So yesterday was, I think, the last day to exercise your warrants. I can’t imagine they really go from being worth $3.75 or so yesterday to zero today if you failed to exercise them – surely some mercy might be shown? (or your broker exercised them for you, as many automatically exercise expiring options if they’re in the money) – but that is not the point. The point is that the relatively short but wonderfully profitable life of these warrants is now officially over . . . and the much less dramatic, but still possibly profitable, next phase of the common stock begins.

Even with all the selling pressure one imagines there must have been from warrant holders exercising – and then immediately selling the stock to take their profit rather than put up an additional $5 and start the capital gains holding period all over again – even with all that, the stock closed at $8.80. (So if you paid 50 cents for the warrant a few months ago and did put up the $5 to exercise, you have a basis of $5.50 and a stock worth $8.80.)

Anything is possible . . . including another round of selling pressure in a year or so from folks like me who exercised warrants on which their gain was short-term, planning to wait a year and a day to take what would then be a lightly taxed long-term capital gain instead.

But I think the wind could be at this company’s back, so I plan to hold on, perhaps even more than a year and a day. What could be sexier than dredging?


A new series on AMC. Maybe because my dad was himself an ad man (Mad Men – Madison Avenue men), and maybe because anything set in the Sixties grabs me, I’m hooked. I liked last night’s first episode, repeated frequently in the coming days; Tivo takes care of the rest.


If you subscribed to Times Select, you’d already have seen Tom Friedman’s column from Wednesday:

July 18, 2007
Help Wanted: Peacemaker

I can’t imagine how I’d feel if I were the parent of a soldier in Iraq and I had just read that the Iraqi Parliament had decided to go on vacation for August, because, as the White House spokesman, Tony Snow, explained, it’s really hot in Baghdad then – ‘130 degrees.’

I’ve been in Baghdad in the summer and it is really hot. But you know what? It is a lot hotter when you’re in a U.S. military uniform, carrying a rifle and a backpack, sweltering under a steel helmet and worrying that a bomb can be thrown at you from any direction. One soldier told me he lost six pounds in one day. I’m sure the Iraqi Parliament is air-conditioned.

So let’s get this straight: Iraqi parliamentarians, at least those not already boycotting the Parliament, will be on vacation in August so they can be cool, while young American men and women, and Iraqi Army soldiers, will be fighting in the heat in order to create a proper security environment in which Iraqi politicians can come back in September and continue squabbling while their country burns.

Here is what I think of that: I think it’s a travesty – and for the Bush White House to excuse it with a Baghdad weather report shows just how much it has become a hostage to Iraq.

The administration constantly says the surge is necessary, but not sufficient. That’s right. There has to be a political deal. And the latest report card on Iraq showed that a deal is nowhere near completion. So where is the diplomatic surge? What are we waiting for? A cool day in December?

When you read stories in the newspapers every day about Americans who are going to Iraq for their third or even fourth tours and you think that this administration has never sent its best diplomats for even one tour yet – never made one, not one, single serious, big-time, big-tent diplomatic push to resolve this conflict, but instead has put everything on the military, it makes you sick.

Yes, yes, I know, Secretary of State Condoleezza Rice is going to make one of her quick-in-and-out trips to the Middle East next month to try to enlist support for an Israeli-Palestinian peace conference in the fall. I’m all for Arab-Israeli negotiations, but the place that really needs a peace conference right now is Iraq, and it won’t happen with drive-by diplomacy.

President Bush baffles me. If your whole legacy was riding on Iraq, what would you do? I’d draft the country’s best negotiators – Henry Kissinger, Jim Baker, George Shultz, George Mitchell, Dennis Ross or Richard Holbrooke – and ask one or all of them to go to Baghdad, under a U.N. mandate, with the following orders:

‘I want you to move to the Green Zone, meet with the Iraqi factions and do not come home until you’ve reached one of three conclusions: 1) You have resolved the power- and oil-sharing issues holding up political reconciliation; 2) you have concluded that those obstacles are insurmountable and have sold the Iraqis on a partition plan that could be presented to the U.N. and supervised by an international force; 3) you have concluded that Iraqis are incapable of agreeing on either political reconciliation or a partition plan and told them that, as a result, the U.S. has no choice but to re-deploy its troops to the border and let Iraqis sort this out on their own.’

The last point is crucial. Any lawyer will tell you, if you’re negotiating a contract and the other side thinks you’ll never walk away, you’ve got no leverage. And in Iraq, we’ve never had any leverage. The Iraqis believe that Mr. Bush will never walk away, so they have no incentive to make painful compromises.

That’s why the Iraqi Parliament is on vacation in August and our soldiers are fighting in the heat. Something is wrong with this picture. First, Mr. Bush spends three years denying the reality that we need a surge of more troops to establish security and then, with Iraq spinning totally out of control and militias taking root everywhere, he announces a surge and criticizes others for being impatient.

