Sunday, November 23, 2008

The Rich Getting... Poorer, For Once!

Lib's LOVE a good conspiracy. Their favorite is that a small band of ultra-rich White bastards are in 100% complete control of the stock market, making it go up & down on a whim.

You might have a look at what Rich Whitey has been "suffering" through recently:

Back on Sept 19, Berkshire Hathaway, Buffett's holding company hit $147,000, probably putting Buffett near the $70 billion mark. But Berkshire finally succumbed to the stock market crush, and nearly got cut in half at it's recent lows near $74,000.

And Lost In The Crushing is this: Remember Ye Olde NASDAQ Bubble? Yeah, those were good times. NASDAQ got poked for a near 80% beating, but then began it's slow but sure ascendance to new highs, right? Almost got to 3,000 during Oct 2007 highs, a pretty good convincer from the 1,100's seen 5 years before at implosion lows.

Well, guess who's coming to dinner? A black dude to marry Whitey's daughter? Ahhhh... were it only that, Whitey could survive THAT. No, it's NASDAQ IMPLOSION PART II!

It's been lost in the chaos, but the NASDAQ, and some of it's favorite, and putridly wealthy sons, are having their asses handed to them. Yes, the recent low on the NASDAQ near 1,200 are frightfully close to the Never-To-Be-Seen-Again lows put in almost 6 years ago to date.

So Scions of Wealth, like Bill Gates, are watching the Redux of the MSFT Meltdown melt billions off their still ridiculous pile of wealth. MSFT started this year about twice what it is trading at right now.

Even the Never Say Die Bubble Boys of BrinPage have watch the beloved Google get it's ass slashed from the mid $700's, clear down to the mid $200's.

Some NASDAQ billionaires are holding up pretty respectably, thank you. Larry Ellison of Oracle fame, has merely lost 1/3rd of his pile, since ORCL has "only" fallen from $24 to $16.

But if you want to plumb the depths of the Truly Shellacked, look no further than the Arab Prince, and his band of Shrieking Joobs.

Arab Prince Alwalheed has simply been destroyed by the recent collapse of Citicorp. He owned (and still owns) 5% of a company that at the beginning of 2007 had 5.45 billion shares trading at $55, or right at $300 billion. That stack alone was worth $15 billion to Alwaleed, and I'm sure he had some oil wells and hot & cold running bitches, too.

Well Wake Up My Bitches, cuz with the almost complete collapse of Citi, Alwaleed has watched that $15 bill pile evaporate in the Saudi Sun, to BARELY a billion dollars. He still rich, but he ain't BIG RICH. He ain't the Warren Buffett of the Middle East rich.

It illustrates a point: You DO NOT want to own LEVERAGED COMPANIES when The World is headed into Great Deoression 2.0. And Citi is LEVERAGED big. They will go down. Their credit card portfolio will pull them under.

What about the Never Say Poor Mega Rich Joobs? Well, Sandy Weil of Ex-Citi fame has no doubt suffered on par with his Muslim Master Alwaleed, with whom he is Great Friends.

This illustrates Point 2: Joobies LOVE MONEY more than they hate Arabs. WWII illustrates my point that Joobers love money more than they hate Nazi's.

But you want to see someone truly in pain? Well, then take fitty cent from a Vegas Jubber, Sheldon Adelson. This motherfucker has had his financial pecker handed to him in the guide of Las Vegas Sands stock going from $140/sh, clear down to penny stock lows in the $2's.

This poor fucker has just been crushed. He is officially Not Very Rich, after being the 3rd richest person in AmeriKKKa just 18 months ago.

This Financial Tsunami knows no boundaries, it is going to make the poor distitute. It'll make the middle class pretty fucking poor. But it is starting to FINALLY take down the Truly Ridiculously Wealthy. The Gates, Buffett's, Alwaleeds, Adelsons, and many, many other Hyper-Rich types are being CRUSHED. Granted, they are still rich as hell, but far less so.

There is a Virginal Hestiancy Among AmeriKKKa's Capitalists, for the first time in our generation. I think they are actually unsure of just how bad it might get for them. Usually, you'll see one or two of them get shellacked in a market bump, but then it's off to the races again.

Not this time. The Inflection Point seems to have been reached between Labor & Capital, Worker & Owner. Capital has been winning the race for well over 3 decades. Labor's relative wealth has fallen. It has paid To Own. I think those days are over. Capital suffered a crippling blow over the past year. It's not been a few noobs who took a hit, it's been the Biggest of The Big, and they are taking hits they've never, EVER seen before.

What does this have to do with Bend? Quite a bit.

Bend media has long said that due to our Capital-heavy population, our outsized proportion of Owners, that we would Never Go Down Hard. How could we? Everyone knows, The Rich NEVER GET POOR.

And this has been true for several decades, especially the past three. Coincidentally, Bend has come up from the depths, and was for a time, the most ridiculously overpriced shithole God ever crapped out. And we've been blessed with such wonders as Volo, the restaurant with the longest consecutive days without a single patron, and other economic bastardizations all over our wonderous city.

THIS is what people thought about Bend: It is overrun with CAPITAL. OWNERS. And owning NEVER goes down. Only workers go down, as well they should. With a town so top heavy with owners, things like a blowjob-fueled wine bar, $35 lunch joints like Merenda, King of Sole $500 shoes, galleries, spas, and olive oil shops lining every block, catering to the VAST CAPITAL population base of Bend, it was a sure thing that Bend would only grow more glorious with age.

Well, you're starting to see the first crack in Capital in our lives. Volo is DEAD EMPTY. NO ONE has ever eaten there. That spa where they feed you beer, suck your cock,& give you a haircut? Even that place is hurting. REI? Probably ready to close. The same is probably true for half The Old Mill. All the ridiculously overpriced crap shops that would supposedly be held up by the fickle power of Ridiculously Rich Capital Consumerists, what's happening to them?

Yeah, they are getting crushed. We're the most Over Retailed, Over Restauranted, and generally Over Serviced city in the U.S. Look at Sunriver Realty: Big Splash building, tons of new yuppy agents, prosperity forever, right? No. Closed down, probably lost more money in the last year than the whole company has made during the bubble.

So much of this town is STILL based on an assumption of Ever Ascending Wealth By Capitalists Into Perpetuity.

Go to Tetherow. I did recently. That's a Great Big Empty out there. Go to preview Pronghorn homes at their downtown showplace. Oh right. Closed. Go to Brasada. No. Actually don't. It's too far & a waste of gas. Which is what everyone thinks once they're out there.

"Fuck, I might as well live in Burns."

Yeah, this general sentiment is true for All Of Central Oregon. This place is Too Far From Cool Stuff. We have Bachelor, sure. But people have stopped that crap. Portlanders are going to Hood. Cali-Bangers are going to Mammoth or Reno.

Bend is fucked. We built a city predicated on the idea that Capital ALWAYS gets WEALTHIER. ALWAYS. Look around: This place is just overrun with $800,000 homes. We're out in the fucking desert, and we have like 2 million $800,000 homes. WTF?

And it's going to get FAR WORSE. We've had the Good Sense to elect the Worst Band of Thieves to ever grace Public Office. From The Source:

At What Cost? Record-breaking contributions raise questions about the role of campaign cash

Written by Daniel Pearson
Wednesday, 19 November 2008


... Critics say COBA is interested only in seeing that local developers and builders are able to continue making as much money as they have over the last several years at the expense of good planning and community sustainability.

“I think what’s happening is, because of the housing crash, the builders and developers in Bend need to make sure that they can continue making the same amount of money they’ve made in the past, and the only way to do that is through the rapid expansion of the city’s urban growth boundary,” said Keith Quick, Deschutes County Organizer for the Oregon League of Conservation Voters, which worked on behalf of three of the four losing candidates.

“The urban growth boundary was the key issue this year,” Quick said. “In the Bend City Council race, there was a clear line between four progressive candidates going up against four pro-growth candidates. The pro-growthers believed in expansion, and the other four progressives believed in a more sustainable approach to growth in Bend.”

The most notable difference in campaign spending came in how Eager, Eckman and Greene used their finances for advertising. Each of them had enough funding to spend on televisions ads, as well as newspapers and radio, and that focus made all the difference in the 2008 general election, said Jodie Barram, vice chair of the Bend Urban Area Planning Commission who lost the race for Bend City Council seat one to Eager.

“Advertising is not free by any means,” Barram said. “As non-incumbents, Jeff and I had an uphill battle getting our name recognized. In this race, especially, the difference came down to financing and being able to afford those TV ads. I chose to go with radio and print ads because that’s what I could afford. Jeff was able to afford plenty of TV ads, which got his name and face in front of another audience that I was not able to reach.”

Quick said the TV ads had more of a dubious effect on the outcome of the elections than simply expanding name recognition.

“The real fear about this election from a citizen’s perspective is that not only were Bend’s citizens duped into voting for pro-development candidates, the TV ads made them look like change candidates, or candidates that cared about the environment and the livability of Bend,” Quick said. “They have a lot to prove once they get on the council. I don’t think we will see them supporting livable communities like they said, but we’ll see. The real fear here is that special interests gave so much money to three of the four candidates who won, those special interests stand to gain monetarily from decisions the city council makes. That’s the real scary part here – the special interests, especially the Central Oregon Builders Association, bought those city council seats and now these councilors are going to owe them something. That’s really concerning to the OLCV and it should be concerning to other citizens in Bend who care about keeping the city council an independent body.”

