Wednesday, December 30, 2009

Vampire Capitalism

With the crash and resuscitation of finance capitalism and its fordist counterpart (auto and other manufacturers) by the state and with the popularity of vampires in consumer culture I thought I would add some links on vampiric capitalism and the vampire state in light of my 2005 article; Gothic Capitalism, which I would like to point out has been published in Slovinian by anarchist comrades in Serbia.

Marx of course was writing in the era of the popular vampire novels while Dr. Polidori first published a vampire novel, and Sheridan Le Fanu published his vampire short story, it was Dracula, that had a larger popular impact with mass publication of the book and its follow up as a stage play.

Marx identifies capital as dead labour living off the life force of the working class a class it created for its own ends (thus the later zombie motif that has also increased in popularity in mass culture during this captialist crisis, see my Gothic Capitalism for more on this)

The notion of vampire as symbol of capitalist oppression is certainly not original
to Stoker, who was doubtlessly influenced by or at least aware of the works of Karl Marx and other socialists who considered the vampire something of a patron saint to capitalists.
Discussing Marx, critic Andrew Smith says his “rhetorical fulcrum in this respect relies on an imaginative juxtaposition with images drawn from the pre-capitalist world. Hence, it is no coincidence that he keeps coming back to these occult pictures”. Or as Ken Gilder writes in his book Reading the Vampire, “modern capitalism here is by its very nature excessive, driven by‘irresistible force’ to consume and accumulate. Marx draws on the metaphor of the vampire timeand again to describe its processes”.
Critic Steve Shaviro gives us an even more detailed view of Marx’s use of the vampire motif, More generally, vampires and zombies are vital (if that is the right word) to the functioning of capitalist society. Traditional Marxist theory, of course, focuses onvampires. Marx himself famously describes capital as ‘dead labor which, vampirelike,lives only by sucking living labor, and lives the more, the more labor it sucks’ .

In the nineteenth century the Gothic Revival also found itself central to
political and cultural debates. In Victorian England, the gothic suburban villa
empowered the middle classes and the building of Houses of Parliament made a
statement about ‘making a nation’ and creating a national identity. John Ruskin
attacked Marx and Engel’s ideology through his writings about the Gothic and
William Morris championed the Arts and crafts movements while attacking the great Gothic Revival perpetuated by practitioners such as George Gilbert Scott as bringing about capitalism.

Karl Marx

Capital Volume One
Chapter Ten: The Working-Day

Capital is dead labour, that, vampire-like, only lives by sucking living labour, and lives the more, the more labour it sucks.

Constant capital, the means of production, considered from the standpoint of the creation of surplus-value, only exist to absorb labour, and with every drop of labour a proportional quantity of surplus-labour. While they fail to do this, their mere existence causes a relative loss to the capitalist, for they represent during the time they lie fallow, a useless advance of capital. And this loss becomes positive and absolute as soon as the intermission of their employment necessitates additional outlay at the recommencement of work. The prolongation of the working-day beyond the limits of the natural day, into the night, only acts as a palliative. It quenches only in a slight degree the vampire thirst for the living blood of labour. To appropriate labour during all the 24 hours of the day is, therefore, the inherent tendency of capitalist production.

It must be acknowledged that our labourer comes out of the process of production other than he entered. In the market he stood as owner of the commodity “labour-power” face to face with other owners of commodities, dealer against dealer. The contract by which he sold to the capitalist his labour-power proved, so to say, in black and white that he disposed of himself freely. The bargain concluded, it is discovered that he was no “free agent,” that the time for which he is free to sell his labour-power is the time for which he is forced to sell it, that in fact the vampire will not lose its hold on him “so long as there is a muscle, a nerve, a drop of blood to be exploited.”

The Grundrisse

Capital posits the permanence of value (to a certain degree) by incarnating itself in fleeting commodities and taking on their form, but at the same time changing them just as constantly; alternates between its eternal form in money and its passing form in commodities; permanence is posited as the only thing it can be, a passing passage — process — life. But capital obtains this ability only by constantly sucking in living labour as its soul, vampire-like.

The Eighteenth Brumaire of Louis Napoleon Chapter 7

But in the course of the nineteenth century the urban usurer replaced the feudal one, the mortgage replaced the feudal obligation, bourgeois capital replaced aristocratic landed property. The peasant's small holding is now only the pretext that allows the capitalist to draw profits, interest, and rent from the soil, while leaving it to the agriculturist himself to see to it how he can extract his wages.

The bourgeois order, which at the beginning of the century set the state to stand guard over the newly emerged small holdings and fertilized them with laurels, has become a vampire that sucks the blood from their hearts and brains and casts them into the alchemist's caldron of capital.

Capitalism originates in Gothic Culture and the fact that it now has reached its historic epoch, it's tendrils now encapsulate the entire globe, unlike any other time in history. Its commidification of our lives is now complete, hence the growth of the mass culture of consumption that is mirrored in the popularity of vampires and zombies as cultural motifs are the visions of ourselves alienated from our humanity, they are the ultimate consumers.

Robert Park, later sociology chair at the University of Chicago, took a more global
perspective on the phenomenon of “vampiric capitalism,” in his journalistic critiques of western exploitation within Africa, both of its peoples and resources (Lyman, 1992). American sociology, after the 1920s, would reject the use of both journalistic and philosophical analyses of evil for a more thoroughly scientific methodology (Greek, 1992). However, the discipline then was left with great difficulties in discussing evil (now referred to as deviance) without transvaluing it as sickness (Menninger, 1973) or as sign of social malaise or anomie (Orru,1987), leaving treatises on the nature of evil to more ethnographically inspired writings such as criminal biographies, novels, plays, and ultimately screenplays.

Popular culture now has labeled the latest capitalist crisis as a problem of both vampire banks and zombie banks. How fitting. America no longer manufactures goods for the world, that capitalist role is now being played out by China. Under Reagan America became a consumer of credit and goods, and thus has a zombie economy.

Zombies reproduce through consumption of the living, which serves as a nearly endless supply of brother and sister Zombies. Consider earth’s current human population explosion as a metaphoric never-ending supply of both brains and new Zombies. As one character in the original Dawn says when warning survivors of the process: "It gets up and kills. The people it kill get up and kill." It’s a never-ending supply of both consumables and consumers (a capitalist dream). But, of course, the perishable items (bread and bullets) in the mall run out. And when they do, survivors need to make very difficult choices. Where’s the next mall? What place do we pillage next? An island, perhaps?

As today and in the Zombie world, sustainability and survival are interchangeable. When the resources for survival run out and the malls have been picked clean, then we will reach for sustainability as a final solution. Or we will eat brains.
Simply put Capitalism, zombie or vampire, sucks!

Check out this fun blog;Vampire Capitalism

Monday, October 19, 2009

Today Is Election Day

Bill C-16

Subject to an earlier dissolution of Parliament, a general election must be held on the third Monday in October in the fourth calendar year following a previous general election, with the first general election to be held on Monday, October 19, 2009.

