European Investment Bank supports GBP 250m gas network expansion and upgrade in Scotland and southern England

22 September 2010

The European Investment Bank has agreed to lend GBP250 million for the replacement, reinforcement and expansion of the gas distribution networks operated by Scotland Gas Networks and Southern Gas Networks. The two companies, wholly owned by Scotia Gas Networks (SGN), will receive GBP150m and GBP100m respectively. The loan will be for up to 16 years and will enable replacement of nearly 1,000km of cast iron pipes, increase connections to final customers and provide new pipelines linked to the national distribution network. The three year infrastructure development programme will be undertaken from 2010 to 2013 and will ensure the maintenance of a safe and reliable service for existing customers, as well as catering for increased capacity/storage and peak requirements.

Increasing domestic, commercial and industrial gas use will replace less efficient use of more polluting energy sources, contributing to EU energy and environmental objectives, in particular concerning the supply security and diversification. The project will also involve expanding the gas network by 120km in Scotland and 175km in southern England, and provide gas services to remote parts of the Scottish Highlands and Islands, an EU convergence region. It is expected that around 40,000 new customer connections will be made during the year, with approximately 20,000 in each network area.

“The European Investment Bank recognises the investment challenges essential to ensuring the reliable provision of gas across the UK.  We are committed to working closely with leading energy companies investing in improved delivery of gas when and where it is needed, alongside increasing storage and import capacity. This project complements EIB financing of LNG storage facilities at key UK facilities.” said Simon Brooks, European Investment Bank Vice President responsible for the United Kingdom.

SGN Chief Executive Officer John Morea said: “Borrowing long-term finance from the EIB for our company helps secure both the short and medium term future of both our gas distribution networks. Since our formation in 2005, we have spent many millions of pounds on the continued expansion and refurbishment of our gas networks, ensuring safe and reliable gas supplies for our customers far into the future. We are committed to ensuring gas has a major part to play in the UK's future energy mix and this financing will help us meet our current commitments and achieve our objectives. 

The European Investment Bank is the long-term lending institution of the European Union, whose shareholders are the 27 member states. The promotion of sustainable, competitive and secure sources of energy is a key policy objective of the European Union and the European Investment Bank has made lending to support Europe’s energy objectives a top priority. Over the last five years the institution has provided over GBP 4.5bn for key energy infrastructure across the United Kingdom and UK energy projects totalling GBP 1.8bn are currently being examined by the European Investment Bank. Key funding has been provided to six of the eight UK gas distribution networks by the EIB.

SGN is the UK's second largest gas distribution company, operating two of the largest gas networks. Scotland Gas Networks covers the whole of Scotland and Southern Gas Networks covers central southern and south east England. The combined distribution networks deliver gas safely and efficiently to over 5.7 million homes and businesses.

Nordic Awarded exclusive mandate to raise funds for Bio-degradable bottle water company

The global bottled water market valuation grew by 7% in 2006 to reach a value of $60,938.1 million. The volume of bottled water grew by 8.1% in 2006 to 115,393.5 million liters. In 2011, the market is forecast to have a value of $86,421.2 million, an increase of 41.8% since 2006. In 2011, the market is forecast to have a volume of 174,286.6 million liters, an increase of 51% since 2006.

The global rate of consumption more than quadrupled between 1990 and 2005. Purified water is currently the leading global seller, with U.S. companies dominating the field, and natural spring water, purified water and flavored water being the fastest-growing market segments.

Effects of bottled water

A large pile of Poland Spring bottles

Wasted material

The major criticism of bottled water concerns the bottles themselves. Individual use bottled water is generally packaged in Polyethylene terephthalate (PET). According to a NAPCOR study, PET water bottles account for 50% of all the PET bottles and containers collected by curbside recycling, and the recycling rate for water bottles is 23.4%, an increase over the 2006 rate of 20.1%. PET bottled water containers make up one-third of 1 percent of the waste stream in the United States.

The International Bottled Water Association also reports that the average weight of a plastic bottle water was 13.83 grams in 2007, compared to 18.90 grams in 2000, representing a 26.7% decline. Pepsi-Co has since introduced a bottle weighing 10.9 grams and using 20 percent less plastic, which it says is the lightest bottle of its kind that is nationally distributed.