Wow. What a clusterfuck of stupidity.

See, apparently CobaCo is run by dumbfucks who have never read an Economic Textbook. They think opening up the UGB will return us to the Glory Hole Years?

Wow. I say, Let 'Em Open 'Er Up, then. Expand that fucking UGB out to Millican. And you fuckers Just Start Building. Please. Yeah. That should put things right. Prices should stabilize once we have shit shacks lined up as far as the wandering eye can see.

Stupid fucking COBA dumbshits don't know whether to crap or blow goo.

Worst Of All Worlds, folks.

Labor is, as always, going to get fucked in this thing. But for the first time, So Is Capital. That means no Mercato. No more Redmond Waterpark. Yeah, no more Tuscany Pines, and it's ilk (ie Moronic Ideas). And believe it or not, THIS CRAP, this stupid crap, is what we've pinned our economic hopes on.

And to cap it off, we've just elected a slate of WHORES whose puppeteers believe an onslaught of supply is how you raise prices.

$120K medians are on their way. $40/sf for the STD shit, $60/sf for the granite counter crap, and $80 for the inner-circle, rental shit shacks. This towns ass is going to get drilled unmercifully. In 10 years we'll be The Oakland of the high desert.

325 comments:

«Oldest   ‹Older   1 – 200 of 325   Newer›   Newest»
Bruce said...

First, Always FIRST.

Anonymous said...

It was good to see the SORE print that story. That said, they had to wait until after the election to spill the truth.

Too bad they didn't have the balls before the election to tell people what was going on, but NO, they couldn't do that.

The other strange thing is calling 'aber-pussy' and companions 'progressives'. Only a Limbaugh like HBM could truly call the 'aber-pussy' a progressive. BEND is a pug-town, the pugs will fill their own with their own. Aber-Pussy was a caver to quote marge, the aber-pussy had lost his utility he was always a fetch-it for Friedman.

One of the MOST significant rumor's I'm hearing is that they're going to Give Linda Johnson ( PUG BITCH WHO LOST ), they're going to give her Friedman's seat, it turns out that without her CPA brains, the city-council doesn't know what to do with the cooked-books that Friedman&Johnson had put together in the recent years.


Still nobody in this town has done a story about Suterra, still just silence.

Anonymous said...

Across from the Deschutes Pub was the 'grove', now 'village' something, well its NEW owner is now going to have Vegas Style 'cage acts'.

BEND is going VEGAS, BEND is going adult nightlife theme-park, who would have guessed.

My feeling is that its Bledsoes 'cigar club', hell your paying $50k, and there is NOTHING to do, so move 'Starz' off 3rd-av to downtown, and let downtown become a little RENO. Why the fuck not?

Finally BEND will be a place that people will come from all over.

Like I printed a few days ago when APU wouldn't get off the hot-tin-root, that Bend now has the CHEAPEST HO's in the NW. At the very least we can take this army of meth infected scab-ho's, and turn them into a attraction.

YOU KUNTS remember a year ago or more, when the city started marketing 'BEND' to the CHINESE&JAPANESE?? I told you 'night-life', 'prostitution', ...

Yes, HOMER is right BEND will become a OAKLAND, but without the blacks, folks will come from all over to BEND to fuck white-trash-ho's.

It's perfect!!! It's Bend.

Anonymous said...

Wow. Tell us what u really think. I'm hoping I can get one of those 800k shit shack crap casas for 100k....How long will I have to wait?

tim said...

>>Across from the Deschutes Pub was the 'grove', now 'village' something, well its NEW owner is now going to have Vegas Style 'cage acts'.

Wow. That's kinda hot. I'm not against that.

tim said...

Something interesting about Clive's chart...

http://bendhousingdata.com/

The 300k & under category is not dropping for the winter. I assume that's because the delusionals above $300k are dropping down into the sub-$300k group.

Just wait until spring. The inventory is going to be awe-inspiring.

bruce said...

From my last comment on the old post comments (no, I wasn't the first, that's BP wanna be):

Check this out, Unemployment by Metro Area:

http://www.bls.gov/web/laummtrk.htm

Interesting. UT is looking good, as are several heartland areas and oil/gas areas.

bruce said...

Re:
One of the MOST significant rumor's I'm hearing is that they're going to Give Linda Johnson ( PUG BITCH WHO LOST ), they're going to give her Friedman's seat, it turns out that without her CPA brains, the city-council doesn't know what to do with the cooked-books that Friedman&Johnson had put together in the recent years.

###

Telfer's seat, in January. I'm going to go watch the interview process after the JRMB meeting tomorrow.

IHateToBurstYourBubble said...

Foreclosures boost homes sales

Carolyn Said, Chronicle Staff Writer

Friday, November 21, 2008

19:12 PST -- With banks unloading a record number of foreclosures, Bay Area home sales soared and the median price plummeted in October, according to a real estate report released Thursday.

Most of the action - and the bargains - were in areas where bank repossessions have become a fact of life. Almost half of all existing homes sold were foreclosures. Their bargain-basement prices sent the Bay Area median tumbling 45 percent during the past year to $375,000, according to research firm MDA DataQuick of San Diego.

Despite an economic crisis and a stock market plunge, the fire-sale prices pulled more buyers into the market. A total of 5,624 resale homes changed hands in the nine-county Bay Area in October, up 66.2 percent from a year ago.

"People searching for that bargain were pretty committed; even after all the disturbing news on the economy and financial markets, they decided to pull the trigger," said Andrew LePage, a DataQuick analyst. "Perhaps it reflects the number of people who feel like real estate right now, in relative terms, is not a bad place to park their money."
First-time buyers benefit

Besides investors, first-time home buyers who had been priced out of the market now are able to gain a foothold.

"I always dreamed, but never thought I would be able to swing it," said David Prazniak, 46, a United Airlines flight attendant. He is days away from closing on a two-bedroom stucco home near the Oakland Zoo.

He's paying $170,500 - about one third of the property's $495,000 price in early 2007. His monthly payments of around $1,100 for principal, interest, taxes and insurance will be less than his rent.

In a sign of the bargain-hunting competition, Prazniak was outbid on four foreclosed homes.

"If it's in a good neighborhood and it's a decent house, and it lists at $200,000 or below, it goes in five days to a week, generally over asking with multiple offers," he said, sounding like a veteran of the bubble years - except for the price reference.

Gary DiGrazia, a Realtor with Re/Max in Motion in Castro Valley, echoed that sentiment. Bank-owned properties, "if they're priced right, are on fire right now," he said. "They sell within the first week with multiple offers. If a neighborhood is selling for $300,000, (foreclosures) might be priced at $250,000."

The California Association of Realtors said Thursday that entry-level affordability in the state had more than doubled in the third quarter. It showed that 53 percent of California households could afford a starter home, compared with 24 percent a year ago. For the Bay Area, the number was 35 percent, up from 18 percent last year.

'Decent place for $1,200'

"If you want to buy a $170,000 house and are prepared to dig through a lot of horse poop to find the pony, you can find it in a decent neighborhood," said Doug Gillies of Douglas & Co. Real Estate Inc. in San Francisco. "Is it Pacific Heights? No. But with a little paint, yard work, hopefully nothing structural, you could have a decent place for $1,200 a month. It's brought in a lot of buyers who felt like they were going to be permanent tenants."

The Bay Area median price hasn't been this low since October 2001, when it was $370,000. However, the median's tumble reflects more the swing to lower-priced homes in lower-priced areas where foreclosures are commonplace, rather than an across-the-board depreciation.

"This doesn't mean every Bay Area house has gone back to 2001 levels, but it does tell an interesting story about where people are buying and, to some extent, where they are not," LePage said.

A separate report on Bay Area prices from real estate investment services firm Marcus & Millichap of Encino (Los Angeles Country) underscored the market's bifurcation. Most price declines are occurring in lower-priced areas, according to the report, which compared the first eight months of this year to the same period last year. In higher-priced communities, the median has just edged down. The report said the median fell 2 percent in areas where prices are between $700,000 and $1 million, and increased in areas where it was more than $1 million, such as Atherton, Mill Valley and Los Gatos.

Subprime boom

During the boom years, prices in lower-cost areas appreciated at a torrid pace as subprime buyers rushed in.

"When you fast-forward to what we've experienced since the peak, it's the same image but reversed," said Hessam Nadji, managing director of research at Marcus & Millichap. "The biggest price declines are in the smaller price categories, below $500,000. Prices are holding up or there is even some appreciation in the higher-priced categories."

As has been the case in recent months, DataQuick's report showed that counties with the most foreclosures saw sales increase the most and medians decline the most. In Contra Costa County, where 58.9 percent of all resold homes were foreclosures, the median resale price was down 48.8 percent to $275,000. At the other end of the spectrum, in Marin County, where 17.2 percent of sales were foreclosures, the median was down 13.1 percent.

Among all Bay Area homes, including new, resale and condos, the median also stood at $375,000, while the total number of sales was 7,613, up 38.8 percent from 5,486 a year ago.