Well okay it should have been today, except that Harper took us into an election early, violating his own law. Instead in a cynical ploy to grab power the Harpocrites ran an election saying there was no recession, they would not raise taxes nor would they have a budget my how things changed after they were elected with another minority government and the economy crashed.

Harper then prorogued the government within two months of that election in order to avoid being ousted by an opposition coalition, while still denying there was a recession.

Today with the threat of another election still in the air one has to ask why the rush last fall if not for the fact that actually the Harpocrites have been ready for an election since they won a minority in 2006. Every day is election day for them. They are not ruling as a government but as a party running a party campaign around the economic issues they denied were a reality last fall.


However if we take the PM at his own word well perhaps we should have had an election today. But that's just a technicality...

Harper says recession is no time for an election -

Harper says recession over only in technical sense

And despite all the political platitudes offered at the time it turns out that Canada's fixed election date did turn out to be an illusion........

Bill C-16 on Fixed Date Elections
November 06, 2006

Third Reading in the House of Commons

House of Commons, Ottawa
Monday, November 6, 2006
Check Against Delivery


Mr. Speaker, I am very pleased to begin debate in third reading on Bill C-16 – An Act to amend the Canada Elections Act – which would provide for fixed date elections.

First of all, I would like to note that the Bill was carefully reviewed by the Standing Committee on Procedure and House Affairs.

A range of expert witnesses has appeared before the Committee and much discussion has taken place.

The Committee heard from the Chief Electoral Officer, representatives of political parties, academic experts, as well as me.

While I have been informed that there were lively debates on key issues, I am pleased to note that Bill C-16 carried in Committee without amendment.

Moreover, while there were some minor differences on some of the details of the Bill, I was struck by the fact that all parties represented in the House of Commons support the fundamental rationale of the Bill.

I believe that all parties share the view that elections belong, fundamentally, to citizens. They belong, Mr. Speaker, to the people.

All parties agreed with the principle that the timing of elections should not be left to the prime minister but should be set in advance so that all Canadians will know when the next election will occur.

Mr. Speaker, today I will begin with a description of the current process for calling general elections and I will discuss some of the difficulties associated with it.

This will be followed by a discussion of the many advantages associated with fixed date elections.

Finally, Mr. Speaker, I will be very pleased to present the specifics of Bill C-16.

Current Process

Today, it is the prerogative of the Prime Minister, whose government has not lost the confidence of the House of Commons, to determine what he or she regards as a propitious time for an election to renew the government’s mandate.

The Prime Minister then requests dissolution of the House from the Governor General and, if the Governor General agrees, he or she proclaims the date of the election.

What we have, Mr. Speaker, is a situation where the Prime Minister is able to choose the date of the general election, not based on what is in the best interest of the country, but what is in the interest of his or her party.

Bill C-16 will address this problem and will produce a number of other benefits.

Advantages of Fixed Date Elections

Mr. Speaker, before going into the details of the bill, allow me to discuss the key advantages of fixed date elections.

Fixed date elections will provide for greater fairness in election campaigns, greater transparency and predictability, improved governance, higher voter turnout rates, and will help in attracting the best qualified candidates to public life.


First of all, allow me to discuss the issue of fairness.

Fixed date elections will help to level the playing field for those seeking election in a general election.

With fixed date elections, the timing of general elections will be known to all.

Since the date of the next election will be known to all political parties, each party will have an equal opportunity to make preparations for upcoming election campaigns.

Instead of the governing party having the advantage of determining when the next election will take place – an advantage they may have over the other parties for several months – all parties will be on an equal footing.

And it’s only fair that each party will have equal time to prepare for the next election and know when it will be.

Transparency and Predictability

Another key advantage of fixed date elections is transparency.

Rather than decisions about election dates being made behind closed doors, general election dates will be set in advance as prescribed by this bill.

Once this bill is passed, the date of each election will be known by all Canadians.

Predictability is also a key advantage of fixed date elections.

Canadians and political parties alike will be able to rely on our democratic election system working in an open and predictable fashion for all general elections.

Plans can be made on a reliable basis to prepare for, and respond to, fixed date elections.

Improved Governance

Mr. Speaker, fixed date elections will allow for improved governance.

For example, fixed date elections will provide for improved administration of the electoral machinery by Elections Canada.

The Chief Electoral Officer, in majority situations, will know with certainty when the next election will occur and will be able to plan accordingly.

This will almost certainly involve greater efficiency at Elections Canada and will, therefore, very likely save money for taxpayers.

Political parties will also likely save money as they will not have to remain on an ‘election footing’ for extended periods of time.

Moreover, fixed date elections will allow for better parliamentary planning.

For example, members of parliamentary committees will be able to set out their agendas well in advance, which will make the work of committees, and Parliament as a whole, more efficient.

Higher Voter Turnout Rates

Yet another reason for adopting fixed date elections is that this measure will likely improve voter turnout because elections will be held in October, except when a government loses the confidence of the House.

The weather is generally favourable in most parts of the country.

Fewer people are transient. So, for example, most students will not be in transition between home and school at that time and will be able to vote.

Moreover, seniors will not be deterred from voting as they might be in colder months.

And, of course, citizens will be able to plan in advance to participate in the electoral process, arranging for advanced voting if they plan to be away.

An additional benefit is that pre-election campaigns to ‘get out the vote’ will be able to be well prepared, as the organizers will be aware of exactly when the next general election will take place.


Finally, I want to mention an advantage that will have resonance to many of those in this chamber.

It is a difficulty with the current system that I have witnessed personally (and something I have mentioned in interviews when Bill C-16 was first introduced).

Fixed date elections will help to attract many of the best qualified Canadians into public life because it will be easier to plan their own schedules to enable them to stand for election.

For many of our most talented Canadians, unfixed election dates make it difficult to plan to enter public life because they simply don’t know when the next election is going to be held.

I think fixed date elections can only help in attracting the most qualified individuals to public life.

Details of the Bill

Mr. Speaker, I would like to turn to the details of the bill.

1. Responsible Government

Legislation providing for fixed date elections must be structured to meet certain constitutional realities of responsible government. They include:

• the requirement that the government have the confidence of the House of Commons;

• respecting the Governor General’s constitutional power to dissolve Parliament.

The bill before us was drafted carefully to ensure that these constitutional requirements continue to be respected.

So, the bill does not in any way change the requirement that the government must maintain the confidence of the House.

Moreover, all of the conventions regarding loss of confidence remain intact.

In particular, the Prime Minister’s prerogative to advise the Governor General on the dissolution of Parliament is retained, to allow him or her to advise dissolution in the event of a loss of confidence.

Moreover, the bill states explicitly that the powers of the Governor General remain unchanged, including the power to dissolve Parliament at the Governor General’s discretion.

2. Modeled After Provincial Legislation

As set out in the government’s platform, this bill is modeled after existing provincial fixed date elections legislation.

The legislation is very similar to the approach used by British Columbia, Ontario and Newfoundland and Labrador.

Mr. Speaker, it should be noted that the legislation in all of these provinces is working – and working well.

British Columbia recently had its first fixed date election (May 17, 2005) and Ontario and Newfoundland and Labrador will soon have their first fixed date elections (October 4, 2007 and October 9, 2007 respectively).

