Chesapeake

Chesapeake Falls Amid Concern Over Hedging Contracts (Update1)
By Dan Lonkevich
Oct. 10 (Bloomberg) -- Chesapeake Energy Corp., this year's worst-performing petroleum producer in the Standard & Poor's 500, fell 6.7 percent in New York trading amid concern hedging contracts won't protect the company against a plunge in natural- gas prices.
Oklahoma City-based Chesapeake tumbled $1.19 to $16.52 in New York Stock Exchange composite trading. The decline, which followed Chesapeake's 21 percent drop yesterday, capped the stock's worst week on record.
Investors are concerned that Chesapeake and other U.S. oil and gas producers have hedging contracts with financial firms and other counterparties that won't be able to pay for their output at the agreed-upon prices because of the global credit crisis, said Robert Goodof, who helps manage $25 billion at Loomis Sayles & Co. in Boston.
Chesapeake also has so-called knockout swap contracts on more than one-third of its 2009 production, and those deals don't obligate the buyers to take gas when prices drop to $6.28 per thousand cubic feet of the heating and power-plant fuel, according to analyst Joseph Allman of JPMorgan Chase & Co. in New York. U.S. gas futures dropped to $6.65 today and have plunged 50 percent since the end of June.
``With natural gas close to $6.60, we think the concern about Chesapeake's knockout swaps is legitimate,'' Allman said in a note to clients. He rates Chesapeake shares ``neutral.''
Price Protection
Oil and gas producers use hedging contracts to lock in prices and ensure adequate returns from their wells and sufficient cash flow to pay off their debt.
Chesapeake spokesman Jeff Mobley said the company has contracts with more than 20 counterparties, all financial institutions. He declined to name them. Knockout swaps have served as ``prudent tools'' for the company since 2001, he said, giving it greater upside on prices.
The hedges are knocked out only if prices go below the specified price on the last trading day of the month, Mobley said. Losing that price protection could reduce cash flow, which Chesapeake would be able to manage by slowing spending.
``We are not obligated to purchase assets next year and can curtail our drilling,'' Mobley said.
Chesapeake hedged 83 percent of this year's output at $9.30. The company has 72 percent of estimated 2009 production hedged at $9.63 and 46 percent of 2010 output locked in at $9.89.
Morgan Stanley
For more information go to Oct. 10 Bloomberg

JC Watts Banquet Photo

I received this email today from one of our readers.

Nov 4th election is Freedom vs. Socialism



The nation will choose Nov. 4th our destiny for the rest of our life time and possibly the life of the USA as our founding fathers designed it and as we know it.



People better wake up and understand what is at stake.

Berry Smith

JC Watts Photo

Our good friend Bill Graves. Great guy with a funny sense of humor, once you got him going. He took being a County Commissioner very serious. I wish the County would honor Bill, in some special way. Bill did a lot for the good folks of Cleveland County.
Bob

Will Obama Gut Our Military

Dems are trying to get this video pulled. It shows the truth about Obama.

Who Caused the Crisis

This is an interesting video about the Bail Out. What caused it, who caused it and Obama's connection.



See more interesting videos.

Obama's Cronies Out Stealing McCain Signs

Democrats cry about Obama signs missing. They claim its racist stealing the Obama signs. Now hold on RACIST, I don’t think so. Here is the real story.

Tuesday evening around 4:00 PM, Senator Russell was driving home. When he turned onto his street he noticed a car parked in his yard. As he got closer, he saw a blond headed guy in his 20’s pick up his McCain sign and drive off. Sen. Russell parked in his driveway and ran out in the street to stop the pickup. Rather than slowing down the driver headed directly towards the Senator and he had to move out of the way to avoid being hit. Sen. Russell got a good look at the driver and also got his tag number. Sen. Russell filled a police report. Be on the look out for tag # OK 750-XHJ, white 2004 Dodge pickup. The police report # is 08-85994. Be on the look out for this guy.
Bob

The Worst Debate Ever

Last night’s debate, now known as the worst debate ever, did have a few surprises. The number one surprise for me was when Tom Brokaw asked if health insurance was a right. Obama stated, “it’s a right”. Now, where in the constitution does it state health insurance is a right? What is even worse, in my opinion, is McCain did not challenge Obama’s comment. Is driving a car a right? Obama believes it’s a right. Under Obama’s leadership, we will become nothing more than a communist country, a country full of entitlements.
I hope the voters wake up and vote for McCain. Don’t forget the President appoints the U.S. Supreme Court Justices.
Bob

Rush Limbaugh & SNL Skit

Rush comments on the SNL Bailout Skit. This is funny.