An estimated 50 billion bottles of water are consumed per annum in the US and around 200 billion bottles globally.

EIB loans in Italy

Monday 20 September 2010

Contracts were signed, on 20 September, for two loans backed by resources made available to the Italian banking group UniCredit Leasing by the European Investment Bank (EIB) to support investment by small and medium-sized Italian businesses and projects in the renewable energy and environmental infrastructure sectors. The EIB has granted UniCredit Leasing two credit lines designed to further strengthen cooperation with the company. These latest contracts provide for €350 million for financing investments by SMEs and €200 million for supporting renewable energy and energy efficiency projects.

Nordic Partnership mandated to raise $500m for LNG Terminal

International Energy Association forecasts some $250 billion of investment in LNG business over the next 30 years.

"For bankers and advisors the day of the LNG specialist is therefore with us and has been so for a number of years."

A successful natural gas venture involves a series of independent projects in order to take gas extracted from the wellhead through processing, liquefaction, storage, transportation and regasification up to delivery of gas to the wholesale end customers. Traditionally, the various links in this chain were separately and independently developed, but this no longer holds true. An LNG project can therefore range from a narrowly defined "within fence" construction of, say , a facility to the creation of a massive multi-jurisdictional business that covers all or the major part of the energy chain. Recent examples of this latter phenomenon include the Qartar Gas II project and Phase 2 of the Sakhalin II project in Russia. It is not therefore possible in today's world to speak of a definitively of a single methodology for financing LNG projects as the underlying dynamics vary so widely  and the scope for innovative financing structures increases. Financing techniques, and indeed financiers, have evolved rapidly to meet the greater opportunities and challenges which the industry now presents. While a number of financing  structures remain  along relatively straightforward and traditional lines ( e.g. single facility tolling structures or vessel financing on an asset-backed basis), the headline deals are now far more complicated and require a deep understanding of the issues arising throughout the energy chain. 

To date, the LNG industry has raised more than $95bn of debt, according to Dealogic, of which over $60bn was for liqufaction projects, constituting over 50% of the total capital raised. But the assumption that capital always available for good projects cannot always be made, not only because of the global financial crisis, but also beacause of the sheer size of recent LNG Projects. Before 2009, most projects were financed primarily by commercial banks, aided by export credit agencies (ECAs) where political-risk protection was required. Around 30 commercial banks provided about two thirds of project finance lending volume and they were typically able to provide up to $2bn-3bn in aggregate for any one project adequate for most projects when combined with ECAs.

Nordic Partnership are looking at a range of innovative financial regasification structures for a client in order to optimize the funding having assembled a specialist LNG funding team with direct access to LNG funding  both in terms of equity and debt.


Asia LNG Summit 2010 October 13th –14th, 2010 | Beijing, China

For all enquiries  contact Nordic Partnership +44 207 193 3604

Top 10 Qualities of a Project Manager

By Timothy R. Barry

What qualities are most important for a project leader to be effective? Over the past few years, the people at ESI International, world leaders in Project Management Training, have looked in to what makes an effective project leader. With the unique opportunity to ask some of the most talented project leaders in the world on their Project Leadership courses ESI have managed to collect a running tally on their responses. Below are the top 10 in rank order according to frequency listed.

Inspires a Shared Vision

An effective project leader is often described as having a vision of where to go and the ability to articulate it. Visionaries thrive on change and being able to draw new boundaries. It was once said that a leader is someone who "lifts us up, gives us a reason for being and gives the vision and spirit to change." Visionary leaders enable people to feel they have a real stake in the project. They empower people to experience the vision on their own. According to Bennis "They offer people opportunities to create their own vision, to explore what the vision will mean to their jobs and lives, and to envision their future as part of the vision for the organisation." (Bennis, 1997)

Good Communicator

The ability to communicate with people at all levels is almost always named as the second most important skill by project managers and team members. Project leadership calls for clear communication about goals, responsibility, performance, expectations and feedback.