In British Columbia, there was certainly no evidence of what some critics have called a “lame duck government”.

3. Mechanics

The government’s bill provides that the date for the next general election is Monday, October 19, 2009.

Of course, this will be the date only if the government is able to retain the confidence of the House until that time.

So, for example, if the government were to be defeated tomorrow, a general election would be held according to normal practice.

However, the subsequent election would be scheduled for the third Monday in October, in the fourth calendar year after that election.

And that is the normal model that would be established by this bill.

General elections will occur on the third Monday of October in the fourth calendar year following the previous general election.

We chose the date very carefully and one of my parliamentary colleagues will provide a full explanation of our choice during the course of this debate.

However, in brief, we chose the third Monday in October because it was the date that was likely to maximize voter turnout and to be least likely to conflict with cultural or religious holidays – or with elections in other jurisdictions.

4. Conflicts

This raises an additional feature of the bill that I want to bring to your attention – a feature that provides for an alternate election date in the event of a conflict with a date of religious or cultural significance or an election in another jurisdiction.

In the current system, the date of the general election is chosen by the government, so it is rare that a polling day is chosen that comes into conflict with a date of cultural or religious significance or with elections in other jurisdictions.

However, with the introduction of legislation providing for fixed date elections, there is some possibility that, in the future, the stipulated election date will occasionally be the same as a day of cultural or religious significance or an election in another jurisdiction.

The Ontario fixed date elections legislation provides that, if there is a conflict with a day of cultural or religious significance, the Chief Elections Officer may recommend an alternate polling day to the Lieutenant Governor in Council, up to seven days following the day that would otherwise be polling day.

Using a variation of the Ontario legislation providing for fixed date elections, our bill empowers the Chief Electoral Officer to recommend an alternate polling day to the Governor in Council should he or she find that the polling day is not suitable for that purpose.

The alternate day would be either the Tuesday or the Monday following the Monday that would otherwise be polling day.

Allowing alternate polling days to be held on the following Tuesday or Monday is consistent with the current practice of holding elections on a Monday or a Tuesday.

Illusory in Nature?

Mr. Speaker, some Opposition members had concerns that this bill is illusory in that the Prime Minister can call an election at any point up until the fixed date for the election.

However, Mr. Speaker, the Prime Minister has to retain his prerogative to advise dissolution to allow for situations when the government loses the confidence of the House.

This is a fundamental principle of our system of responsible government.

Moreover, if the bill were to indicate that the Prime Minister could only advise dissolution in the event of a loss of confidence, it would have to define ‘confidence’ and the dissolution of the House of Commons would be justiciable in the courts – something that we certainly do not want.


Mr. Speaker, this bill providing for fixed date elections is long overdue in Canada.

In June, Ipsos-Reid released the results of a poll which showed that 78% of Canadians support the government’s plans to provide for fixed date elections.

You may know that the third week in October is already Citizenship Week in this country where we celebrate what it means to be Canadian citizens.

Of course, fundamental to being a Canadian citizen is our civic responsibilities, including our duty to vote.

It is fitting, then, that general election dates will be set for the third Monday in October.

This legislation will provide greater fairness, increased transparency and predictability, improved policy planning, increased voter turnout, and will help to attract the best qualified Canadians to public life.

I hope my colleagues on both sides of the House will join with me in supporting it and I look forward to the Bill’s speedy passage in the Senate.

Thank you, Mr. Speaker.

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Sunday, October 18, 2009

US Protects Chinese Investments

There are more mercenary forces, euphemistically called 'contractors', in the American war zones of Iraq and Afghanistan then regular U.S. armed forces. They will remain behind when regular U.S. forces withdraw.

Mercenaries today operate in Iraq and Afghanistan, supplementing U.S. troop strength and guarding diplomats. In the spring of 2008, 180,000 private contractors worked in Iraq; by the spring of 2009, 68,200 were operating in Afghanistan. These “soldiers of fortune” treat each new posting as a “tour of duty” (a term used by a former Blackwater employee working in Afghanistan). Their deaths and casualty numbers are not included in the official Department of Defense numbers.

According to new statistics released by the Pentagon, with Barack Obama as commander in chief, there has been a 23% increase in the number of “Private Security Contractors” working for the Department of Defense in Iraq in the second quarter of 2009 and a 29% increase in Afghanistan, which “correlates to the build up of forces” in the country.

However the irony is that even the regular US forces are now acting not in defense of American idealism but in the pragmatic protection of Chinese foreign investments in these countries.

Of course the Americans will deny they are merely cops for China but after all they are in debt to China and as the old saying goes; he who pays the piper....

China cut its US Treasury-bill reserve by $3.4 billion to $797.1 billion in August, though it remained the largest foreign holder of US T-bills

When America reduces its regular armed forces in these war zones the mercenaries will be left behind to protect corporate interests not only American but Chinese.


China showed little interest in Afghanistan throughout the 20th century but its growing energy and natural resource demand combined with increasing Afghan openness to foreign investors have alerted Beijing of the country’s potentials. This growing interest was particularly manifested with Beijing’s giant $3.5 billion investment in Afghanistan’s Aynak copper field late last year, the far largest foreign direct investment in Afghanistan’s history. Reports from Kabul also indicate that additional Chinese investments are underway. Although these investments may be the engine in Afghanistan’s economy, the Chinese piggy-backing on ISAF’s stabilization effort is bound to be unpopular in the U.S. and Europe, though not necessarily with the Afghan government.

America fights, China profits?
In making the case for converging U.S. and Chinese interests in Afghanistan, Robert Kaplan wrote last week in a New York Times opinion piece that, "The problem is that while America is sacrificing its blood and treasure, the Chinese will reap the benefits. The whole direction of America’s military and diplomatic effort is toward an exit strategy, whereas the Chinese hope to stay and profit."

In the op-ed, titled "Beijing’s Afghan Gamble," Kaplan also noted, "China will find a way to benefit no matter what the United States does in Afghanistan. But it probably benefits more if we stay and add troops to the fight."

No doubt the discussion will boil over after James Yeager, an American geologist, and former congressman Don Ritter, who has an advanced degree in metallurgical engineering and studied in Moscow, hold a press briefing in Washington on Thursday. The event is provocatively titled, "Report on the Aynak Copper Tender in Afghanistan: How China Won and the West Lost."

China Has Great Potential To Invest In Afghanistan: Interview With First Secretary Of Afghan Embassy In China

Q: On Nov. 20 in 2008, the Afghan Industry and Mines Minister, Ibrahim Adil divulged the name of the winner in the tender for the largest Aynak copper mine. The China Metallurgical Group company, offering $3 billion, won the tender. Did this Chinese company make investments? How do you evaluate the future relations between Afghanistan and China?

A: Yes, the Chinese company has made these investments, and on July 10, the ceremony took place to mark the start of production of copper at the Aynak mine. This is the biggest investment in Afghanistan. If we take into account the number of the unused mines in Afghanistan, it will become apparent that China has huge potential for investment in Afghanistan. Along with the increase of China's influence in the region, it will serve peace and stability in the region as a whole.