Cleveland County Ask for Sales Tax Vote

Cleveland County Board of Commissioners voted Monday for a County wide election for a quarter cent sales tax. The proceeds of the sales tax would go exclusively to the construction debt and future M&O of the new detention center. The sales tax is set to sunset in 20 years and any additional proceeds will be used to pay down the debt.

Fox 25 interviewed Commissioner Sullivan Monday - See the video.

The Board of Commissioners had three options of financing; pay the debt from General Revenue, pay debt with an addition property tax millage or with a sales tax. All though the County has been able to save money each year for capital improvements, the obligation size each year would be greater than what the county has been able to save and there would not be money available for any increases in the cost of supplies and energy or any emergencies.

A County wide sales tax would generate the amount needed to pay the debt and possibly at an advanced rate. Cleveland County has approximately $1.2 billion in consumer sales subject to a County sales tax. When you start projecting the growth and additional restaurants and retail stores in Moore and Norman, this amount could grow by 20% or more over the next 5 years. This is not factoring in the TIFF at the University Park in Norman.

The Board of County Commissioners are looking at all alternatives. One alternative is asking the University of Oklahoma to be a community partner. The University is the largest land holder in Cleveland County with no property tax generated. The University uses Cleveland County and Norman public resources, such as fire, police and roads. One way that the University could participate would be asking for a Public Safety Fee on all athletic tickets sold through the athletic department. This fee could be used to pay down the debt and to help with the M&O for the Sheriff's department.

Let your County Commissioner know you thoughts on the upcoming vote December 9, 2008.

"Every County, by authority of the Board of County Commissioners and at the expense of the County, Shall have a jail or access to a jail in another County for the safekeeping of prisoners lawfully committed. Oklahoma State Statutes 57 § 41

JC Watts Photos

Am I A Racist

Am I a Racist?

Recently I had to fly to Nashville. My trip took me to Memphis where I had to change planes. During my layover in Memphis, I was watching CNN and listening to the TV talk about the Presidential race. I could hardly sit still and listen to all the B.S. CNN was talking about. I could tell the guy setting next to me was in favor of the comments that we were listening, too. I looked over at him and stated “where are you from?” “He responded NYC”. I asked, “Do you support McCain?” he said, “hell no!” I said, “Oh, so you support Obama.” Then he asked me, “Who do you support?” I responded, rather proudly, “John McCain”. He said, “Any white person that does not support Obama is nothing more than a racist!” I stated, “I am not a racist and I don’t support Obama!” I moved then. He did cause me to think about his comments. Below are my thoughts.

I am not voting for Obama; does that make me a racist? I have read that 95% of blacks are voting for Obama, does that make them racist? Are they voting for Obama just because he is black? I voted for J.C. Watts and I am proud to call him a good friend. I like Alan Keys, Colin Powell, and Michael Steele. So, why can I support some blacks, yet if I oppose Obama, I am a racist? I did not support Jesse Jackson when he ran for President in 1988 and I did not support Al Sharpton when he for President in 2004. Why did I not support these individuals? Could it be that, I do not believe in the same issues that some of these black candidates do? Could it be that, I do not believe in abortion? Could be that, I believe in the second amendment and they oppose the second amendment? Could it be that, I do not believe in higher taxes? Could it be that, I do not believe in more liberal judges?

Obama is too liberal; I am supposed to feel guilty because I do not support him because he is black? I don’t think so!

Obama could be as white as Joseph Biden and I would not support him. Tell me how am I a racist? Obama favors same sex marriage, I oppose. Obama supports government control of heath care, I oppose. I believe in less government, Obama believes the government has all the answers. I believe we should drill now and reduce our dependence on foreign oil. Obama opposes lifting the ban on off shore drilling. I oppose hate crime laws, Obama supports hate crime laws. I believe we should protect infants born alive; Obama opposes laws protecting botched abortions. Some call this murder!

Obama is nothing but a smooth talking, hip-hopping, rapper snake oil salesman. He is cocky and has a reputation of being a dishonest, low-life, Chicago hood. He hangs out with people that hate this country. He hangs with known criminals. He does not even honor our flag. Why would any normal red blooded American vote for a jerk like Obama just because he is black? I am not voting for Obama because he is wrong on every issue. Black, blue or yellow color has nothing to do with how I vote.

Bob

Why I voted Yes By Tom Cole

Why I Voted Yes

By: Congressman Tom Cole



Last week both the House and Senate passed the Emergency Economic Stabilization Act of 2008. As you may imagine, this was the most difficult vote I have ever been asked to cast as an elected official. Lyndon Johnson once said that "doing the right thing isn't hard, knowing the right thing to do is." In the past few weeks I have heard from thousands of my constituents, and most - but by no means all - of them were opposed to this bill. So it was pretty clear to me that voting no would have been the easy thing to do. But I do not believe my constituents sent me to Congress to do the easy thing. I believe they sent me to Congress to study complex issues, give thoughtful consideration to difficult challenges such as the one we voted on and to use my best judgment on their behalf.



