May 31 7:17 AM

Transocean Request to Cap Liability ‘Unconscionable,’ U.S. Says  (Bloomberg) — Transocean Ltd.’s request that its liability in connection with what may be the largest oil spill in U.S. history be limited to $26.7 million is “simply unconscionable,” the Justice Department said. U.S. Assistant Attorney General Tony West, in a May 24 letter to Transocean attorney Frank Piccolo, questioned the company’s legal argument that the 150-year-old Limitation of Liability Act caps its damages. The owners of the RMS Titanic, a passenger ocean liner that sank in 1912 after hitting an iceberg, also tried to use the law to avoid making payments to the ship’s survivors and the estates of those who died. “It is simply unconscionable, in the circumstances of this case, that Transocean is attempting to use the same shield of liability, potentially leaving thousands of people who have been damaged by your clients’ actions with no remedy,” West wrote in his letter, which the Justice Department released under a Freedom of Information Act request.

The Disservice Economy – Life in our service economy inevitably carries a risk of occasional disservice. And what a fascinating variety of forms disservice can take.I inhabit a world of relatively good standard services, facilitated by new information technologies. But non-standard services are another matter. Big differences between routine and non-routine quality may be consistent with profit maximization. Companies that care about customer loyalty want to minimize the probability that a customer gets aggravated. But it may not be cost-effective to provide high-quality services for low-probability events. And once a customer passes a threshold of aggravation, the intensity of further aggravation probably has few ramifications. Individual rants generally have less impact on company reputation than reports of average quality, which are largely dominated by the quality of routine transactions.


News networks say access to oil spill ’slowly being strangled off’ – Media organizations say they are being allowed only limited access to areas impacted by the Gulf oil spill through restrictions on plane and boat traffic that are making it difficult to document the worst spill in U.S. history.The Associated Press, CBS and others have reported coverage problems because of the restrictions, which officials say are needed to protect wildlife and ensure safe air traffic.Ted Jackson, a photographer for The Times-Picayune newspaper in New Orleans, said Saturday that access to the spill "is slowly being strangled off." A CBS news story said one of its reporting teams was threatened with arrest by the Coast Guard and turned back from an oiled beach at the mouth of the Mississippi River. The story said the reporters were told the denial was under "BP’s rules."

The Root of the Housing Bubble Remains Unchanged The fundamental root of the housing bubble–the collusion of the Central State and banks to extend home ownership to millions of citizens who did not qualify for that burden– remains firmly in place. The Federal government continues to pour tens of billions of dollars into this "home ownership should be for everyone" project via subsidies to Fannie Mae, Freddie Mac and FHA. Mortgage lenders have been delighted to write mortgages in our completely nationalized market in which the government backs literally 99% of all mortgages and the Federal Reserve bought $1.2 trillion in mortgages that no sane private investor would touch. Fannie Mae seeks $8.4 billion from government after loss: Fannie Mae, the largest U.S. residential mortgage funds provider, on Monday asked the government for an additional $8.4 billion after the company lost $13.1 billion in the first quarter. The government has relied heavily on both companies, which buy mortgages from lenders to stimulate more lending, to stabilize the housing market.  In other words, the housing market would collapse without this massive Federal support, and there is no end to the losses this subsidy will require.

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