Q: China and the United States are the strategic and economic rivals. What can You say about the impact of this rivalry on Afghanistan?

A: The United States and China are working closely together in Afghanistan. Currently, Afghanistan has become a center of international cooperation. China is friendly neighbor for Afghanistan. Afghanistan is an independent country and determines how to build relations with other states. On the other hand, our strategic allies support the economic development of Afghanistan and the whole region, including China.

Q: China, taking advantage of its position and opportunities, helps Afghanistan to join the Shanghai Cooperation Organization (SCO). Is China concerned about the presence of NATO in Afghanistan?

A: China is a neighboring country that has never had problems with Afghanistan and, therefore, intends to increase cooperation with our country. China supports Afghanistan's political development. China's investment in Afghanistan's various projects can testify this fact. We invite China to invest. Creating a "trade corridor" will further develop relations.

With regard to the NATO presence, I can say that the alliance troops are in Afghanistan under the UN Security Council resolutions. China is also a member of the UN Security Council. As to China's concern about the presence of NATO in Afghanistan, I can say that we do not feel such concern. China supports the presence of international forces in Afghanistan because it actively fights against terrorism, which is a threat throughout the region.

Global Implications of China’s Big Investment in Iraq and Afghanistan

Helena Cobban

This article assesses the significance of China’s recently announced investments in large copper and oil development in Afghanistan and Iraq respectively, with potential significance not only for development and peace in the two war-torn nations, but also for China’s global role and the US-China relationship. With foreign and domestic investment in both nations barely trickling in despite UN, World Bank, NATO and US efforts, the Chinese plans are highly significant.

They are indicative not only of China’s aggressive search for energy and resource development opportunities, but also of a shift in US goals in the two countries: while all signs pointed to earlier US attempts to monopolize control of Iraqi oil for American companies, under present strategic conditions, the US appears to more than welcome the Chinese initiative.

Chinese firms eye Iraq oil fields

2009-10-09 10:45 BJT

Oil contracts could spell a win-win situation for both China and Iraq. The contract for Rumaila is key to Iraqi plans to breathe new life into a sector rich in reserves, but desperate for foreign cash to overhaul broken down facilities and obsolete practices. While Chinese oil giants are seizing the opportunity to invest and expand overseas.

Iraq has proven crude reserves of 115 billion barrels, ranking number three in the world after Saudi Arabia and Iran. But among the 80 oil fields, only 20 have been developed. Iraq opened its oil fields to foreign companies for the first time in June this year, putting six oil fields and two gas fields on auction. Many bidders turned up. But with many put off by instability in local security, only Rumaila found partners.

The Iraqi government says the second round of bidding for oil contracts is due in the first half of December. And the government says it's committed to offering better security and all facilities needed for investments by foreign companies. Meanwhile, Chinese oil giants are also expanding investment in the country. Earlier this year, China's largest oil refiner Sinopec bought Addax Petroleum for about seven-and-a-quarter billion US dollars, to secure the Swiss oil explorer's high-potential oil blocks in West Africa and Iraq.

Iraqi worker operates valves at Rumaila oil field, near Basra, southern Iraq, file pic from 2005
The Rumaila project aims to increase output at the field by 2m barrels a day

Iraq's cabinet has ratified a deal with two foreign energy companies to develop the giant southern oilfield in Rumaila.

The contract with Britain's BP and CNPC of China is the first major deal with foreign firms to be signed since an international auction in June.

Iraqi crude deal 'boost' for China's oil security quest

The successful joint bid by BP and China National Petroleum Corp (CNPC) to develop an oilfield in Iraq has offered unique opportunities for the Chinese company to tap crude reserves in the oil-rich nation, analysts said yesterday.

But domestic oil producers should prepare themselves well for any uncertainties in the war-torn country, which boasts of the third-largest oil reserves in the world, they added.

Iraq on Tuesday made its first auction of major oil contracts since the 2003 US-led invasion. A consortium by BP and CNPC was finally awarded a contract to develop the Rumaila oilfield, the largest of six oil and two natural gas fields in the bidding.

The BP-CNPC group beat a bid from a consortium by Exxon Mobil and Malaysia's Petronas for the oilfield. It was the only successful bid in Tuesday's auction.

Besides CNPC, China's two other oil majors, Sinopec and CNOOC also took part in Tuesday's auction.

Rumaila is the workhorse of Iraq's oil sector, with a current capacity of 1.1 million barrels per day (bpd) out of Iraq's total national output of 2.4 million bpd.

With a foothold in Iraq, China can diversify its oil supplies to enhance energy security, said Lin Boqiang, professor, Xiamen University, adding that the consortium model can reduce risks both for BP and CNPC.

China, which became a net oil importer 16 years ago and which relies on imported oil for nearly half its requirement currently, has already seen domestic production peaking, said Lin. "The increase in China's oil consumption in future may all come from overseas oil reserves."


China Burps Greenspan Farts Dow Hiccups

China: The Triumph of State Capitalism

China No Longer Red Nor In The Red

US vs China for Global Hegemony

Neo-Liberal State Capitalism In Asia

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Saturday, October 17, 2009

Public Pension Funds Hedge Fund Rip Off

Here is another case of a publicly funded Canadian public sector pension fund being used to take over a U.S. company forced into bankruptcy by private hedge funds. The teachers in Ontario who are shareholders in the Ontario Teachers Pension Fund have no say in their pension investments.

In fact none of us have any say in our pension funds and how they are invested. I wonder if the shareholders in the Ontario Teachers Pension fund will sleep easy knowing that their money is being used to payout a corporate hedge fund shark that led this company into bankruptcy in order to satiate their greedy need for profits.

The irony of all this of course is that the use of the vast pool of pension capital that these private hedge funds need to use to back up their deals is of course social capital as I have pointed out here before. In fact you could call this socialism by any other name if you worked for the Fox network.

The Ontario Teachers’ Pension Plan has gotten in bed with Simmons Co., agreeing to buy the struggling company’s bedding unit in a $760-million cash-and-share deal.

Two of the world's largest mattress makers are jumping into bed together, with Simmons Co. and its iconic Beautyrest products joining Serta Mattresses in the Ontario Teachers' Pension Plan portfolio.

By taking the mattress maker out of bankruptcy protection, Teachers and its partner Ares Management LLC will become the largest player in a traditionally recession-proof industry, which has been ravaged by the credit crunch.In Simmons, the pension fund is buying a 139-year-old company that has now seen six private equity owners since being taken private 20 years ago.

The mattress maker began seeking a way to restructure its $1-billion (U.S.) debt earlier this year, as sales skidded 19 per cent. The prepackaged bankruptcy restructuring plan announced yesterday will cut debt to $450-million, with Teachers and its partner paying $760-million for Simmons Bedding Co., its U.S. subsidiaries and parent company Bedding Holdco Inc. Simmons Co.