After studying the issue carefully and seeking the advice and counsel of economists and other experts on the American and global economy, I came to the conclusion that failure to take bold action would have resulted in a stock market collapse, frozen credit and economic catastrophe. I was unwilling to gamble the jobs, life savings, retirement accounts and the homes and businesses of the people I was elected to represent. Nor was I willing to risk the global, political and social turmoil that will surely occur if there is a severe and prolonged recession or depression in the United States.



As Oklahomans, we have seen more than our fair share of economic hardship over the years. My own parents and grandparents lived through the Great Depression. They dealt with the hard times at home and the wars abroad that it spawned. Most of us lived through the 1980s when a banking and real estate collapse devastated Oklahoma's economy. We saw our state's per capita income fall from 98% to 79% of the national average. We watched hundreds of banks close, thousands of businesses fail and countless families lose their life's savings. I was not willing to stand by and let that happen again for the sake of political popularity, ideological purity or legislative perfection.

The bill that I voted for last week was a much better bill than Treasury Secretary Paulson's original proposal. This bill had protections for taxpayers such as a federal insurance program that will force Wall Street to share the financial burden. According to the legislation, taxpayers will also be protected from losses, irresponsible executives will not be rewarded with "golden parachutes" or severance pay and community banks will be able to write off losses on Freddie and Fannie mortgage assets that they hold. The bill also restricted the Treasury's immediate spending authority by half, requiring a second vote of the Congress in order to receive authority to spend the remaining $350 billion.

Some have attempted to suggest that this legislation included earmarks and / or pork. This is patently untrue. What it actually included was an extension of several very popular bi-partisan tax cuts intended to strengthen the economy as well as the buying power of families and small businesses that would have otherwise been subject to the Alternative Minimum Tax.

Finally, I heard from many of my colleagues and constituents who told me that "something must be done - but not this." And without question, if I had my way the legislation would have looked quite a bit different. But this legislation was brought to the House floor under rules that prevented it from being amended. Nor was any alternative legislation brought to the floor to be considered. I did not have the choice of voting for the Emergency Economic Stabilization Act of 2008 or some alternative. My choice was to vote for the Emergency Economic Stabilization Act of 2008 or do nothing. After a great deal of consideration, I came to the conclusion that voting no and doing nothing would not have been the right thing to do.

...is reading "The Post-American World" -- it's a Muslim's view.

Missing McCain Signs All Over Norman

I have had several calls, the last few days, from my Republican friends concerning McCain yard signs. It seems that someone is stealing McCain signs all over Norman. Some blocks, in the Brookhaven area, have had their McCain signs stolen and the Obama signs are the only poltical signs in yards. So tell me, is it racial? I bet the media would say "oh that's just politics, when a McCain sign is stolen". Oh, but if an Obama sign is stolen it's racial. Give me a break! I have names, if the media cares to contact the individuals, to confirm that McCain signs have indeed been stolen. One guy is on his 4th McCain sign. So, I say to the media "you guys that are spreading the racial crap are full of crap"! I do not agree with anyone stealing signs. It is wrong for Republicans and it is wrong for Democrats.
But, it is just stupid to say it's racial!

Bob

Barney Frank Bailout News

Barney Franks homosexual love affair cost taxpayers billions.

From The National Review

Don't the American people deserve to know that Democrat Barney Frank, then-ranking member and now chairman of the House Financial Services Committee, said, “I want to roll the dice a little bit more in this situation towards subsidized housing”? Isn’t the fact that the ranking Democrat in charge of oversight of Fannie Mae was in a sexual relationship with a high-ranking Fannie Mae executive a glaring conflict of interest? Isn’t it worth noting that Democratic Rep. Maxine Waters insisted, “we do not have a crisis at Freddie Mac, and in particular at Fannie Mae, under the outstanding leadership of Mr. Frank Raines”? Shouldn’t the American people know that Democratic Rep. Gregory Meeks insist that “there's been nothing that was indicated that's wrong with Fannie Mae”?

What Caused The Loan Crisis

The following is a condensation of a series from the Investor's Business Daily explaining "What Caused the Loan Crisis":



1977: Pres. Jimmy Carter signs the Community Reinvestment Act into Law. The law pressured financial institutions to extend home loans to those who would otherwise not qualify. The Premise: Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime, investment, jobs, etc.



Results: Statistics bear out that it did not help.



How did the government get so deeply involved in the housing market? Answer: Bill Clinton wanted it that way.



1992: Republican representative Jim Leach (IO) warned of the danger that Fannie and Freddie were changing from being agencies of the public at large to money machines for the principals and the stockholding few.



