lastly, the unfair favorable treatment this administration receives after all of the blunders they continue to commit. I like politics in America because it’s good conversation but, it’s also become a circus with great acts and a negative balance sheet. 

“Hey, someone fell off the high wire and is bleeding to death”.

I know, let’s first find funding necessary to pay the cost then, find an agency to administer the first aid. Yes, of course, it wouldn’t produce the desired outcome of saving the person. This brings us to the first quote we should release, “No problem? We’ll cover the cost of the relatives or anyone else feeling pain from the loss!”

Not to worry! BP will cover the cost of claims from the irreversible damage caused to the coast. Let’s all hope their magical chemical works and it doesn’t have to pay! Don’t expect much from the government.