For resale condos, the median was down 40.6 percent to $300,000, and sales volume was up 28.1 percent to 1,277.

For new homes and condos, the median was down 17 percent to $505,000, and sales were down 35.6 percent to 712 properties.

IHateToBurstYourBubble said...

Just wait until spring. The inventory is going to be awe-inspiring.

See that gently rising series of tops & bottoms, Timmy? That's from the inexorable push of that lower purple line. That's the working class that HAS TO sell.

"Just wait until Spring".... I'm not sure if that's the correct sentiment anymore. Makes it sound like we'll be OK after THIS Spring... when really it's not going to end this Spring... or the next... or the next.... or the next...

IHateToBurstYourBubble said...

Anyone notice the DEAFENING SILENCE of the NAR head economist recently?

Yeah, Yun & his perma-bull buddies have 100% SHUT UP about WE'RE ABOUT TO REBOUND, THINGS LOOK STRONGER IN 6 MONTHS, HOMES WILL ALWAYS BE WONDERFUL INVESTMENTS FOR THE LONG HAUL, and other such bullshit.

Only took the Total Collapse of The AmeriKKKan economy to shut these lying bastards up.

tim said...

Last couple things I heard about Yun were basically claims that the gov't was to blame for the housing crash because they weren't doing enough to prop up prices. That was way back in the summer.

It's possible the media is occupied with enough financial Armageddon that they no longer need to go to the NAR for their pointless statements.

Anonymous said...

Give Linda Johnson ( PUG BITCH WHO LOST ), they're going her the ... seat ...

###

Telfer's seat, in January. I'm going to go watch the interview process after the JRMB meeting tomorrow.

*

Whatever KRUSTY, but the rumors I'm hearing is that Linda wants the seat, and she is going to get it, sort of sad, we voted her out, and she comes back. Quid Pro Quo, ...

Anonymous said...

For City of Bend FY2008-09, legal appropriations for all departments
total $913,000, prior years average was $300k, ... 3X increase ... WTF?

ISSUE / COUNCIL DECISION & DISCUSSION POINTS: Council is asked to approve a new
in-house legal division by:
(1) Holding a public hearing on the attached supplemental budget to increase revenues and
expenditure appropriations by $400,000 for a legal division in the Administration &
Financial Services division of the Internal Service Fund ;
(2) Approving the attached resolution approving the supplemental budget and
(3) Authorizing 3.0 FTEs in the new legal division for 2 attorneys and 1 legal assistant.
Funding for the legal division will come from transferring legal budget appropriations
available in all departments of the City.
BACKGROUND: Forbes & Schannauer LLP currently provide general legal services for the
City. Specialized services are contracted to other legal firms. City management has decided
to hire in-house legal counsel to enhance legal services provided to all city departments.
The in-house attorneys are expected to have expertise in the following areas: land
acquisitions, public-private partnerships, development agreements, state land use laws, as
well as other regulations governing municipal activities such as ADA, labor relations,
Page 2
Form revised March 2008
employment, public contracting and risk management. Contract attorneys will continue to be
retained for issues requiring specialized knowledge.
The proposed budget for the legal division is estimated at $400,000 for FY 2008-09 and
consists of the following expenses:
Est. FY08-09 Budget
Personnel:
Attorney 1
142,000
$
expected hiring in Fall 2008
Attorney 2
114,000 expected hiring in Fall 2008
Legal Assistant
49,000 expected hiring in Fall 2008
Total Personnel Costs
305,000
Materials & Services
25,000
Office & Furniture
20,000
Contingency
50,000
Total Legal Budget
400,000
$
CURRENT YEAR BUDGET IMPACTS (Department): ORS 294.480 allows a governing
body to adopt and appropriate a Supplemental Budget by resolution following a properly
noticed public hearing. This Supplemental Budget was noticed on or before August 29, 2008.
Because the proposed budget adjustment recognizes and appropriates additional revenues
and expenditures that were not anticipated in the budget, a supplemental budget process is
required for the Internal Service Fund–Administration & Financial Services Division.
The legal division will be funded through interfund transfers of legal appropriations available
from the operating departments. For FY2008-09, legal appropriations for all departments
total $913,000. By transferring $400,000 to the Administration & Financial Services Division,
the remaining budget for contracted legal services in the operating departments will be
$513,000.
FINANCIAL PERSPECTIVE & RECOMMENDATION (Finance):
Over the last 5 years, the City’s expenditures for general legal services averaged $350,000
per year. The cost of bringing legal services in-house will increase the average for general
legal services. It is anticipated that the cost for specialized services will be reduced over
time.

Anonymous said...

OREO's Treasury to be ran by Jewish Cabal: Who would have guessed

Bend Bulletin (Bend,OR)
November 22, 2008

BILDERBERG MEETING held in Chantilly VA, June 5-8 2008, the Jew Timothy Geithner, President of the New York Branch of the Federal Reserve and Bilderberg 2008 attendee, penned a commentary piece in The Financial Times.

Geithner’s article calls for a “global financial system” operating under a unified regulatory framework. Here is an excerpt:

— “The main global banks need to operate under a unified framework that provides a stronger form of consolidated supervision.

To complement this we need to put in place a stronger framework of oversight authority over the critical parts of the payments system – not just the established clearing and settlements systems - but the infrastructure that underpins the decentralized over-the-counter markets. The Federal Reserve should play a central role in such a framework.” —

Indeed, this Jew, Timothy Geithner, is a Zionist careerist with a lust for power! Already the Federal Reserve has 4 Jews ruling its 5-member Board of Governors. It looks like this Jew Geithner would like to be Chairman of the Board & rule the world! (He’ll still be a Rothschild puppet).

http://www.realjewnews.com/?p=218

Federal Reserve: A Private Jew Bank Strangling America!

http://www.realjewnews.com/?p=177

Bilderberg Group - A Jewish Who’s Who!

http://www.realjewnews.com/?p=216

Anonymous said...

Barack Obama by his friends you shall know him

Written by www.daily.pk
Thursday, 20 November 2008 04:19

With the initial euphoria of the election of the first "black" president of the United States of America slowly subsiding, it is time to take a good look at the colour of Obama's politics rather than skin. It quickly becomes apparent then that there won't be much change after all. Early on in his campaign, Barack Obama gave a speech to the American Israel Public Affairs Committee (AIPAC) indicating his unwavering support for Israel. His selection of staff and advisers confirms that he is not going back on his word.

Obama's campaign manager was David Axelrod, an American Jew from Manhattan, who will be rewarded with the post of Chief White House advisor. As Chief of Staff, Obama selected Rahm Israel Emanuel, who also holds Israeli citizenship and served as a volunteer in the Israeli Defense Force (IDF). John Podesta, also Jewish, heads the new president's transition team. Likely candidates for treasury secretary are Lawrence (Larry) Summers, Timothy Franz Geithner, and Paul Volcker, all Jewish. John Kerry, whose parents converted from Judaism to Roman Catholicism, might become Secretary of State. An exception with regard to kosher credentials might be former CIA director Robert Gates, who could be invited to stay on as defence secretary - not much change in Iraq or Afghanistan then. James (Jim) Steinberg, likely to become National Security Advisor, is part of the tribe again, as is another contender for this post, Dennis Ross, who was Clinton's Middle East Envoy. The few expected black appointments will be safe choices, such as Susan Rice, potential Ambassador to the UN, a former protege of the infamous Madeleine Albright.

So colour really doesn't matter all that much. Those who hope that the Bush administration's unconditional support for Israeli aggression might change with Obama will be in for a nasty surprise. Of course, McCain wouldn't have been any different. And just for the record: Given that only about three percent of the American population are Jewish, their heavy concentration in the corridors of power is, of course, purely coincidental!

bruce said...

Re: sort of sad, we voted her out, and she comes back. Quid Pro Quo, ...

###

Yeah, it is. I need to go back and edit that recording of the CC meeting where she asked John Russell who he is and what his department does.

bruce said...

Re: Jewish domination.

It will be interesting going forward on the I/P issue...

If any one is interested in seeing sausage being made, the next public meeting of the JRMB is Noon Monday in the Pilot Butte Conference Room at City Hall. You have to go upstairs and ask the receptionist to guide you. It's small and will probably be packed pretty tightly.

Here is the agenda:
http://www.ci.bend.or.us/november_24_2008.html

IHateToBurstYourBubble said...

Wow... just downtown, and it was DEAD.

Toomies actually closed up their lunch hour earlier. Goody's had a trickle. That new candy shop, Powells(?), had a decent crowd.

Volo Patron Watch: Day 176. Still not a single meal served that I've seen. Please report all confirmed sightings of ANYONE eating at Volo to this blog!

More thugs than anything downtown.

IHateToBurstYourBubble said...

Why Citi, Wachovia, WaMu, Lehman, Bear Stearns, and many others will completely collapse:

A Minsky moment is the point in a credit cycle or business cycle when investors have cash flow problems due to spiraling debt they have incurred in order to finance speculative investments. At this point, a major selloff begins due to the fact that no counterparty can be found to bid at the high asking prices previously quoted, leading to a sudden and precipitous collapse in market clearing asset prices and a sharp drop in market liquidity.[1]

The term was coined by Paul McCulley of PIMCO in 1998, to describe the 1998 Russian financial crisis,[2] and was named after economist Hyman Minsky. The Minsky moment comes after a long period of prosperity and increasing values of investments, which has encouraged increasing amounts of speculation using borrowed money.