Deal worth $760M U.S. part of restructuring to create world's largest mattress company

By Caroline Humer, Reuters

Mattress makers Simmons and Serta are planning to dethrone competitor Sealy as the world's largest mattress company in a $760-million U.S. deal that includes Simmons filing for bankruptcy.

Simmons Co. said Friday that it has put together a restructuring plan to be sold to private-equity firm Ares Management LLC and a unit of the Ontario Teachers' Pension Plan, which owns competitor Serta.

Together, Serta and Simmons, which will continue to operate as separate companies and brands, will have a bigger share of the market than world leader Sealy Corp.

Simmons, which is owned by private equity firm Thomas H. Lee, has been negotiating with lenders and creditors since late 2008 as a heavy debt load and a decline in demand squeezed its profits and caused it to miss financial targets required by a loan associated with its 2003 buyout.

The company said the pre-packaged restructuring plan has more than the two-thirds support from its noteholders and lenders needed and will reduce its debt to about $450 million from $1 billion.

The deal includes about $310 million in new equity from Serta's owners.

The company will put the plan out to a vote soon and expects to file for bankruptcy in 30 to 60 days, a Simmons spokesman said. The bankruptcy could then take up to an additional two months, he said.

Under the plan, senior bank lenders, trade vendors, suppliers and employees will be repaid in full.

Holders of senior subordinated notes will receive 95 per cent on the principal amount due or $190 million and holders of discount notes in the holding company will receive a payout of $15 million on the $269 million in principal, a company spokesman said.

Investors in a $300-million loan that was taken out in 2007 will not be repaid as part of the financial restructuring plan.

The loan, like the discount notes, paid dividends to its owner.

The mattress industry has been attractive to private equity buyers because of the steady cash flow the businesses had provided before the recent broad decline in consumer spending.

Sealy is owned by buyout firm Kohlberg Kravis Roberts & Co. It also restructured its debt earlier this year. The downturn has reached out across the mattress sector.

Foamex International Inc., a maker of polyurethane foam used in mattresses; Consolidated Bedding Inc, which makes the Spring Air mattress brand; and retailers including 1-800-Mattress and Mattress Discounters Corp have all filed for bankruptcy.

As of June 27, the Simmons said it had $896 million in assets and $1.26 billion in liabilities, according to regulatory filings.

It said it had $67 million in cash.

Profits for Buyout Firms as Company Debt Soared

Simmons says it will soon file for bankruptcy protection, as part of an agreement by its current owners to sell the company — the seventh time it has been sold in a little more than two decades — all after being owned for short periods by a parade of different investment groups, known as private equity firms, which try to buy undervalued companies, mostly with borrowed money.

For many of the company’s investors, the sale will be a disaster. Its bondholders alone stand to lose more than $575 million. The company’s downfall has also devastated employees like Noble Rogers, who worked for 22 years at Simmons, most of that time at a factory outside Atlanta. He is one of 1,000 employees — more than one-quarter of the work force — laid off last year.

But Thomas H. Lee Partners of Boston has not only escaped unscathed, it has made a profit. The investment firm, which bought Simmons in 2003, has pocketed around $77 million in profit, even as the company’s fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping run it. Last year, the firm even gave itself a small raise.

Wall Street investment banks also cashed in. They collected millions for helping to arrange the takeovers and for selling the bonds that made those deals possible. All told, the various private equity owners have made around $750 million in profits from Simmons over the years.

How so many people could make so much money on a company that has been driven into bankruptcy is a tale of these financial times and an example of a growing phenomenon in corporate America.

Every step along the way, the buyers put Simmons deeper into debt. The financiers borrowed more and more money to pay ever higher prices for the company, enabling each previous owner to cash out profitably.

But the load weighed down an otherwise healthy company. Today, Simmons owes $1.3 billion, compared with just $164 million in 1991, when it began to become a Wall Street version of “Flip This House.”

In many ways, what private equity firms did at Simmons, and scores of other companies like it, mimicked the subprime mortgage boom. Fueled by easy money, not only from banks but also endowments and pension funds, buyout kings like THL upended the old order on Wall Street. It was, they said, the Golden Age of private equity — nothing less than a new era of capitalism.

These private investors were able to buy companies like Simmons with borrowed money and put down relatively little of their own cash. Then, not long after, they often borrowed even more money, using the company’s assets as collateral — just like home buyers who took out home equity loans on top of their first mortgages. For the financiers, the rewards were enormous.

Twice after buying Simmons, THL borrowed more. It used $375 million of that money to pay itself a dividend, thus recouping all of the cash it put down, and then some.

A result: THL was guaranteed a profit regardless of how Simmons performed. It did not matter that the company was left owing far more than it was worth, just as many people profited from the mortgage business while many homeowners found themselves underwater.

Investors who bought that debt are getting virtually nothing in the new deal.

“From my experience, none of the private equity firms were building a brand for the future,” said Robert Hellyer, Simmons’s former president, who worked for several of the private equity buyers before being asked to leave the company in 2005. “Plus, the mind-set was, since the money was practically free, why not leverage the company to the maximum?”

Just as with the housing market, the good times ended when the economy fell into recession and the credit markets froze. Simmons is now groaning under a huge amount of debt at a time when its sales are slowing. And this time there is no escaping by finding yet another buyer willing to shoulder its entire burden.

Simmons is one of hundreds of companies swept up by private equity firms in the early part of this decade, during the greatest burst of corporate takeovers the world has ever seen. Many of these deals, cut in good times, left little or no margin for error — let alone for the Great Recession.

A disproportionate number of the companies that were acquired during that frenzy are now struggling with the enormous debts. More than half the roughly 220 companies that have defaulted on their debt in some form this year were either owned at one time or are still controlled by private equity firms, according to analysts at Standard & Poor’s. Among them are household names like Harrah’s Entertainment and Six Flags, the theme park operator.

From its humble beginnings on the banks of Lake Michigan, Simmons grew to become one of the country’s largest manufacturers of mattresses. Along the way, it even sprinkled a little Hollywood pixie dust on the ho-hum mattress business, hiring Dorothy Lamour and Maureen O’Hara to plug its products.

Until the 1970s, Simmons largely prospered. Then the troubles started, and the company was soon buried deep inside two enormous conglomerates, Gulf & Western and the Wickes Corporation, for a number of years.

But in the mid-1980s, Simmons caught the attention of a new type of investor. The businesses that stormed corporate America in recent years under the banner of private equity were not always called private equity firms. In the 1980s, they were known as leveraged buyout shops. Their strategy is essentially unchanged, however: they try to buy undervalued companies, using mostly borrowed money, fix them up and sell them for a fast profit.

Because they pile debt onto the companies they buy, the firms free up their own cash, allowing them to make additional investments and increase their potential profits.

Simmons’s first trip through the revolving door of private equity came in 1986. Like the latest trip, it was not a pleasant one for employees, but the buyers did just fine.

William E. Simon, a private equity pioneer and a Treasury secretary under President Richard M. Nixon, was the man with the golden touch. In 1986, his investment firm, Wesray Capital, and a handful of Simmons’s top managers acquired the company for $120 million, the bulk of which was borrowed. After selling several businesses to pay back some of the money it had borrowed, Wesray cashed out in 1989. It sold Simmons to the company’s employee stock ownership plan for $241 million — twice what it paid just three years earlier.