There is a great deal of value placed on openness and directness. The project leader is also the team's link to the larger organisation. The leader must have the ability to effectively negotiate and use persuasion when necessary to ensure the success of the team and project. Through effective communication, project leaders support individual and team achievements by creating explicit guidelines for accomplishing results and for the career advancement of team members.

Integrity

One of the most important things a project leader must remember is that his or her actions, and not words, set the modus operandi for the team. Good leadership demands commitment to, and demonstration of, ethical practices. Creating standards for ethical behaviour for oneself and living by these standards, as well as rewarding those who exemplify these practices, are responsibilities of project leaders. Leadership motivated by self-interest does not serve the well being of the team. Leadership based on integrity represents nothing less than a set of values others share, behaviour consistent with values and dedication to honesty with self and team members. In other words the leader "walks the talk" and in the process earns trust.

Enthusiasm

Plain and simple, we don't like leaders who are negative - they bring us down. We want leaders with enthusiasm, with a bounce in their step, with a can-do attitude. We want to believe that we are part of an invigorating journey - we want to feel alive. We tend to follow people with a can-do attitude, not those who give us 200 reasons why something can't be done. Enthusiastic leaders are committed to their goals and express this commitment through optimism. Leadership emerges as someone expresses such confident commitment to a project that others want to share his or her optimistic expectations. Enthusiasm is contagious and effective leaders know it.

Empathy

What is the difference between empathy and sympathy? Although the words are similar, they are, in fact, mutually exclusive. According to Norman Paul, in sympathy the subject is principally absorbed in his or her own feelings as they are projected into the object and has little concern for the reality and validity of the object's special experience. Empathy, on the other hand, presupposes the existence of the object as a separate individual, entitled to his or her own feelings, ideas and emotional history (Paul, 1970). As one student so eloquently put it, "It's nice when a project leader acknowledges that we all have a life outside of work."

Competence

Simply put, to enlist in another's cause, we must believe that that person knows what he or she is doing. Leadership competence does not however necessarily refer to the project leader's technical abilities in the core technology of the business. As project management continues to be recognised as a field in and of itself, project leaders will be chosen based on their ability to successfully lead others rather than on technical expertise, as in the past. Having a winning track record is the surest way to be considered competent. Expertise in leadership skills is another dimension in competence. The ability to challenge, inspire, enable, model and encourage must be demonstrated if leaders are to be seen as capable and competent.

Ability to Delegate Tasks

Trust is an essential element in the relationship of a project leader and his or her team. You demonstrate your trust in others through your actions - how much you check and control their work, how much you delegate and how much you allow people to participate. Individuals who are unable to trust other people often fail as leaders and forever remain little more that micro-managers, or end up doing all of the work themselves. As one project management student put it, "A good leader is a little lazy." An interesting perspective!

Cool Under Pressure

In a perfect world, projects would be delivered on time, under budget and with no major problems or obstacles to overcome. But we don't live in a perfect world - projects have problems. A leader with a hardy attitude will take these problems in stride. When leaders encounter a stressful event, they consider it interesting, they feel they can influence the outcome and they see it as an opportunity. "Out of the uncertainty and chaos of change, leaders rise up and articulate a new image of the future that pulls the project together." (Bennis 1997) And remember - never let them see you sweat.

Team-Building Skills

A team builder can best be defined as a strong person who provides the substance that holds the team together in common purpose toward the right objective. In order for a team to progress from a group of strangers to a single cohesive unit, the leader must understand the process and dynamics required for this transformation. He or she must also know the appropriate leadership style to use during each stage of team development. The leader must also have an understanding of the different team players styles and how to capitalise on each at the proper time, for the problem at hand.

Problem Solving Skills

Although an effective leader is said to share problem-solving responsibilities with the team, we expect our project leaders to have excellent problem-solving skills themselves. They have a "fresh, creative response to here-and-now opportunities," and not much concern with how others have performed them. (Kouzes 1987)

Understanding Virtual Data Rooms

A virtual data room (“deal room” or “data room”) is a secure web-based document repository generally used for buyers or investors to perform their due diligence on M&A transactions or investment. It is however an increasing trend in top legal firms to use virtual document roomsto support business and commercial litigation processes for external collaboration and file sharing.