Just in case you're confused as to what is happening... why EVERYONE is going down.

Anonymous said...

The richer getting poorer for once? thats not good for anyone not for the lawnmowers or handymen or just everyone in general. The only thing that is for sure what goes around comes around and that is one thing that is going to inflict the ones in power.

Anonymous said...

I did some work inside Volo during construction. All I could think was "these people are insane". They dumped some huge dollars into that place. The owner seemed to be a nice guy. I felt like telling him to get out while he still had clothes on his back.

tim said...

Where's Volo? Downtown, right?

Anonymous said...

careful what you wish for? go to burns or johnday don't be jubilent that bend is dead it could just affect you in some way or another. I grew up in eastern oregon in the 70's we had recruiters from alaska to get all the farm boys to the aleutian islands.

tim said...

What we wish for has little effect on the economics driving the disaster. The city made its bed long ago.

Point taken on how bad a depressed city in the middle of Oregon can get.

Anonymous said...

Bend won't die, just a few crusty old timers and thugs will be here.
Bend is too big to close:) The chaffe will leave.
I hear UPS has begun laying off in Bend.

BBB

Anonymous said...

the same people i hear waxmen has relitives in oww2 and they are going to sue. this just a rumor mind you some guy named terry.

tim said...

>>I hear UPS has begun laying off in Bend.

Before Christmas? You sure? I'd think there's be tons of shipping going on in the next month.

rotorman said...

Here is the thing I disagree about. If Bend has people with lots of capital and they have lost a bunch of it, what difference does it make? If I still have a couple of mil left, a nice house, and fancy car, mostly paid for, I would continue getting my lawn mowed, have my car washed and eat in restaurants. Most people with that much money can't spend it all anyway. They may be feeling a little poor but I don't think it will change their life style dramatically.

tim said...

rotorman,

Ah, but how many rich and how many posers?

How many of those houses belong to people with millions, and how many belong to Realtors who thought they were on the way to rich?

Anonymous said...

re rotorman:many fortunes were lost in the 1930's if I were you mabe listen to peter schiff the dollar is going to dive soon , the deflaftion that we are going through now is short lived. hyperinflation is next invest in substance.

IHateToBurstYourBubble said...

Most people with that much money can't spend it all anyway.

It's ON THE MARGIN.

The diff between Alwaleed buying ANOTHER G6, or not. Or the diff between Les Schwab buying another Cessna 400 or not...

We're NOT going into some sort of Black Hole. It just will feel like that.

ON THE MARGIN describes one HELL OF A LOT of the growth of our economy for the last 25-30 years. ON THE MARGIN, we got a credit card... then another... then another...

We have incrementally INCHED towards disaster. NOW we are there. Just cuz we snuck up on it, doesn't mean it'll hurt less.

And BEND is a place that is ALL MARGIN. Look around. There's nothing of any real substance here, nothing that can last. There are $800K homes for $175K humans. We're fucked.

Anonymous said...

http://www.cnbc.com/id/15840232?video=935047784

IHateToBurstYourBubble said...

Most people with that much money can't spend it all anyway.

And this describes an incredibly SMALL number of people. Very tiny. Virtually all people could spend what they make or have saved, with ease, if they were given free reign w/o consequences, and were to die tomorrow.

Bend Media wants you to believe that Bend is NOTHING BUT these hyper-wealthy types. Bullshit. Precious few. This is a Regular Place.

IHateToBurstYourBubble said...

Even Bledsoe will be hesitant to start another upscale WHOREHOUSE, given the disaster that Volo has turned out to be.

IHateToBurstYourBubble said...

Yup Timmy, Volo is downtown Bend:

The second-floor club will cater to the growing ranks of destination resort residents in Central Oregon who want to meet downtown for a catered business meeting or to entertain guests, Adam Bledsoe said.

“It’s like a country club minus the golf,” he said.

Another partner, Whitefish, Mont., attorney Chad Wold, also founded The Loft of Whitefish and The Loft of Missoula in Montana, Adam Bledsoe said.

The 4,800-square-foot club will become a center for business and charity meetings, private events and parties, Adam Bledsoe said.

Membership rates will be approximately $200 per month plus a still undetermined initiation fee, he said.


The "Initiation Fee" ended up being Bledsoe jerking off 3 gallons of donkey spunk up your corn hole.

Anonymous said...

whether bend media or not hyperinflation is just around the corner. Just how is the government going to finance the bailout? print or create money via punching numbers into a computer. How much faith do foriegn investors have in the dollar?taxes aren't going to finance this. buckel your seat belts people cause we are in the ride of a lifetime.This is a commen sense thing don't be in denial.

tim said...

So the Loft is upstairs of Volo?

Weird. I've spent a few hours in the Loft and I didn't even know Volo existed.

LavaBear said...

What I find funny is the fact the truly wealthy people I know in town...you'd never ever be able to tell. They would be the last guy at the bar that you would point to as being wealthy. And they sure as fuck didn't become wealthy spending money. I end up picking up the tab because they're way too fucking cheap to pay.

tim said...

Schiff on Bloomberg last Friday.

http://www.youtube.com/watch?v=4JG9Fsh_KJ

We're a complete disaster.

bruce said...

As an aside, Venus and Mars are stunning in our southern sky tonight.

For a little mental work, imagine how Venus (the bottom right, bright one) is closer than we are to the Sun, while Mars (upper left) is farther from the sun than Earth.

Where do they all fit in 3D space?

Then imagine Galileo doing this a few hundred years ago.

As compared to the dumb fucks running things for the last eight years.

tim said...

"As compared to the dumb fucks running things for the last eight years."

The dumb fucks have always run things. They did when Galileo was looking at the stars. And they will for the next 4 years, too.

Refer to Schiff's repeated rants against Obama and now Geithner (in video above).

Anonymous said...

watch this guys and gals the last year the usa was debt free was 1849?http://www.youtube.com/watch?v=O_TjBNjc9Bo&eurl=http://flourishingincrisis.wordpress.com/ iousa

Anonymous said...

http://www.youtube.com/watch?v=O_TjBNjc9Bo&eurl=http://flourishingincrisis.wordpress.com/

Anonymous said...

If you thought wamu was going under was bad citigroup is a much bigger giant to fall.http://www.marketwatch.com/news/story/Citi-shares-record-slump-credit/story.aspx?guid=%7BCBD75AB7-DE8D-4B01-BA17-C34DA4901487%7D&ref=patrick.net

Anonymous said...

reality sucks but it is better to be in the know than not.For that will prepare you for what is to come.

Anonymous said...

REYKJAVIK, Nov 22 (Reuters) - Thousands of Icelanders demonstrated in Reykjavik on Saturday demanding the resignation of Prime Minister Geir Haarde and Central Bank Governor David Oddsson for failing to stop a financial meltdown in the country.

It was the latest in a series of protests in the capital since the financial meltdown that crippled the island's economy.

Hordur Torfason, a well-known troubadour in Iceland and the main organiser of the protests, said the protests would continue until the government stepped down.

"They don't have our trust and they are no longer legitimate," Torfason said as the crowds gathered in the drizzle before the Althing, the Icelandic parliament.

A separate group of 200-300 people gathered in front of the city's main police station demanding the release of a young protester being held there, Icelandic media reported.

Police in riot gear used pepper spray to drive back an attempt to free the protester during which several windows at the police station were shattered. The protester was later released after a fine he had been sentenced to pay was paid.

Iceland's three biggest banks -- Kaupthing, Landsbanki and Glitnir -- collapsed under the weight of billions of dollars of debts accumulated in an aggressive overseas expansion, shattering the currency and forcing Iceland to seek aid from the International Monetary Fund (IMF).

This week, the North Atlantic island nation of 320,000 secured a package of more than $10 billion in loans from the IMF and several European countries to help it rebuild its shattered financial system.

Despite the loans, Iceland faces a sharp economic contraction and surging unemployment while many Icelanders also risk losing their homes and life savings.

A young man climbed onto the balcony of the Althing building, where the president appears upon inauguration and on Iceland's national day, and hung a banner reading: "Iceland for Sale - $2.100.000.000", the amount of the loan Iceland is getting from the IMF.

The rally lasted less than one hour and as daylight began to wane, demonstrators drifted away into the nearby coffee shops where the price of a cup of coffee has shot up to 300 kronas in the last few weeks, up by about one third from before the crisis struck, as the currency has tumbled.

Opposition parties tabled a no-confidence motion in the government on Friday over its handling of the crisis, but the motion carries little chance of toppling the ruling coalition which has a solid parliamentary majority.

"I've just had enough of this whole thing," said Gudrun Jonsdottir, a 36-year-old office worker.

"I don't trust the government, I don't trust the banks, I don't trust the political parties, and I don't trust the IMF. We had a good country here and they've ruined it."

