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If the U.S. government shuts down, the New York Times writes, the animals in the closed National Zoo in Washington will be fed. Food stamp cards will not go out, however. The big political risk today, again, is from Canada.

Spain's Banco Santander tested the euro bond market today with a 2-yr floating issue partly underwritten by Barclays Bank (BCS) along with STD itself. The underwriters propose that STD pay 145 basis points over Eurobor for their money, having squeezed the rate down from the initial offer of 150 bp (i.e. 1 1/2%). But STD has to respect the sovereign ceiling on Spain's borrowing rates.

With Portugal having paid 5.1%-5.9% for its six to 12 month money last week, and up to 9.19% for longer term, Spain is the next victim of the euro vigilants and is also having to pay triple digit basis points over eurobor.

While all Spanish banks and financial experts say the rate should be reduced to 80 or even 50 bp, including Alfredo Saenz of STD, whom we quoted for paid subscribers yesterday, the market is not obeying.

Of course if the European Central Bank raises rates prematurely, it will cut pressure on the Club Med countries and Ireland over rates but may delay their financial recovery.

Having said that, it is uncertain exactly what rate STD will have to pay. There are two different methodologies for calculating the London Interbank Offer Rate in Euros, what Eurobor is defined as. One is used in London by the British Bankers Assn., and was gamed by large banks according to recent accusations.

The other is used on the continent. The BBA Eurobor tally throws out the highest and lowest rates being quoted by banks. The continental version uses any and all quotes.

Moreover, neither British nor Euroland calculations in fact provide a rate for two years. They only offer rates for overnight to a full year. The range is 1.014% to 2.033%, with the longest duration having the most risk and therefore the highest yield.

Banco Santander, which is borrowing in the U.K., will be paying 1.45% over 3 mo. Eurobor, or 2.719% assuming its bonds are placed at par. A bank is smart enough to figure out how much it is paying. But you would not want to be paying a mortgage based on Eurobor as many are doing these days.

Canada likes to surprise investors by tax and regulatory changes which sour their prospects. Today another Canadian surpise hit the markets as the government of Alberta proposed new environmental rules that would revoke all or part the oilsands leases it has already leased, in some cases putting active projects at risk.

The measures are intended to protect water, wildlife, and woods. But of course they do not protect private property. This caught the oil industry in Canada, the USA, and elsewhere off-guard.

Alberta wants to create a national park of 2 mn hectares covering about a fifth of the oilsands leased area.

One of the affected companies is in our portfolio but in fact every single oil company, Canadian or other, appears to be under threat of reversal of leases which the province is drafting and others around the globe will copy.

The list by Alberta shows tracts held by every oil major and lots of minors and Alberta's famous number companies.

If the U.S. government shuts down, the New York Times writes, the animals in the closed National Zoo in Washington will be fed. Food stamp cards will not go out, however. The big political risk today, again, is from Canada.

Spain's Banco Santander tested the Euro bond market today with a 2-yr floating issue partly underwritten by Barclays Bank along with STD itself. The underwriters propose that STD pay 145 basis points over Eurobor for their money, having squeezed the rate down from the initial offer of 150 bp (i.e. 1 1/2%). But STD has to respect the sovereign ceiling on Spain's borrowing rates.

With Portugal having paid 5.1%-5.9% for its 6 to 12 month money last week, and up to 9.19% for longer term, Spain is the next victim of the euro vigilants and is also having to pay triple digit basis points over eurobor.

While all Spanish banks and financial experts say the rate should be reduced to 80 or even 50 bp, including Alfredo Saenz of STD, whom we quoted for paid subscribers yesterday, the market is not obeying.

Of course if the European Central Bank raises rates prematurely, it will cut pressure on the Club Med countries and Ireland over rates but may delay their financial recovery.

Having said that, it is uncertain exactly what rate STD will have to pay. There are two different methodologies for calculating the London Interbank Offer Rate in Euros, what Eurobor is defined as. One is used in London by the British Bankers Assn, and was gamed by large banks according to recent accusations.

The other is used on the Continent. The BBA Eurobor tally throws out the highest and lowest rates being quoted by banks. The Continental version uses any and all quotes.

Moreover, neither British nor Euroland calculations in fact provide a rate for two years. They only offer rates for overnight to a full year. The range is 1.014% to 2.033%, with the longest duration having the most risk and therefore the highest yield.

Banco Santander, which is borrowing in the UK, will be paying 1.45% over 3 mo. Eurobor, or 2.719% assuming its bonds are placed at par. A bank is smart enough to figure out how much it is paying. But you would not want to be paying a mortgage based on Eurobor as many are doing these days.

Canada likes to surprise investors by tax and regulatory changes which sour their prospects. Today another Canadian surpise hit the markets as the government of Alberta proposed new environmental rules that would revoke all or part the oilsands leases it has already leased, in some cases putting active projects at risk.

The measures are intended to protect water, wildlife, and woods. But of course they do not protect private property. This caught the oil industry in Canada, the USA, and elsewhere off-guard.

Alberta wants to create a national park of 2 mn hectares covering about a fifth of the oilsands leased area.

One of the affected companies is in our portfolio but in fact every single oil company, Canadian or other, appears to be under threat of reversal of leases which the province is drafting and others around the globe will copy.

The list by Alberta shows tracts held by every oil major and lots of minors and Alberta's famous number companies: Home Check Inc.; Ronald Lyle Smith; Ronald James Stewart; Lester Bonnard Vanhill; 0859953 BC Ltd.; 547184 Alberta Ltd.877384 Alberta Ltd.; Athabasca Minerals Inc. (OTCPK:ATHOF); Fission Energy Corp.; Graymont Western Canada Inc.; Thomas Moricet; Alberta Oilsands Inc.; Antelope Land Services Ltd.; Athabasca Oil Sands Corp.; BP plc (BP); Canadian Natural Resources Ltd.(CNQ); Cenovus Energy Inc.(CVE); Chinook Energy Inc.; ConocoPhillips (COP); Harvest Operations Corp.; Imperial Oil Resources Ltd. (IMO); Pan Pacific Oils Ltd.; Scott Land & Lease Ltd.; Southern Pacific Resource Corp. (OTCPK:STPJF); Statoil Canada Ltd.; Stone Petroleums Ltd.; Sunshine Oilsands Ltd.; Bancroft Oil and Gas Ltd.; Cavalier Land Ltd.; Koch Exploration Canada G/P Ltd.; Perpetual Energy Operating Corp.; Ranger Land Services; Standard Land Co.; Devon Energy Corp. (DVN); Lende Investments Ltd.; MEG Energy Corp. (OTCPK:MEGEF); and Rocky Layman Energy Inc.

However jolly it is to see the Koch family oil firm in the list (they finance the U.S. Tea Party), and to see the Canadians also dumping on BP, this is still a setback for North American energy independence.

However jolly it is to see the Koch family oil firm in the list (they finance the U.S. Tea Party), and to see the Canadians also dumping on BP (BP), this is still a setback for North American energy independence.

Source: U.S. Govt. Shutdown? Greater Economic Risks Arising From Canada Cutting Off Oil Leases