The virtual data room replaced the physical data room

The virtual data room replaced the physical data room where binders of documents were stored in a secure “monitored data room” and potential buyers or investors would confidentially book time in the room.  Multiple investors and buyers to simultaneously log into the virtual data room website to review documents anonymous to each other.  Virtual data roomtechnology can prevent visitors from saving or printing certain documents and limit viewing time if required.   Virtual deal rooms are easy to set-up with high-powered tools that can upload or download 100s if not 1000s of documents in a matter of minutes or a couple of hours directly from a single local source or multiple locations.

Electronic data rooms fully mimic the physical data room but without the required travel or the inconvenience of booking sequential visits.  A shorter time frame for reviewing diligence information and reduces risk of a deal going off track and potentially can increase bid values with a greater sense of urgency.

In 2001 several hundred M&A transactions were conducted on virtual data rooms.  By 2008 the vast majority of M&A transactions (in the tens of thousands), ran their comprehensive due diligence process in such an online workspace.  This has been aided the growth of lower cost and highly secure virtual data room providers.

Most M&A transactions run the due diligence process in virtual data rooms.

There are many virtual data rooms offerings that have been expanded to be ongoing use facilities for sharing confidential documents for joint ventures, biotech licensing deals, commercial real-estate, insolvency and litigation.

In addition, some virtual data room services have expanded their functionality to include “virtual closing rooms”.  In this case the actual closing documents can be versioned by lawyers and executed to close the deal. This makes the process more organized and less prone to oversight and omission.

Many virtual deal rooms offer unlimited subscription packages for multiple sales or offerings. Security, integration, ease of use, quality and availability of support and training are other key differentiators among the different virtual data room service providers.

Africa's biggest water project

6 August 2010

President Jacob Zuma on Friday concluded his state visit to Lesotho by signing several agreements with the landlocked country.

During his two-day visit an agreement on a grant from the African Renaissance Fund for the implementation of the advance infrastructure component of the Metolong Dam and water supply programme was signed.

Other agreements included memorandums of understanding on economic cooperation, as well as concerning cooperation in the legal field, and a declaration of intent on the second phase of the Lesotho Highlands Water Project.

Strengthening existing cooperation

Eight cabinet ministers as well as the speaker of the national assembly and senior government officials accompanied the president on his trip, which included talks with Lesotho Prime Minister Pakalitha Bethuel Mosisili.

Zuma also addressed the joint sitting of Parliament, where he called for strengthening of the existing cooperation in political, economic, social and security sectors of the two countries.

He also launched the dialogue between South African and Lesotho businesspeople, where discussions focused on issues that touch the lives of ordinary people like the facilitation of free movement of people and goods along the common borders.

Cooperation in the fields of tourism, transport and water sectors; implementation of all the bilateral agreements were also on the agenda.

US Security Council seat

In a joint communiqué, the Prime Minister assured President Zuma of Lesotho’s unwavering support for South Africa's candidature for the non-permanent seat in the United Nations Security Council for the 2011/12 term.

Lesotho also thanked South Africa for its support during the attacks that were made at the Makoanyane Military Base, the State House and against some residents of Maseru in April 2009.

SA was commended for the role it plays in peace keeping operations particularly for providing troops in the Sudan, the Democratic Republic of Congo and Burundi.

President Zuma extended an invitation, which was accepted, to Lesotho King Letsie III to visit South Africa.

For information about the Lesotho Highlands Project Development of Water Resources 


To learn more click here 

World Bank's $3.75bn coal plant loan defies environment criticism US, Britain, the Netherlands, Italy and Norway abstain from vote in protest

The World Bank approved a controversial $3.75bn loan to build one of the world's largest coal-fired power plants in South Africa yesterday, defying international protests and sharp criticism from the Obama administration that the project would fuel climate change.

The proposed Medupi power station, operated by South Africa's state-owned Eskom company, was fiercely opposed by an international coalition of grassroots, church and environmental activists who said it would hurt the environment and do little to help end poverty. As planned, it would put out 25m tonnes of carbon dioxide a year and would prevent South Africa making good on a promise to try to curb future emissions.

The bank said it had acted to help South Africa escape a crippling power shortage. "Without an increased energy supply, South Africans will face hardship for the poor and limited economic growth," said Obiageli Ezekwesili, the World Bank's vice president for Africa.