My reaction: It looks like Icelanders are progressing from a state of shock to a state of anger. I expect events will continue to detiorate towards violence and anarchy. The scary part is that, when the treasury bubble bursts, America's disintegration will be far worse than anything Iceland experiences.




Funny how you don't hear so much about what is going on in iceland by the mainstream media

tim said...

What's that quote? "Iceland was a hedge fund masquerading as a country."

Anonymous said...

$300B just to citi, think about Geithners secret 2-5TRILLION dollar 'investment'. $300B just to citi this week, anybody counting?

The Wall Street Journal


Nov. 23, 2008

The federal government agreed Sunday to take unprecedented steps to stabilize Citigroup by moving to guarantee close to $300 billion in troubled assets weighing on the bank's books.

Anonymous said...

Blogger IHateToBurstYourBubble said...

Wow... just downtown, and it was DEAD.

*
Come over to the dark-side at Deschutes Brewpub on monday, we're packed.

Our Krusty(BP) is giving head in the head for $1 a job.

Roll on, orck on, it endb,.

IHateToBurstYourBubble said...

"I don't trust the government, I don't trust the banks, I don't trust the political parties, and I don't trust the IMF. We had a good country here and they've ruined it."

Amen, brother.

IHateToBurstYourBubble said...

Working YouTube link:

Peter Schiff on Bloomberg TV 11/21/08 Great Interview

IHateToBurstYourBubble said...

Big project is moving, but slowly
Mercato, a $75M mixed-use project in Bend, gets approval for 5-year phased construction

By Jeff McDonald / The Bulletin
Published: November 24. 2008 4:10AM PST



High commercial vacancy rates in Bend have stalled one of the city’s major projects, but a phased approach to construction approved last month by the city of Bend could allow the developer to complete the project in time for a market recovery.

Mercato, the name for the planned and approved $75 million retail, office, restaurant and residential project on the former crane shed site between The Old Mill District and downtown Bend, would be modeled after San Francisco’s Ferry Building Marketplace, a historic building that was remodeled in 2002, said Stephen Trono, of Trono Development, Inc.

Like the Ferry Building, the Mercato would hold a European-style marketplace with different restaurants and retail shops, Trono said. The Mercato project also was approved for 50 condominiums, Trono said.

“I’m very happy I have not started that project yet,” Trono said referring to the difficult real estate market.

Mercato got a reprieve from the city of Bend in October when it was allowed to phase the project over five years, rather than begin con- struction in 2009.

Its previously approved plans had required the developer to start construction early next year.

Under the new plan, grading, foundation work for a smaller building and foundation work for an underground parking garage would be completed in 2009, 2010 and 2011, respectively. Most of the grading work, including weed removal, has already occurred, Trono said.

Major construction of the building will occur in 2012 and 2013, with opening slated in 2014, Trono said.

“The phasing plan will allow us to have market timing,” Trono said. “I am hopeful that when the market begins to turn around, and there are enough positive signs, that in 2011 we can start significant construction.”

Currently, there’s a glut of empty commercial space on the market.

Bend’s office and retail vacancy rates jumped to 17.1 percent and 9.7 percent, respectively, in the third quarter, up from 13.5 percent and 6.8 percent in the previous quarter, according to Compass Commercial Real Estate Services.

The office vacancy rate was the highest in Bend since the firm started measuring commercial vacancy in 1993, said Darren Powderly, a broker with Compass.

“Stephen Trono has a great vision for Mercato, and it will come together in time,” Powderly said. “But obviously it makes no sense to start the project now.”

Because of its high visibility between the highly successful Old Mill District and Bend’s downtown, the Mercato site is one of the premier vacant commercial sites in Central Oregon, Powderly said.

“Something really cool will happen there when the market comes back,” he said.

The site has a connection to Bend’s timber past.

In 2004, former owners of the site tore down what was then the 67-year-old Brooks-Scanlon crane shed, causing an uproar because the action occurred without city approval and in the middle of the night. Trono purchased the property for $5.1 million in March 2005.

The Mercato project would make historic references to the crane shed with original photos dispersed throughout and would be designed with reference to the original building, Trono said.

IHateToBurstYourBubble said...

Yeah, I bet Trono is THRILLED he hasn't started this project yet.

The millions in holding costs & capital losses must bring him endless glee every single day.

IHateToBurstYourBubble said...

Major construction of the building will occur in 2012 and 2013, with opening slated in 2014, Trono said.

Yet Another Pack Of Lies.

Mercato WILL NOT GET BUILT.

The City "agreed" to a "phased" build because Trono CANNOT & WILL NOT get the money.

This "PHASED" build is essentially a cancellation of the project. "A Grand Opening by 2014"? Uh huh.

Just call it like it is Trono/Bulletin: This project is DOA & WILL NEVER GET BUILT. Trono WILL NEVER GET FUNDED, EVER. He's had 3 years, during which time there was a GLIMMER OF HOPE that he could get that money. World's changed, dumbshits. You will NEVER get the money now.

Call this what it is: MERCATO'S DEAD.

IHateToBurstYourBubble said...


“Something really cool will happen there when the market comes back,” he said.


All I know is it will not be Mercato.

Maybe a circus. Or a flea market.

Anonymous said...

[ NAR lobby's for $250B Bailout ]

2nd Biggest Bunch of Crooks

November 24, 2008
So, the homebuilders, the second biggest bunch of crooks in this nation (following the bankers who sliced, diced, traded, sold, and misrepresented all those mortgages and the frankensteins that followed), want a $250 billion taxpayer-funded bailout.

Of course, the shameless, serial liars of the National Association of Realtors want taxpayers to subsidize a new wave of housing porn as well, with taxpayers footing the bill on cheap loans so that more people can be conned into overpaying for overprices houses.

The homebuilders' proposal would offer home buyers a tax credit equal to 10% of the home's value, capping it at $22,000, nearly three times the $7,500 credit Congress offered to new buyers earlier this year. Builders say the earlier credit didn't work because it wasn't big enough and had to be repaid.

Builders also want subsidies for interest rates on 30-year fixed-rate mortgages for government-backed "conforming" loans, which currently are around 6.2%, to bring rates down to 3% for loans made in the first half of 2009 and 4% for those in the second half of the year. Realtors are pushing a 4.5% interest-rate buy-down for new loans. Lawrence Yun, the chief economist for the National Association of Realtors, estimates that each 1% decline in interest rates could generate between 500,000 and 800,000 home sales.

Fix Housing First argues (incorrectly) that all we need to do is stop the falling prices of homes and everyting will be fixed. What the jerk homebuilders won't get through their greedy skulls is that homes simply aren't worth the market "ask" in many places, because those bubble values were built on bullspit.

If anyone in Congress makes a move on this, I'll provide the feathers. You guys give me a call, we'll pick up some budget tar, a few rails, and head to town.

Anonymous said...

'Solution is to borrow money' ...

'Sounds like Bend, borrow money, ...'

Anonymous said...

Spend money, Build more shit in Bend, ... that is the solution,...

Please define the problem??

Anonymous said...

Below is the correct link to this 'jewel'.

Peter Schiff new Interview Bloomberg TV 11/21
Great Interview!!

Part 1

http://www.youtube.com/watch?v=4JG9Fsh_KJY

Part 2

http://www.youtube.com/watch?v=dpfOgpSdAgM

Anonymous said...

UPDATE !! FORGET $2T unknown, ... its now a secret $7.4T

Fed Pledges Top $7.4 Trillion to Ease Frozen Credit (Update1)
Bloomberg - 5 hours ago


Bloomberg has requested details of Fed lending under the US Freedom of Information Act and filed a federal lawsuit against the central bank Nov.

Anonymous said...

See Schiff see's a 4000 DOW!!

Who would have guessed?

Anonymous said...

The System Implodes: The 10 Worst Corporations of 2008

by Robert Weissman

AIG
Cargill
Chevron
CNPC
Constellation Energy
Dole
General Electric Imperial Sugar
Philip Morris Int’l.
Roche

2008 marks the 20th anniversary of Multinational Monitor’s annual list of the 10 Worst Corporations of the year.

In the 20 years that we’ve published our annual list, we’ve covered corporate villains, scoundrels, criminals and miscreants. We’ve reported on some really bad stuff — from Exxon’s Valdez spill to Union Carbide and Dow’s effort to avoid responsibility for the Bhopal disaster; from oil companies coddling dictators (including Chevron and CNPC, both profiled this year) to a bank (Riggs) providing financial services for Chilean dictator Augusto Pinochet; from oil and auto companies threatening the future of the planet by blocking efforts to address climate change to duplicitous tobacco companies marketing cigarettes around the world by associating their product with images of freedom, sports, youthful energy and good health.

But we’ve never had a year like 2008.

The financial crisis first gripping Wall Street and now spreading rapidly throughout the world is, in many ways, emblematic of the worst of the corporate-dominated political and economic system that we aim to expose with our annual 10 Worst list. Here is how.

Improper political influence: Corporations dominate the policy-making process, from city councils to global institutions like the World Trade Organization. Over the last 30 years, and especially in the last decade, Wall Street interests leveraged their political power to remove many of the regulations that had restricted their activities. There are at least a dozen separate and significant examples of this, including the Financial Services Modernization Act of 1999, which permitted the merger of banks and investment banks. In a form of corporate civil disobedience, Citibank and Travelers Group merged in 1998 — a move that was illegal at the time, but for which they were given a two-year forbearance — on the assumption that they would be able to force a change in the relevant law. They did, with the help of just-retired (at the time) Treasury Secretary Robert Rubin, who went on to an executive position at the newly created Citigroup.