The deal was a fiasco for the employees. As part of the buyout, Simmons stopped contributing to its pension plan, since the stock ownership plan shares were meant to pay for the employees’ retirements. But then the bottom fell out of the housing market and Simmons, with its large debt, stumbled. Its pensions crumbled as the value of the stock plan shares plunged.

A succession of private equity buyers came and went. Merrill Lynch Capital Partners bought Simmons in 1991 for $32 million for a 60 percent stake in the company and the assumption of its debt. Merrill sold it to Investcorp, an investment group based in Bahrain, for $265 million in 1996. Two years later, Investcorp sold the company to Fenway Partners for $513 million.

The fall of 2003 was little more than a blur of meetings and presentations for Robert Hellyer, the former Simmons president who is among the fourth generation of his family involved in the mattress industry. In eight weeks, the company was shown to 20 private equity suitors in the corporate version of speed dating.

The list of potential buyers was quickly whittled to three and finally to THL, whose $1.1 billion bid for the company consisted of $327 million in new equity from the firm and more than $745 million in bonds and bank loans that had to be raised from investors.

What THL wanted from the deal was a return of two to three times its initial investment.

From the get-go, the lofty price the firm paid for Simmons and the amount of debt raised red flags on Wall Street.

The “higher debt burden will limit the company’s ability to respond to unexpected negative business developments, including economic or competitive threats or internal missteps,” analysts at Moody’s Investors Service warned at the time.

But nobody, it seems, was listening. Six months after acquiring Simmons, THL set in motion plans to take the company public. And by December 2004, THL found a way to get part of its initial investment back. Simmons issued debt that required the company to pay a hefty 10 percent annual interest rate. The proceeds were used to pay THL a dividend of $137 million. With the company’s debt climbing, Simmons executives had to aim high with new products — and pray they were right.

By early 2007, at the very top of the credit market bubble, THL took a bit more out of Simmons. It created a holding company that it used to issue $300 million more in debt, which paid an additional $238 million dividend to the private equity firm. With that, THL had recouped its entire $327 million equity investment in Simmons and booked a profit of around $48 million. (It made an additional $28.5 million in various fees over the years.)

THL was hardly alone in undertaking this sort of financial engineering, known as a dividend recapitalization. From 2003 to 2007, 188 companies controlled by private equity firms issued more than $75 billion in debt that was used to pay dividends to the buyout firms.

The Impact on Employees

From the start, Noble Rogers loved working at Simmons.

“There were picnics, March of Dimes walks, Christmas parties, and we always had Halloween parties. It was a really family-oriented company,” Mr. Rogers, 50, recalled. “I told my wife that this was a great place for me to work. A great place for me to retire, to make a living at.”

For a long time, it was. For 22 years, Mr. Rogers worked at Simmons, the bulk of those years at a factory in Mableton, outside Atlanta. After operating the coiler machine for the company’s Beautyrest mattress, he moved into maintenance and kept all of the plant’s machinery humming.

Over the years, as Simmons passed from one private equity firm to another, and as Mr. Rogers became president of the local union at the plant, he saw little difference on the plant floor. Then, in the spring of 2008, when the slowing economy had begun to hurt sales, Simmons laid off the night shift at the Mableton plant. And on Sept. 18 that year, it gathered employees in the cafeteria to say that the plant was closing.

“So many people were hurt because they thought this was a great company to work for and they planned on spending the rest of their lives here. Their families were here. They bought houses and cars here,” Mr. Rogers recalled. “After this happened, people were really struggling.”

Between the closings and other cuts, Simmons let go of more than a quarter of its work force last year, said its chief financial officer, William S. Creekmuir.

Mr. Rogers, who received his union-negotiated severance package of two months’ pay, said he and other union representatives had tried to get a little more for workers, particularly those who would have been eligible for retirement. Simmons had a long history of giving retiring employees a bonus of $20 for each year worked and a free mattress set, Mr. Rogers said.

“They wouldn’t give us anything,” he said.

In the months after he lost his job, Mr. Rogers nearly lost his home to foreclosure and struggled to pay his family’s bills. Mr. Rogers, who eventually landed a job at an air filter company and picked up part-time work doing maintenance at an apartment complex, said Simmons bore little resemblance to the company he once loved.

“They stopped the picnics. They stopped the Christmas parties. They stopped the retirement parties,” he recalled. “That showed you the type of people I was working for. I just didn’t realize it until the hard times came like they did.”

For now, the Golden Age of private equity is over, the financiers say. In a speech to an industry gathering last spring. Mr. Schoen said that bankers and bondholders were reluctant to lend more money to the buyout kings.

“We’re in a brave new world,” he said. “We can’t go back to where we were, at least not in this investment cycle, and probably not in my career.”

But some private equity investors are searching for profits in the detritus of the buyout bust. Simmons hopes to emerge from bankruptcy in the hands of two new private equity firms. One is Ares Management, which owns the mattress giant Serta. Under the plan, Simmons’s debt would be more than halved, to $450 million, in part reflecting the losses suffered by its existing bondholders.

Simmons and its remaining employees face an uncertain future. Some in the industry predict Ares will eventually merge at least part of Simmons with Serta, jeopardizing more jobs.

“Simmons has been a cash cow. It’s made a lot of people a lot of money,” said David Perry, executive editor of Furniture/Today. “But there’s a growing question in the industry of how many more times can this be repeated. How much more juice can be squeezed out of the orange?”

Businesses as Commodities: The Nightmare at Beautyrest

By Kenneth Eisold
Fri, 09 Oct 2009 12:57:18 GMT

In our world almost anything can become a commodity. Still it came as something of a shock to read in last Sunday's New York Times how Simmons Bedding Co., a producer of some of our most comfortable commodities, was turned into a commodity itself and sliced, diced and mangled in the process.

The story in brief: Simmons, the manufacturer of Beautyrest mattresses, announced it will file for bankruptcy protection, "as part of an agreement by its current owners to sell the company -- the seventh time it has been sold in a little more than two decades." The Times goes on:
"But Thomas H. Lee Partners of Boston has not only escaped unscathed, it has made a profit. The investment firm, which bought Simmons in 2003, has pocketed around $77 million in profit, even as the company's fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping run it. Last year, the firm even gave itself a small raise.

Wall Street investment banks also cashed in. They collected millions for helping to arrange the takeovers and for selling the bonds that made those deals possible. All told, the various private equity owners have made around $750 million in profits from Simmons over the years."
On the other hand, the Times points out, this is devastating news for Simmons' employees, bondholders and other investors ("Profits for Buyout Firms as Company Debt Soared").

As citizens of our society, we tend to think that companies are primarily in business to produce goods and services that are useful and fairly priced. At the same time, we are dimly aware that, for the financial industry, businesses are commodities themselves -- to be exploited as much as possible for the financial gains they offer to those who buy and sell them, break them up, recapitalize them, and sell off their assets.