At the same time, Mr. Bush announces a peace conference for Israelis and Palestinians – but not for Iraqis. He’s like a man trapped in a burning house who calls 911 to put out the brush fire down the street. Hello?

Quitting Iraq would be morally and strategically devastating. But to just drag out the surge, with no road map for a political endgame, with Iraqi lawmakers going on vacation, with no consequences for dithering, would be just as morally and strategically irresponsible.

We owe Iraqis our best military – and diplomatic effort – to avoid the disaster of walking away. But if they won’t take advantage of that, we owe our soldiers a ticket home.

Copyright 2007 The New York Times Company


Cheney Suppressed Evidence in California Energy Crisis
By Jason Leopold
t r u t h o u t | Investigative Report

Thursday 19 July 2007

In-depth investigation shows how Vice President Dick Cheney pressured federal energy regulators to conceal evidence of widespread market manipulation by energy companies during the California electricity crisis in 2001.

In March 2001, while California’s two largest utilities were teetering on the brink of bankruptcy, and the state’s electricity crisis was spiraling out of control, Vice President Dick Cheney summoned Curt Hebert, the chairman of the Federal Energy Regulatory Commission (FERC), to his office next to the White House for a hastily arranged meeting.

Cheney had just been informed by his longtime friend Thomas Cruikshank, the man who handpicked the vice president to succeed him at Halliburton in the mid-1990s, that federal energy regulators were close to completing an investigation into allegations that Tulsa, Oklahoma-based Williams Companies and AES Corporation of Arlington, Virginia had created an artificial power shortage in California in April and May of 2000 by shutting down a power plant for more than two weeks.

Cruikshank was a member of Williams’s board of directors, and perhaps more importantly, had been one of many energy industry insiders advising Cheney’s energy task force on a wide-range of policy issues, including deregulation of the nation’s electricity sector, that would benefit Williams financially.

Cruikshank informed the vice president he had learned about the preliminary findings of FERC’s investigation during a Williams board meeting earlier in March 2001. FERC, Cruikshank told Cheney, was in possession of incriminating audio tapes in which a Williams official and an AES power plant operator discussed keeping a Southern California power plant offline so Williams could continue to receive the $750 per megawatt hour premium for emergency power California’s grid operator was forced to procure to keep the lights on in Southern California.

AES was the operator of two power plants in Los Alamitos and Williams marketed the electricity. The power plants were designated by the California Independent System Operator (ISO), the agency that manages the state’s power grid, as crucial in order to ensure a reliable flow of electricity in the Southern part of the state. To stave off the potential for blackouts, the ISO was given the authority to pay top dollar for power if the power plants operated by AES, as well as power plants operated by other companies, were not in operation.

California’s electricity crisis wreaked havoc on consumers in the state between 2000 and 2001. The crisis resulted in widespread rolling blackouts and forced the state’s largest utility, Pacific Gas & Electric, into bankruptcy. California was the first state in the nation to deregulate its power market in an effort to provide consumers with cheaper electricity and the opportunity to choose their own power provider. The results have since proved disastrous. The experiment has cost the state more than $30 billion.

According to a copy of the March 2001 Williams transcript, Rhonda Morgan, a Williams official, told an AES power plant operator “it wouldn’t hurt Williams’s feelings” if the power plant that was down for repairs was kept offline for an extended period of time so the company could continue to be paid the “premium” for its emergency energy supplies from the ISO. In a separate conversation with Eric Pendergraft, a senior AES official, Morgan said, “I don’t wanna do something underhanded, but if there’s work you can continue to do …”

Pendergraft responded to Morgan, saying, “I understand. You don’t have to talk anymore.”

The collusion between Williams and AES allowed Williams to earn an extra $10 million over a period of 15 days and set in motion a series of events that resulted in the California power crisis between 2000 and 2001, a crisis that was based almost entirely on manipulative practices by energy companies.

This story is based on a two-month investigation into Cheney’s energy task force; how the vice president pressured cabinet officials to conceal clear-cut evidence of market manipulation during California’s energy crisis, and how that subsequently led Cheney to exert executive privilege when lawmakers called on him to turn over documents related to his meetings with energy industry officials who helped draft the National Energy Policy and also gamed California’s power market. Truthout spoke with more than a dozen former officials from the Energy Department and FERC as well as current and former energy industry executives all of whom were involved in personal discussions with Cheney relating to the National Energy Policy. . . .

Which, as so much else, brings us back to . . .


More of your thoughts on this topic Monday.

In the meantime: have you seen SiCKO? It’s playing at a theater near you. Harry Potter has slipped in the audience ratings from 8.1 stars out of 10 to 7.9 . . . but SiCKO remains firm at 8.5, better than anything else out there.



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