Deregulation and non-enforcement: Non-enforcement of rules against predatory lending helped the housing bubble balloon. While some regulators had sought to exert authority over financial derivatives, they were stopped by finance-friendly figures in the Clinton administration and Congress — enabling the creation of the credit default swap market. Even Alan Greenspan concedes that that market — worth $55 trillion in what is called notional value — is imploding in significant part because it was not regulated.

Short-term thinking: It was obvious to anyone who cared to look at historical trends that the United States was experiencing a housing bubble. Many in the financial sector seemed to have convinced themselves that there was no bubble. But others must have been more clear-eyed. In any case, all the Wall Street players had an incentive not to pay attention to the bubble. They were making stratospheric annual bonuses based on annual results. Even if they were certain the bubble would pop sometime in the future, they had every incentive to keep making money on the upside.

Financialization: Profits in the financial sector were more than 35 percent of overall U.S. corporate profits in each year from 2005 to 2007, according to data from the Bureau of Economic Analysis. Instead of serving the real economy, the financial sector was taking over the real economy.

Profit over social use: Relatedly, the corporate-driven economy was being driven by what could make a profit, rather than what would serve a social purpose. Although Wall Street hucksters offered elaborate rationalizations for why exotic financial derivatives, private equity takeovers of firms, securitization and other so-called financial innovations helped improve economic efficiency, by and large these financial schemes served no socially useful purpose.

Externalized costs: Worse, the financial schemes didn’t just create money for Wall Street movers and shakers and their investors. They made money at the expense of others. The costs of these schemes were foisted onto workers who lost jobs at firms gutted by private equity operators, unpayable loans acquired by homeowners who bought into a bubble market (often made worse by unconscionable lending terms), and now the public.

What is most revealing about the financial meltdown and economic crisis, however, is that it illustrates that corporations — if left to their own worst instincts — will destroy themselves and the system that nurtures them. It is rare that this lesson is so graphically illustrated. It is one the world must quickly learn, if we are to avoid the most serious existential threat we have yet faced: climate change.

Of course, the rest of the corporate sector was not on good behavior during 2008 either, and we do not want them to escape justified scrutiny. In keeping with our tradition of highlighting diverse forms of corporate wrongdoing, we include only one financial company on the 10 Worst list. Here, presented in alphabetical order, are the 10 Worst Corporations of 2008.

AIG: Money for Nothing

There’s surely no one party responsible for the ongoing global financial crisis.

But if you had to pick a single responsible corporation, there’s a very strong case to make for American International Group (AIG).

In September, the Federal Reserve poured $85 billion into the distressed global financial services company. It followed up with $38 billion in October.

The government drove a hard bargain for its support. It allocated its billions to the company as high-interest loans; it demanded just short of an 80 percent share of the company in exchange for the loans; and it insisted on the firing of the company’s CEO (even though he had only been on the job for three months).

Why did AIG — primarily an insurance company powerhouse, with more than 100,000 employees around the world and $1 trillion in assets — require more than $100 billion ($100 billion!) in government funds? The company’s traditional insurance business continues to go strong, but its gigantic exposure to the world of “credit default swaps” left it teetering on the edge of bankruptcy. Government officials then intervened, because they feared that an AIG bankruptcy would crash the world’s financial system.

Credit default swaps are effectively a kind of insurance policy on debt securities. Companies contracted with AIG to provide insurance on a wide range of securities. The insurance policy provided that, if a bond didn’t pay, AIG would make up the loss.

AIG’s eventual problem was rooted in its entering a very risky business but treating it as safe. First, AIG Financial Products, the small London-based unit handling credit default swaps, decided to insure “collateralized debt obligations” (CDOs). CDOs are pools of mortgage loans, but often only a portion of the underlying loans — perhaps involving the most risky part of each loan. Ratings agencies graded many of these CDOs as highest quality, though subsequent events would show these ratings to have been profoundly flawed. Based on the blue-chip ratings, AIG treated its insurance on the CDOs as low risk. Then, because AIG was highly rated, it did not have to post collateral.

Through credit default swaps, AIG was basically collecting insurance premiums and assuming it would never pay out on a failure — let alone a collapse of the entire market it was insuring. It was a scheme that couldn’t be beat: money for nothing.

In September, the New York Times’ Gretchen Morgenson reported on the operations of AIG’s small London unit, and the profile of its former chief, Joseph Cassano. In 2007, the Times reported, Cassano “described the credit default swaps as almost a sure thing.” “It is hard to get this message across, but these are very much handpicked,” he said in a call with analysts.

“It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions,” he said.

Cassano assured investors that AIG’s operations were nearly fail safe. Following earlier accounting problems, the company’s risk management was stellar, he said: “That’s a committee that I sit on, along with many of the senior managers at AIG, and we look at a whole variety of transactions that come in to make sure that they are maintaining the quality that we need to. And so I think the things that have been put in at our level and the things that have been put in at the parent level will ensure that there won’t be any of those kinds of mistakes again.”

Cassano turned out to be spectacularly wrong. The credit default swaps were not a sure thing. AIG somehow did not notice that the United States was experiencing a housing bubble, and that it was essentially insuring that the bubble would not pop. It made an ill-formed judgment that positive credit ratings meant CDOs were high quality — even when the underlying mortgages were of poor quality.

But before the bubble popped, Cassano’s operation was minting money. It wasn’t hard work, since AIG Financial Products was taking in premiums in exchange for nothing. In 2005, the unit’s profit margin was 83 percent, according to the Times. By 2007, its credit default swap portfolio was more than $500 billion.

Then things started to go bad. Suddenly, AIG had to start paying out on some of the securities it had insured. As it started recording losses, its credit default swap contracts require that it begin putting up more and more collateral. AIG found it couldn’t raise enough money fast enough — over the course of a weekend in September, the amount of money AIG owed shot up from $20 billion to more than $80 billion.

With no private creditors stepping forward, it fell to the government to provide the needed capital or let AIG enter bankruptcy. Top federal officials deemed bankruptcy too high a risk to the overall financial system.

After the bailout, it emerged that AIG did not even know all of the CDOs it had ensured.

In September, less than a week after the bailout was announced, the Orange County Register reported on a posh retreat for company executives and insurance agents at the exclusive St. Regis Resort in Monarch Beach, California. Rooms at the resort can cost over $1,000 per night.

After the House of Representatives Oversight and Government Reform Committee highlighted the retreat, AIG explained that the retreat was primarily for well-performing independent insurance agents. Only 10 of the 100 participants were from AIG (and they from a successful AIG subsidiary), the company said, and the event was planned long in advance of the federal bailout. In an apology letter to Treasury Secretary Henry Paulson, CEO Edward Liddy wrote that AIG now faces very different challenges, and “that we owe our employees and the American public new standards and approaches.”

New standards and approaches, indeed.

Cargill: Food Profiteers

The world’s food system is broken.
Or, more accurately, the giant food companies and their allies in the U.S. and other rich country governments, and at the International Monetary Fund and World Bank, broke it.

Thirty years ago, most developing countries produced enough food to feed themselves. Now, 70 percent are net food importers.

Thirty years ago, most developing countries had in place mechanisms aimed at maintaining a relatively constant price for food commodities. Tariffs on imports protected local farmers from fluctuations in global food prices. Government-run grain purchasing boards paid above-market prices for farm goods when prices were low, and required farmers to sell below-market when prices were high. The idea was to give farmers some certainty over price, and to keep food affordable for consumers. Governments also provided a wide set of support services for farmers, giving them advice on new crop and growing technologies and, in some countries, helping set up cooperative structures.

This was not a perfect system by any means, but it looks pretty good in retrospect.

Over the last three decades, the system was completely abandoned, in country after country. It was replaced by a multinational-dominated, globally integrated food system, in which the World Bank and other institutions coerced countries into opening their markets to cheap food imports from rich countries and re-orienting their agricultural systems to grow food for rich consumers abroad. Proponents said the new system was a “free market” approach, but in reality it traded one set of government interventions for another — a new set of rules that gave enhanced power to a handful of global grain trading companies like Cargill and Archer Daniels Midland, as well as to seed and fertilizer corporations.

“For this food regime to work,” Raj Patel, author of Stuffed and Starved, told the U.S. House Financial Services Committee at a May hearing, “existing marketing boards and support structures needed to be dismantled. In a range of countries, this meant that the state bodies that had been supported and built by the World Bank were dismantled by the World Bank. The rationale behind the dismantling of these institutions was to clear the path for private sector involvement in these sectors, on the understanding that the private sector would be more efficient and less wasteful than the public sector.”