Private equity firms can determine if the business is overpriced or underpriced, has disposable assets, significant liabilities, is a good candidate for a takeover, and so forth. And, indeed, huge sums of money can be made by leveraging the assets of such companies, as the Simmons case illustrates. Usually the rest of us do not grasp what is going on behind the scenes, though we read about the acquisitions and sales, the name changes and mergers. The owners reap windfall profits, often ending up placing the companies in extremely exposed and vulnerable positions.

It would be like a homeowner who uses his home to back an equity loan to buy another home, strips it, and then sells it to someone else. Or a tenant who renovates extensively and manages to charge the home itself for the cost. Homeowners, alas, can't do that -- as we have learned again and again. They are stuck with the expense and the loss.

In considering reforms to our financial industry, we might want to consider such forms of abuse, costly to employees, communities that accommodate businesses, as well as other investors who find themselves empty handed at the end of the process. But first we have to wake up to the fact that the producers of commodities become commodities themselves for an industry that often has little regard for their intrinsic value.

About Ares Management
Ares Management LLC (“Ares”) is an independent Los Angeles based investment firm with over 90 employees and over US$7 billion of committed capital under management. Founded in 1997, Ares specializes in originating and managing assets in both the private equity and leveraged finance markets. Ares’ private equity activities are conducted through the Ares Corporate Opportunities Fund, L.P. (“ACOF”). ACOF focuses on injecting flexible, long-term junior capital into undercapitalized middle market companies to position them for growth. Ares’ leveraged finance activities include the acquisition and management of bank loans, high yield bonds, mezzanine and special situation investments, which are held in a variety of investment vehicles.

About Teachers’ Private Capital
Teachers' Private Capital is the private investment arm of the C$85 billion Ontario Teachers' Pension Plan, which invests on behalf of 255,000 active and retired teachers in Ontario, Canada. With more than C$7 billion in assets, Teachers' Private Capital is one of Canada's largest private investors and is currently working with more than 100 companies and funds worldwide by providing long-term flexible financing.

Significant investments include Samsonite, Worldspan and the recently purchased Alliance Laundry Systems in the U.S., and Maple Leaf Sports and Entertainment, Parmalat Canada, Yellow Pages, and Shoppers Drug Mart in Canada. Teachers' Private Capital specializes in providing private equity and mezzanine debt capital for large and mid-cap companies, venture capital for developing industries, and financing for a growing portfolio of infrastructure and timberland assets.

Five reasons pension funds deserve top rating

Steve Ladurantaye

Canadian pension funds are in good shape to benefit from a recovery in the markets, according to rating agency DBRS, provided they don’t try to overcompensate for a brutal year by taking excessive risks under improving conditions.

“The downturn has reduced the financial flexibility of these [funds] and it will likely take several years to make up for the poor performance of 2008,” managing director of public finance Eric Beauchemin and senior financial analyst Ryan Domsy wrote in a report. “However, these [funds] do remain underpinned by several factors that provide considerable resilience and keep them solidly at the AAA level.”

Here’s a quick reminder of how some of the funds fared in their last fiscal year – Caisse de dépôt et placement du Québec was down 25 per cent, Canada Pension Plan Investment Board was down 18.6 per cent, Ontario Teachers’ Pension Plan Board was down 18 per cent, OMERS Administration Corp. was down 15.3 per cent and the Public Sector Pension Investment Board was down 22.7 per cent.

“The poor investment performance had the effect of significantly shrinking their asset base and eroding their funding position, suggesting that the risk level in certain portfolios may have been higher than originally measured,” they wrote.

They say there are five reasons the funds deserve their top ratings and are likely to prosper in the coming years.

Hugeness: The funds “continue to benefit from very large asset bases,” ranging from $33.8-billion to $120.1-billion. Meanwhile, “recourse debt remains very low... as such, these credits enjoy, at all times, access to unencumbered assets several times in excess of recourse debt, providing considerable flexibility in the face of adverse financial developments."

Mandatory members: Most funds are funded by employees and their employers, which means any shortfalls are likely to be backfilled by the government in the case of public funds. These workers also tend to keep their jobs, which keeps the coffers full as they keep contributing through economic downturns.

Liquidity: Most of the funds have large pools of liquid assets, which can be flipped if needed to cover losses. “Under DBRS’s liquidity policy, public pension funds and asset managers issuing commercial paper are required to maintain high-quality liquid assets (defined by DBRS as cash, debt securities of AAA-rated sovereigns, provincial governments and government-guaranteed entities, as well as R-1 (high) short-term Canadian bank notes) in an amount equivalent to at least 1.5 times the limit of the commercial paper program."

Long run: Cash flows are predictable because the funds carry liabilities that are long-term. This provides “ considerable time for sponsors and plans to initiate corrective measures in response to any potential funding challenges.”

Legislation: Public pension funds must increase member contributions or reduce benefits to address funding shortfalls. “In contrast to pension plans, asset managers have no direct responsibility for the liabilities of their plan depositors, or for the ensuing funding shortfalls.”


There Is An Alternative To Capitalism

Business Unionism Offers No Solution To Capitalist Crisis

Auto Solution II

Super Bubble Burst

Your Pension Plan At Work

Gambling On Your Future

The End Of The Leisure Society


Your Pension Dollars At Work

P3= Public Pension Partnerships

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Leaky LEED

A LEED rated Green School in Halifax is suffering from a leaky roof, toxic VOC's and boiler maintenance problems only a year and a half after being built. Green buildings may not be as energy efficient as they claim to be. Using recycled materials and putting sod on the roof is asking for trouble, predominately water seepage. Perhaps more efforts should have been put in to the boiler system instead of making the school a modernist penitentiary.

Security cameras, panic buttons, washrooms without doors and extra-wide halls designed to prevent conflict between jostling individuals: Is this a new Canadian super-max penitentiary?

Far from it. Welcome to Halifax's Citadel High School, likely the safest educational institution in the country.

Too cool for school at Citadel High
Temperature drops to 11 C as repairs are made to heating system pipes

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Citadel High School students were sent home Wednesday after the school board decided it was too cold in the school because repairs to a heating have not yet been completed. (Christian Laforce / Staff)

The Halifax regional school board finally concluded Wednesday that 11 degrees was too cold for studying at central Halifax’s only high school.

A faulty steam pipeline under Summer Street that heats Citadel High School — and has been under repair for months — still wasn’t working in the morning when the temperature dropped in the city.

Parents were first told to bundle up their kids and send them to school anyway, but the board eventually decided to send students home later in the morning.

One parent was upset that the school board had not made a clear decision earlier and that the $31-million school, built in 2007, was having more problems.

"They’re certainly working as quickly as they can," said Cathy MacIsaac, a Transportation Department spokeswoman.

"The delay was related to receiving the pipe and the pipe is on its way."

Her department is overseeing the work.

Heating issues have closed the school before. Earlier this summer, workers tried to find out what was wrong with the pipeline.

The province found that a high water table in the area was creating problems for the pipes that heat the school.

Cold water in the soil was making it difficult for the pipes in the heating system to work properly.