But the bank's approval for the Medupi plant, though expected, was overshadowed by dissatisfaction from American and European donors, as well as a groundswell of protests.

America, Britain, the Netherlands, Italy and Norway registered their opposition to the loan by abstaining from the vote, the traditional method of dissent on the board which operates by consensus.

In a statement, the US treasury department said the loan was incompatible with the bank's stated commitment to promoting low carbon economic development.

"We expect that the World Bank will not bring forward similar coal projects from middle-income countries in the future without a plan to ensure there is no net increase in carbon emissions," it said. Britain, registering its abstention, noted the controversy surrounding the plant.

"The project raises several sensitive and potentially controversial issues which it has not been possible to resolve before this period began," a statement from Dfid said.

However, a World Bank official said the strong wording of such statements did not carry over to the Board's discussions of the loan. "It was not an easy decision," he said. "Everybody recognised the concerns about climate change, but this was a balancing act."

The vote by the World Bank had been widely seen as a test of the Obama administration's commitment to new guidelines put forward barely three months to shift aid to the developing world away from coal and fossil fuels to less polluting energy sources.

The administration had come under strong pressure from Democratic leaders in Congress as well as environmental organisations to try to block the loan.

Environmental organisations said its decision to abstain fell short.

"I am not going to give them points for abstaining. This was totally the easy way out," said Karen Ornstein of Friends of the Earth. "If the US were to follow its own clean coal guidance for multilateral development banks it would have had to vote no on this loan."

Michael Stulman of Africa Action said the entire project was misguided, and would do little to help poor South Africans. "This is one of those stereotypical development disaster stories," he said.

• This article was amended on 9 April 2010. The original said that the Medupi power station, as planned, would emit 25 tonnes of carbon dioxide. This has been corrected.

To learn more click here 

By 2050 Europe will be making 50% of Electricity from Wind Power

Nordic Partnership has located a number of sources for funding wind farms both on shore and offshore. So if you are looking for funding please contact us on +44 0207 193 3604


Click here for overview

Project due-diligence can cost thousands and can save millions

• Confirmation that the business is what it appears to be;
• Identify potential "deal killer" defects in the target and avoid a bad business transaction;
• Gain information that will be useful for valuing assets, defining representations and warranties, and/or negotiating price concessions; and
• Verification that the transaction complies with investment or acquisition criteria.

Moving Office in November 2010

Nordic will be moving UK representative office to new Berkeley Square Office from  November to Berkeley House. In the interim please send all documents by email to nordicpartnership@gmail.com
contact numbers will stay the same.

Where to invest ? Market for offshore Drilling Units booms

April 25, 2008

Offshore rig count grows by two

HOUSTON: The worldwide offshore contracted rig count grew by two this week, while the total available offshore rig fleet size is unchanged, according to ODS-Petrodata's weekly mobile offshore rig count.

This week, 614 of the world's 685 mobile offshore drilling units are under contract.  Worldwide offshore rig fleet utilization is 89.6 percent.

In the Asia/Australia region, the number of rigs under contract rose by one this week, thanks to a new jackup contract.  With 100 out of 103 available offshore rigs under contract, fleet utilization stands at 97.1 percent.

All 99 mobile offshore drilling units in the European/Mediterranean region are under contract; European offshore rig fleet utilization is 100.0 percent.

The U.S. Gulf of Mexico contracted and total offshore rig counts are unchanged this week.  With 100 rigs out of 125 available under contract, fleet utilization remains at an even 80.0 percent.

The South American offshore drilling fleet size and number of rigs under contract are unchanged this week.  With 68 rigs out of 92 available under contract, fleet utilization is 73.9 percent.

In West Africa, the offshore rig fleet size and the number of contracted rigs are unchanged. With 57 rigs out of 58 available under contract, utilization remains at 98.3 percent.

For additional information, contact: Karen Boman, at 832-463-3000, email kboman@ods-petrodata.com.

Where to Invest - Gold ?? $1000 USD per Ounce ???