“The result of these interventions and conditions,” explained Patel, “was to accelerate the decline of developing country agriculture. One of the most striking consequences of liberalization has been the phenomenon of ‘import surges.’ These happen when tariffs on cheaper, and often subsidized, agricultural products are lowered, and a host country is then flooded with those goods. There is often a corresponding decline in domestic production. In Senegal, for example, tariff reduction led to an import surge in tomato paste, with a 15-fold increase in imports, and a halving of domestic production. Similar stories might be told of Chile, which saw a three-fold surge in imports of vegetable oil, and a halving of domestic production. In Ghana in 1998, local rice production accounted for over 80 percent of domestic consumption. By 2003, that figure was less than 20 percent.”

The decline of developing country agriculture means that developing countries are dependent on the vagaries of the global market. When prices spike — as they did in late 2007 and through the beginning of 2008 — countries and poor consumers are at the mercy of the global market and the giant trading companies that dominate it. In the first quarter of 2008, the price of rice in Asia doubled, and commodity prices overall rose 40 percent. People in rich countries felt this pinch, but the problem was much more severe in the developing world. Not only do consumers in poor countries have less money, they spend a much higher proportion of their household budget on food — often half or more — and they buy much less processed food, so commodity increases affect them much more directly. In poor countries, higher prices don’t just pinch, they mean people go hungry. Food riots broke out around the world in early 2008.

But not everyone was feeling pain. For Cargill, spiking prices was an opportunity to get rich. In the second quarter of 2008, the company reported profits of more than $1 billion, with profits from continuing operations soaring 18 percent from the previous year. Cargill’s 2007 profits totaled more than $2.3 billion, up more than a third from 2006.

In a competitive market, would a grain-trading middleman make super-profits? Or would rising prices crimp the middleman’s profit margin?

Well, the global grain trade is not competitive.

In an August speech, Cargill CEO Greg Page posed the question, “So, isn’t Cargill exploiting the food situation to make money?” Here is how he responded:

“I would give you four pieces of information about why our earnings have gone up dramatically.

1. The demand for food has gone up. The demand for our facilities has gone up, and we are running virtually all of our facilities worldwide at total capacity. As we utilize our capacity more effectively, clearly we do better.
2. Fertilizer prices rose, and we are owners of a large fertilizer company. That has been the single largest factor in Cargill’s earnings.
3. The volatility in the grain industry — much of it created by governments — was an opportunity for a trading company like Cargill to make money.
4. Finally, in this era of high prices, Cargill over the last two years has invested $15.5 billion additional dollars into the world food system. Some was to carry all these high-priced inventories. We also wanted to be sure that we were there for farmers who needed the working capital to operate in this much more expensive environment. Clearly, our owners expected some return on that $15.5 billion. Cargill had an opportunity to make more money in this environment, and I think that is something that we need to be very forthright about.”

OK, Mr. Page, that’s all very interesting. The question was, “So, isn’t Cargill exploiting the food situation to make money?” It sounds like your answer is, “yes.”

Chevron: “We can’t let little countries screw around with big companies”

The world has witnessed a stunning consolidation of the multinational oil companies over the last decade.

One of the big winners was Chevron. It swallowed up Texaco and Unocal, among others. It was happy to absorb their revenue streams. It has been less willing to take responsibility for ecological and human rights abuses perpetrated by these companies.

One of the inherited legacies from Chevron’s 2001 acquisition of Texaco is litigation in Ecuador over the company’s alleged decimation of the Ecuadorian Amazon over a 20-year period of operation. In 1993, 30,000 indigenous Ecuadorians filed a class action suit in U.S. courts, alleging that Texaco had poisoned the land where they live and the waterways on which they rely, allowing billions of gallons of oil to spill and leaving hundreds of waste pits unlined and uncovered. They sought billions in compensation for the harm to their land and livelihood, and for alleged health harms. The Ecuadorians and their lawyers filed the case in U.S. courts because U.S. courts have more capacity to handle complex litigation, and procedures (including jury trials) that offer plaintiffs a better chance to challenge big corporations. Texaco, and later Chevron, deployed massive legal resources to defeat the lawsuit. Ultimately, a Chevron legal maneuver prevailed: At Chevron’s instigation, U.S. courts held that the case should be litigated in Ecuador, closer to where the alleged harms occurred.

Having argued vociferously that Ecuadorian courts were fair and impartial, Chevron is now unhappy with how the litigation has proceeded in that country. So unhappy, in fact, that it is lobbying the Office of the U.S. Trade Representative to impose trade sanctions on Ecuador if the Ecuadorian government does not make the case go away.

“We can’t let little countries screw around with big companies like this — companies that have made big investments around the world,” a Chevron lobbyist said to Newsweek in August. (Chevron subsequently stated that “the comments attributed to an unnamed lobbyist working for Chevron do not reflect our company’s views regarding the Ecuador case. They were not approved by the company and will not be tolerated.”)

Chevron is worried because a court-appointed special master found in March that the company was liable to plaintiffs for between $7 billion and $16 billion. The special master has made other findings that Chevron’s clean-up operations in Ecuador have been inadequate.

Another of Chevron’s inherited legacies is the Yadana natural gas pipeline in Burma, operated by a consortium in which Unocal was one of the lead partners. Human rights organizations have documented that the Yadana pipeline was constructed with forced labor, and associated with brutal human rights abuses by the Burmese military.

EarthRights International, a human rights group with offices in Washington, D.C. and Bangkok, has carefully tracked human rights abuses connected to the Yadana pipeline, and led a successful lawsuit against Unocal/Chevron. In an April 2008 report, the group states that “Chevron and its consortium partners continue to rely on the Burmese army for pipeline security, and those forces continue to conscript thousands of villagers for forced labor, and to commit torture, rape, murder and other serious abuses in the course of their operations.”

Money from the Yadana pipeline plays a crucial role in enabling the Burmese junta to maintain its grip on power. EarthRights International estimates the pipeline funneled roughly $1 billion to the military regime in 2007. The group also notes that, in late 2007, when the Burmese military violently suppressed political protests led by Buddhist monks, Chevron sat idly by.

Chevron has trouble in the United States, as well. In September, Earl Devaney, the inspector general for the Department of Interior, released an explosive report documenting “a culture of ethical failure” and a “culture of substance abuse and promiscuity” in the U.S. government program handling oil lease contracts on U.S. government lands and property. Government employees, Devaney found, accepted a stream of small gifts and favors from oil company representatives, and maintained sexual relations with them. (In one memorable passage, the inspector general report states that “sexual relationships with prohibited sources cannot, by definition, be arms-length.”) The report showed that Chevron had conferred the largest number of gifts on federal employees. It also complained that Chevron refused to cooperate with the investigation, a claim Chevron subsequently disputed.

Constellation Energy: Nuclear Operators

Although it is too dangerous, too expensive and too centralized to make sense as an energy source, nuclear power won’t go away, thanks to equipment makers and utilities that find ways to make the public pay and pay.

Case in point: Constellation Energy Group, the operator of the Calvert Cliffs nuclear plant in Maryland. When Maryland deregulated its electricity market in 1999, Constellation — like other energy generators in other states — was able to cut a deal to recover its “stranded costs” and nuclear decommissioning fees. The idea was that competition would bring multiple suppliers into the market, and these new competitors would have an unfair advantage over old-time monopoly suppliers. Those former monopolists, the argument went, had built expensive nuclear reactors with the approval of state regulators, and it would be unfair if they could not charge consumers to recover their costs. It would also be unfair, according to this line of reasoning, if the former monopolists were unable to recover the costs of decommissioning nuclear facilities.

In Maryland, the “stranded cost” deal gave Constellation (through its affiliate Baltimore Gas & Electric, BGE) the right to charge ratepayers $975 million in 1993 dollars (almost $1.5 billion in present dollars).

Deregulation meant that Constellation’s energy generating assets — including its nuclear facility at Calvert Cliffs — were free from price regulation. As a result, instead of costing Constellation, Calvert Cliffs’ market value increased.

Deregulation also meant that, after an agreed-upon freeze period, BGE was free to raise its rates as it chose. In 2006, it announced a 72 percent rate increase. For residential consumers, this meant they would pay an average of $743 more per year for electricity.

The sudden price hike sparked a rebellion. The Maryland legislature passed a law requiring BGE to credit consumers $386 million over a 10-year period. At the time, Constellation was very pleased with the deal, which let it keep most of its price-gouging profits — a spokesperson for the then-governor said that Constellation and BGE were “doing a victory lap around the statehouse” after the bill passed.

In February 2008, however, Constellation announced that it intended to sue the state for unconstitutionally “taking” its assets via the mandatory consumer credit. In March, following a preemptive lawsuit by the state, the matter was settled. BGE agreed to make a one-time rebate of $170 million to residential ratepayers, and 90 percent of the credits to ratepayers (totaling $346 million) were left in place. The deal also relieved ratepayers of the obligation to pay for decommissioning — an expense that had been expected to total $1.5 billion (or possibly much more) from 2016 to 2036.

The deal also included regulatory changes making it easier for outside companies to invest in Constellation — a move of greater import than initially apparent. In September, with utility stock prices plummeting, Warren Buffet’s MidAmerican Energy announced it would purchase Constellation for $4.7 billion, less than a quarter of the company’s market value in January.

Meanwhile, Constellation plans to build a new reactor at Calvert Cliffs, potentially the first new reactor built in the United States since the near-meltdown at Three Mile Island in 1979.