1993: Clinton extensively rewrote Fannie Mae and Freddie Mac's rules turning the quasi-private mortgage-funding firms into semi-nationalized monopoies dispensing cash and loans to large Democratic voting blocks and handing favors, jobs and contributions to political allies. This potent mix led inevitably to corruption and now the collapse of Freddie and Fannie.



1994: Despite warnings, Clinton unveiled his National Home-Ownership Strategy which broadened the CRA in ways congress never intended.



1995: Congress, about to change from a Democrat majority to Republican, Clinton orders Robert Rubin's Treasury Dept to rewrite the rules. Robt. Rubin's Treasury reworked rules, forcing banks to satisfy quotas for sub-prime and minority loans to get a satisfactory CRA rating. The rating was key to expansion or mergers for banks. Loans began to be made on the basis of race and little else.



1997 - 1999: Clinton, bypassing Republicans, enlisted Andrew Cuomo, then Secretary of Housing and Urban Developement, allowing Freddie and Fannie to get into the sub-prime market in a BIG way. Led by Rep. Barney Frank and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks. Since they could borrow at lower rates than banks their enterprises boomed.



With incentives in place, banks poured billions in loans into poor communities, often "no doc", "no income", requiring no money down and no verification of income. Worse still was the cronyism: Fannie and Freddie became home to out-of work-politicians, mostly Clinton Democrats. 384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying and political activities. During the 1990's Fannie and Freddie enjoyed a subsidy of as musch as $182 Billion, most of it going to principals and shareholders, not poor borrowers as claimed.



Did it work? Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority homeownership rates are shrinking fast.



1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie and Freddie's excesses. Congress held hearings the ensuing year but nothing was done because Fannie and Freddie had donated millions to key congressmen and radical groups, ensuring no meaningful changes would take place. "We manage our political risk with the same intensity that we manage our credit and interest rate risks," Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama advisor, bragged to investors in 1999.



2000: Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the "special status". Democrats raised a ruckus as did Fannie and Freddie, headed by politically connected CEO's who knew how to reward and punish. "We think that the statements evidence a contempt for the nation's housing and mortgage markets" Freddie spokesperson Sharon McHale said. It was the last chance during the Clinton era for reform.



2001: Republicans try repeatedly to bring fiscal sanity to Fannie and Freddie but Democrats blocked any attempt at reform; especially Rep. Barney Frank and Sen.Chris Dodd who now run key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants.



2003: Bush proposes what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago". Even after discovering a scheme by Fannie and Freddie to overstate earnings by $10.6 billion to boost their bonuses, the Democrats killed reform.



2005: Then Fed chairman Alan Greenspan warns Congress: "We are placing the total financial system at substantial risk". Sen. McCain, with two others, sponsored a Fannie/Freddie reform bill and said, "If congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole". Sen. Harry Reid accused the GOP ;of trying to "cripple the ability of Fannie and Freddie to carry out their mission of expanding homeownership" The bill went nowhere.



2007: By now Fannie and Freddie own or guarantee over HALF of the $12 trillion US mortgage market. The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working with Wall St. to repackage the bad loans and sell them to investors. As the housing market fell in '07, subprime mortgage portfolios suffered major losses. The crisis was on, though it was 15 years in the making.



2008: McCain has repeatedly called for reforming the behemoths, Bush urged reform 17 times. Still the media have repeated Democrats' talking points about this being a "Republican" disaster. A few Republicans are complicit but Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats. That's why taxpayers are now being asked for $700 billion!!



If you doubt any of this, just click the links below and listen to your lawmakers own words. They are condeming!



http://www.youtube.com/watch?v=68D9XrqyrWo&feature=related#



http://www.youtube.com/watch?v=pIgqfM5C8lY#



http://www.youtube.com/watch?v=H9juJr8CSY4&feature=related#



Postscript: ACORN is one of the principle beneficiaries of Fannie/ Freddie's slush funds. They are currently under indictment or investigation in many states. Barack Obama served as their legal counsel, defending their activities for several years.

Did You Hear About Our Brave Heros

Did You Know

Some of you may have already seen this. For those of you that have not seen this, it is because main stream America news decided not to talk about it. Fox did show and talk about it, but not near enough. On July 4th 2008 at Al Faw Palace Bagdad, Iraq. General Petraeus officiated the largest re-enlistment of 1,215 solders ceremony in military history.

American men and women volunteering to stay longer in Iraq, so that when they leave the new democracy will have a better chance of surviving.

A Chicago Pizzeria donated 2,000 pizzas. The press did report the 2,000 pizzas being sent to Iraq but not the reason why.

Let a bomb explode in a market killing two people and it’s all over the news.
Why is McCain or Palin not talking about this when Obama is so critical of our brave solders?
Bob