For an update on Gold chart click here 

George Soros said that what we are seeing is not just another recession but the unwinding of the huge credit bubble that began after WW2. Fund manager Jim Rogers said we are going to see something much worse than a normal recession, and that the severity of the onset is surprising him.

Well, surprises to the downside appear to be the norm these days. I think the Central banks, the Fed and ECB, are nothing less than horrified, a bit panicked, and realize their normal major weapons to combat this Depression 2.0 are not working much at all. If this is a credit crisis, offering more credit does not work, people cannot pay what they already have borrowed. We already are seeing cases where banks are freezing their balance sheets (not lending new loans) to try and stem the bleeding. I saw one commentator (Mike Shedlock) say the US banks have lost their entire net capital so far! Financial institutions are literally shell shocked at how fast this happened. (Witness financial mass destruction ala W. Buffett thanks to derivatives.)

In fact, I am seeing comments from financial media that big investors are beginning to realize just what I said above, that the Central Banks have lost control of the situation.

Gold is rallying in this whole mess. In fact, if you look at gold's big rises in the last year, it correlates well with the onset of the credit crisis after Aug, September.

Gold seems to think we are in stagflation. Gold rose dramatically in the stagflation of the 1970s. We see many of the same trends today. The credit bust has caused central banks to flood out money, and growth is stalling. Inflation remains a problem, tying central bank's hands, and since we are in negative real rates (inflation is higher than US interest rates, hence negative) gold reacts by rising dramatically. Gold rises big in negative inflation environments.

As central banks combat Depression 2.0 and try to stave of deflation which wants to emerge, and markets contract and spending contracts, gold will rise during the stagflationary stage, which we are in now.

At some point, deflation might actually come into the picture, and gold steady if the US and ECB don't panic and just flood out $trillions and trillions to try and stop the deflation from emerging.

But, in any case, unless things change the direction they are going, and if the credit bubbles continue to be paralyzed and deleveraging, and central banks keep flooding out money and lowering interest rates, gold will rise well over $1000 in 08 and stay there.

The Great Depression 2008 - It can't happen to us....can it?

Post Bubble America Heading for Deepest Recession Since the Great Depression

Economics / Economic Depression

Mar 08, 2008 - 03:13 AM

By: Mike_Whitney

“Market conditions are the worst anyone in this industry can ever remember. I don't think anyone has a recollection of a total disappearance in liquidity...There are billion of dollars worth of assets out there for which there is just no market.” Alain Grisay, chief executive officer of London-based F&C Asset Management Plc; Bloomberg News

The hurricane that began with subprime mortgages, has swept through the credit markets wreaking havoc on municipal bonds, hedge funds, complex structured investments, and agency debt (Fannie Mae). Now the first gusts from the Force-5 gale are touching down in the real economy where the damage is expected to be widespread.

The Labor Department reported on Friday that US employers cut 63,000 jobs in February, the biggest monthly decline in five years. The cut in payrolls added to the 22,000 jobs that were lost in January. 52,000 jobs were cut in manufacturing, while 331,000 have been lost in construction since September 2006. The Labor Department also reported on Wednesday that worker productivity slowed significantly in the last quarter of 2007. When productivity is off; labor costs go up which adds to inflationary pressures. That makes it harder for the Fed to lower rates to stimulate the economy without inviting the dreaded “stagflation”---slow growth and rising prices.

Economic Depression

Feb 09, 2008 -

By: Andy_Sutton

Webster's defines complacency as “1.satisfaction or contentment 2. smug self-satisfaction” There is probably not a better word to describe the current state of perception with regard to economic and financial malady. I had an interesting conversation the other night about exactly this topic and the individual I was speaking with had an overriding belief that we cannot suffer economically simply because the current generation is not prepared to deal with it. While I certainly agree with the latter assertion, the former continues to baffle me. I am certainly not prepared to deal with a lengthy hospital stay as the result of a horrific car crash, but that alone doesn't cloak me in immunity from having an accident. The reasoning is so broken and flawed, yet it is often all we get in terms of a perception of what is going on.