Repairs were needed. They included waterproofing manhole covers, replacing valves and replacing the piping itself.

Ms. MacIsaac said that the repairs are almost done and that the specialized piping should arrive today.

Installation work should take about three to four days.

"Our staff are working with (the school board) to try and put in some temporary heating so the teachers and students can get back in, in a comfortable environment," she said.

School board spokesman Doug Hadley said an external boiler will be temporarily connected to the building’s hot water and in-floor heating systems. Six heating units with fans will also be brought in.

Mr. Hadley said the school board would be in contact with parents Wednesday night, but the plan was to have the school open Thursday morning.

Citadel High School replaced St. Patrick’s and Queen Elizabeth high schools as part of a $400-million provincial program to build and renovate schools around Nova Scotia.

The school has experienced a number of problems since its completion, including poor air quality and leaky roofs.

The repairs on the steam pipe will cost about $200,000.

Ms. MacIsaac said that at least a portion of the cost is likely to be covered by a contractor’s warranty.

Heating fails at new Halifax school

Last Updated: Tuesday, September 29, 2009 | 12:52 AM AT

The underground piping system that heats Citadel High School in Halifax is out of commission for the second time in less than a year.

Officials with Nova Scotia's Department of Transportation and Infrastructure Renewal said ground water is leaking into nearby manholes and causing the pipes to leak steam.

"They don't work as efficiently as they should," Lindsay Mills said Monday.

The $25-million high school, which opened in September 2007, is designed to be heated with steam generated at a nearby hospital and directed to the school using underground pipes.

The same underground system, running from the QEII Health Sciences Centre, also heats the Nova Scotia Museum of Natural History.

Neither building, however, is getting heat from the steam transfer system.

"We are looking into that to figure out the origins and what really went wrong," Mills said.

Crews have dug three pits in the area as they try to make the piping waterproof and replace manholes and steam fittings.

Mills said the problem, which will cost an estimated $225,000 to fix, first surfaced last year when a leaking pipe sent steam billowing out of a manhole for several weeks.

She said the repairs should be complete by late October, and consultants will determine who will pay for those repairs.

Halifax's 16-month-old Citadel High School has a leaky roof.

School officials used buckets to catch the water as it dripped through the ceiling above the gymnasium on Thursday.

"At that point it was dripping not in any great amounts but coming in in more than one area," said Shaune MacKinlay, spokeswoman for the Halifax regional school board.

MacKinlay said the building is still under warranty so the board won't have to pay for repairs.

Contractors were expected to go to the $30-million school on Friday to fix the roof.

Citadel High opened in September 2007.

One of the highlights of the school is that it adheres to the international Leadership in Energy and Environmental Design (LEED) standards for sustainable, green benefits.

Some of its environmental features include:

-- Rainwater collected to flush its toilets
-- Reused building features from the two schools it replaces and the one that was demolished to make way for it
-- Retained as much green space on site as possible
-- Waterless urinals
-- A reflective roof with part of the roof covered with grass
-- Exceeding the energy code requirement for insulation R value
-- Steam from Infirmary boiler plant is used to heat the building and water

What is LEED?
The Leadership in Energy and Environmental Design (LEED) Green Building Rating System™ encourages and accelerates global adoption of sustainable green building and development practices through the creation and implementation of universally understood and accepted tools and performance criteria.


“We really wanted to not have a traditional ceiling in the classrooms,”
says Cotaras. “The exposed beams and deck make the
classrooms feel taller. Plus, there’s a three foot savings from floorto-
floor adding a cost savings to the envelope of the building.”
Fowler Bauld & Mitchell’s design also eliminates the need for
horizontal ventilation ducting at each floor. Instead, vertical ducts
drop into each classroom from a ventilation distribution system
located in a spine running along the building’s rooftop. This also
reduces the cost of the construction.
Citadel High School is the second project where Fowler Bauld &
Mitchell has used exposed beams. The Nova Scotia Community
College in Stellarton that they designed in 2004 was a 5,575 m2
renovation and expansion project (see Advantage Steel No. 23,
Summer 2005). Similar to Citadel High School, exposed steel
beams/steel decking were painted and lit with suspended lighting.
“Although Citadel High School uses some of the same structural
design elements such as exposed beams, it is a much bigger project
than the Community College,” says Cotaras. “Not only is it threestoreys
instead of two, its also all new construction and not a renovation/
addition. This is the first time exposed steel has been used
in this way for a new building in Nova Scotia.”
Fowler Bauld & Mitchell’s design for the school uses steel beams
instead of joists. These will not only be stiffer, but will allow for a
clean open-ceiling approach and a reduction in the overall height.
According to the company, this will save cladding costs and helps
justify the more costly beam approach.

Cosmic Heresy

A hypothesis is a theory looking for facts. That it is taken as 'fact' due to popular consensus does not make it so. Even if those who make up that popular consensus are scientists.

A new take on the cosmic clouds
Going back to the planetary drawing board, Dr Prentice revisited the work of legendary French mathematician Pierre-Simon Laplace, whose late 18th-century nebula model was abandoned after less than a century.
In Dr Prentice's modern Laplacian theory, as he calls it, the original cosmic cloud of gas and dust, which was once part of the galaxy, sheds a concentric family of orbiting gas rings as it contracts inwards from Neptune's orbit. "The material from which the planets formed was thus once concentrated in a system of very narrow and dense rings of gas, one for each planet, rather than being spread out thinly as a disc," he says.
Dust and ice grains condensed out of each gas ring to form a growing core of solids - the embryos of today's suite of planets. The inner solar system's rocky cores became the terrestrial planets of Mercury, Venus, the Earth and Mars. The outer solar system's cores of rock and ice grew big enough to capture great gaseous envelopes, thus becoming the gas giants, Jupiter and Saturn, and the outer planets, Uranus and Neptune.
"Because the gas within a gas ring is 100 times denser than that of the nebula disc model, the planets form 100 times faster," he says. Instead of being created in 2.5 million years, Saturn takes only 25,000 years. Neptune and Uranus form within 100,000 years. "These times lie well inside the 1 million year cut-off time."
As well as explaining the orbits and masses of HR 8799's newly discovered planets, his model predicts many key aspects of the chemical and physical structure of our own solar system's planets and their moons. One prediction, to be announced formally this month at a meeting of the American Geophysical Union in San Francisco, relates to the size of Mercury's massive iron core.
Another prediction is that, once analysed, the data from NASA's Messenger probe, which flew past Mercury in October, will reveal no significant traces of the volatile elements potassium, sodium or sulphur on the planet's heavily cratered surface. "That is what I expect NASA to announce very soon - I hope," says Dr Prentice.
His theory is still widely regarded as heretical, but at least one eminent physicist, Professor Paul Davies of Arizona State University in the US, says it should not be dismissed "out of hand".
Scientists' understanding of the solar system's formation is undergoing a review, with the recent discovery of hundreds of planetary systems around other stars, says Professor Davies. "Many of these systems have planets distributed very differently from the solar system, and a lot of head scratching is going on," he says. "The basic science is up for grabs, and we could be in for a big surprise."