This disconnect begets a discussion of why exactly it is that society has chosen to believe itself to be immune from bad things. It is odd in itself that when you talk to individuals, they seem to be acutely aware of many of the challenges facing us, but when you put all the individuals together and create a society, we act as though the party will indeed last forever. We are certainly dealing with a situation in which the intelligence of the whole is by far less than the sum of all its parts. Here's a little bit of déjà vu for you, compliments of Wikipedia:

“ In the 1920s, Americans consumers and businesses relied on cheap credit, the former to purchase consumer goods such as automobiles and furniture and the later for capital investment to increase production. This fueled strong short-term growth but created consumer and commercial debt. People and businesses who were deeply in debt when price deflation occurred or demand for their product decreased often risked default. Many drastically cut current spending to keep up time payments, thus lowering demand for new products. Businesses began to fail as construction work and factory orders plunged.”

Sound familiar anyone? See any price deflation going on? The Wilshire 5000 has only lost about 2.5 TRILLION dollars in value in the last two months or so. What about the loss in home equity? Another trillion or two? Who knows, but I think you get the point. We are seeing almost to the final utterance the same play we saw unfold in 1929. Were those folks any more prepared for the Great Depression than we are today? I'd argue that while they were perhaps a bit better equipped to provide for their own sustenance that American society in the 1920's was as complacent as we are today. When the realization of history's coup de grace hits, we will be caught as unaware as our ancestors were back in 1929.

Here are some other examples of what Alan Greenspan likes to call ‘irrational exuberance' in the 1920's:

"We will not have any more crashes in our time."

John Maynard Keynes in 1927 (The authenticity of this one is a little suspect) DOW ~ 175

"There will be no interruption of our permanent prosperity."

Myron E. Forbes, President, Pierce Arrow Motor Car Co., January 12, 1928 – DOW ~ 200

"There may be a recession in stock prices, but not anything in the nature of a crash." - Irving Fisher, leading U.S. economist, New York Times, Sept. 5, 1929 – DOW ~ 375

"All safe deposit boxes in banks or financial institutions have been sealed... and may only be opened in the presence of an agent of the I.R.S." - President F.D. Roosevelt, 1933 – DOW ~ 65

Tuesday morning we received news that according to the Institute of Supply Management, the service portion of our economy underwent a significant contraction during the month of December. This is alarming given the fact that December is normally one of the busiest times of the year. Even still, a trip past the local mall provides a busy scene. People are streaming in and out, carrying boxes and bags of imported trinkets to their imported cars. They will then use imported gasoline to drive to their home, the mortgage of which is likely to be owned by a foreign investor. Yet the average American citizen sees nothing wrong with this picture. Or could it be that they don't even see the picture at all? The media has certainly been playing the role of absentee informant in recent years, choosing to focus on such insipid topics as Britney Spears' latest rehab stint rather than the important business at hand.

Here now, are some quotes from this generation's 1929..in 2007 and 2008:

“It is encouraging that inflation expectations appear to be contained,” Fed Chairman Ben S. Bernanke – Testimony to Congress – March 28 th , 2007 – DOW ~ 12,500, Headline CPI-U ~ 2.8% Y/Y

"As I think you know, I believe very strongly that a strong dollar is in our nation's interest, and I'm a big believer in currencies being set in a competitive, open marketplace," - Henry Paulson – Secretary of the Treasury – USDX ~ 81.50

““We are making history. What has passed the Congress in record time is a gift to the middle class and those who aspire to it in our country.” House Speaker Nancy Pelosi on the $168 Billion tax ‘rebate' while the middle class is spending their Wal-Mart Christmas gift cards on food and other necessities.

They're making history all right. Too bad it will end up being the WRONG kind. How can we ever hope to focus the population on the urgency of our current predicament when our leaders are willing to make it worse by handing our freebies, bailing out those who willingly make poor investment choices and telling us everything can be ‘free' if we'll only pull their lever on election day?

Or am I putting the cart in front of the horse? Perhaps a contrarian opinion might be that our leaders are giving the public exactly what it wants. In either case, I am quite certain that our state of unpreparedness will not constitute a free pass from the negative effects of a recession or a retraction of any of the financial excesses we've enjoyed over the past few decades.

By Andy Sutton

Andy Sutton holds a MBA with Honors in Economics from Moravian College and is a member of Omicron Delta Epsilon International Honor Society in Economics.