“There are substantial clean air benefits associated with nuclear power, benefits that we recognize as the operator of three plants in two states,” says Constellation spokesperson Maureen Brown.

It has lined up to take advantage of U.S. government-guaranteed loans for new nuclear construction, available under the terms of the 2005 Energy Act [see “Nuclear’s Power Play: Give Us Subsidies or Give Us Death,” Multinational Monitor, September/October 2008]. “We can’t go forward unless we have federal loan guarantees,” says Brown.

Building nuclear plants is extraordinarily expensive (Constellation’s planned construction is estimated at $9.6 billion) and takes a long time; construction plans face massive political risks; and the value of electric utilities is small relative to the huge costs of nuclear construction. For banks and investors, this amounts to too much uncertainty — but if the government guarantees loans will be paid back, then there’s no risk.

Or, stated better, the risk is absorbed entirely by the public. That’s the financial risk. The nuclear safety risk is always absorbed, involuntarily, by the public.

CNPC: Fueling Violence in Darfur

Many of the world’s most brutal regimes have a common characteristic: Although subject to economic sanctions and politically isolated, they are able to maintain power thanks to multinational oil company enablers. Case in point: Sudan, and the Chinese National Petroleum Corporation (CNPC).

In July, International Criminal Court (ICC) Prosecutor Luis Moreno-Ocampo charged the President of Sudan, Omar Hassan Ahmad Al Bashir, with committing genocide, crimes against humanity and war crimes. The charges claim that Al Bashir is the mastermind of crimes against ethnic groups in Darfur, aimed at removing the black population from Sudan. Sudanese armed forces and government-authorized militias known as the Janjaweed have carried out massive attacks against the Fur, Masalit and Zaghawa communities of Darfur, according to the ICC allegations. Following bombing raids, “ground forces would then enter the village or town and attack civilian inhabitants. They kill men, children, elderly, women; they subject women and girls to massive rapes. They burn and loot the villages.” The ICC says 35,000 people have been killed and 2.7 million displaced.

The ICC reports one victim saying: “When we see them, we run. Some of us succeed in getting away, and some are caught and taken to be raped — gang-raped. Maybe around 20 men rape one woman. ... These things are normal for us here in Darfur. These things happen all the time. I have seen rapes, too. It does not matter who sees them raping the women — they don’t care. They rape girls in front of their mothers and fathers.”

Governments around the world have imposed various sanctions on Sudan, with human rights groups demanding much more aggressive action.

But there is little doubt that Sudan has been able to laugh off existing and threatened sanctions because of the huge support it receives from China, channeled above all through the Sudanese relationship with CNPC.

“The relationship between CNPC and Sudan is symbiotic,” notes the Washington, D.C.-based Human Rights First, in a March 2008 report, “Investing in Tragedy.” “Not only is CNPC the largest investor in the Sudanese oil sector, but Sudan is CNPC’s largest market for overseas investment.”

China receives three quarters of Sudan’s exports, and Chinese companies hold the majority share in almost all of the key oil-rich areas in Sudan. Explains Human Rights First: “Beijing’s companies pump oil from numerous key fields, which then courses through Chinese-made pipelines to Chinese-made storage tanks to await a voyage to buyers, most of them Chinese.” CNPC is the largest oil investor in Sudan; the other key Chinese company is the Sinopec Group (also known as the China Petrochemical Corporation).

Oil money has fueled violence in Darfur. “The profitability of Sudan’s oil sector has developed in close chronological step with the violence in Darfur,” notes Human Rights First. “In 2000, before the crisis, Sudan’s oil revenue was $1.2 billion. By 2006, with the crisis well underway, that total had shot up by 291 percent, to $4.7 billion. How does Sudan use that windfall? Its finance minister has said that at least 70 percent of the oil profits go to the Sudanese armed forces, linked with its militia allies to the crimes in Darfur.”

There are other nefarious components of the CNPC relationship with the Sudanese government. China ships substantial amounts of small arms to Sudan and has helped Sudan build its own small arms factories. China has also worked at the United Nations to undermine more effective multilateral action to protect Darfur. Human rights organizations charge a key Chinese motivation is to lubricate its relationship with the Khartoum government so the oil continues to flow.

CNPC did not respond to repeated requests for comment.

Dole: The Sour Taste of Pineapple

Starting in 1988, the Philippines undertook what was to be a bold initiative to redress the historically high concentration of land ownership that has impoverished millions of rural Filipinos and undermined the country’s development. The Comprehensive Agricultural Reform Program (CARP) promised to deliver land to the landless.

It didn’t work out that way.

Plantation owners helped draft the law and invented ways to circumvent its purported purpose.

Dole pineapple workers are among those paying the price.

Under CARP, Dole’s land was divided among its workers and others who had claims on the land prior to the pineapple giant. However, under the terms of the law, as the Washington, D.C.-based International Labor Rights Forum (ILRF) explains in an October report, “The Sour Taste of Pineapple,” the workers received only nominal title. They were required to form labor cooperatives. Intended to give workers — now the new land owners — a means to collectively manage their land, the cooperatives were instead controlled by wealthy landlords.

“Through its dealings with these cooperatives,” ILRF found, Dole and Del Monte, (the world’s other leading pineapple grower) “have been able to take advantage of a number of worker abuses. Dole has outsourced its labor force to contract labor and replaced its full-time regular employment system that existed before CARP.” Dole employs 12,000 contract workers. Meanwhile, from 1989 to 1998, Dole reduced its regular workforce by 3,500.

Under current arrangements, Dole now leases its land from its workers, on extremely cheap terms — in one example cited by ILRF, Dole pays in rent one-fifteenth of its net profits from a plantation. Most workers continue to work the land they purportedly own, but as contract workers for Dole.

The Philippine Supreme Court has ordered Dole to convert its contract workers into regular employees, but the company has not done so. In 2006, the Court upheld a Department of Labor and Employment decision requiring Dole to stop using illegal contract labor. Under Philippine law, contract workers should be regularized after six months.

Dole emphasizes that it pays its workers $10 a day, more than the country’s $5.60 minimum wage. It also says that its workers are organized into unions. The company responded angrily to a 2007 nomination for most irresponsible corporations from a Swiss organization, the Berne Declaration. “We must also say that those fallacious attacks created incredulity and some anger among our Dolefil workers, their representatives, our growers, their cooperatives and more generally speaking among the entire community where we operate.” The company thanked “hundreds of people who spontaneously expressed their support to Dolefil, by taking the initiative to sign manifestos,” including seven cooperatives.

The problem with Dole’s position, as ILRF points out, is that “Dole’s contract workers are denied the same rights afforded to Dole’s regular workers. They are refused the right to organize or benefits gained by the regular union, and are consequently left with poor wages and permanent job insecurity.” Contract workers are paid under a quota system, and earn about $1.85 a day, according to ILRF.

Conditions are not perfect for unionized workers, either. In 2006, when a union leader complained about pesticide and chemical exposures (apparently misreported in local media as a complaint about Dole’s waste disposal practices), the management of Dole Philippines (Dolefil) pressed criminal libel charges against him. Two years later, these criminal charges remain pending.

Dole says it cannot respond to the allegations in the ILRF report, because the U.S. Trade Representative is considering acting on a petition by ILRF to deny some trade benefits to Dole pineapples imported into the United States from the Philippines.

Concludes Bama Atheya, executive director of ILRF, “In both Costa Rica and the Philippines, Dole has deliberately obstructed workers’ right to organize, has failed to pay a living wage and has polluted workers’ communities.”

GE: Creative Accounting

General Electric (GE) has appeared on Multinational Monitor’s annual 10 Worst Corporations list for defense contractor fraud, labor rights abuses, toxic and radioactive pollution, manufacturing nuclear weaponry, workplace safety violations and media conflicts of interest (GE owns television network NBC).

This year, the company returns to the list for new reasons: alleged tax cheating and the firing of a whistleblower.

In June, former New York Times reporter David Cay Johnston reported on internal GE documents that appeared to show the company had engaged in long-running effort to evade taxes in Brazil. In a lengthy report in Tax Notes International, Johnston cited a GE subsidiary manager’s powerpoint presentation that showed “suspicious” invoices as “an indication of possible tax evasion.” The invoices showed suspiciously high sales volume for lighting equipment in lightly populated Amazon regions of the country. These sales would avoid higher value added taxes (VAT) in urban states, where sales would be expected to be greater.

Johnston wrote that the state-level VAT at issue, based on the internal documents he reviewed, appeared to be less than $100 million. But, “since the VAT scheme appears to have gone on long before the period covered in the Moreira [the company manager] report, the total sum could be much larger and could involve other countries supplied by the Brazil subsidiary.”

A senior GE spokesperson, Gary Sheffer, told Johnston that the VAT and related issues were so small relative to GE’s size that the company was surprised a reporter would spend time looking at them. “No company has perfect compliance,” Sheffer said. “We do not believe we owe the tax.”

Johnston did not identify the source that gave him the internal GE documents, but GE has alleged it was a former company attorney, Adriana Koeck. GE fired Koeck in January 2007 for what it says were “performance reasons.” GE sued Koeck in June 2008, alleging that she wrongfully maintained privileged and confidential information, and improperly shared the information with third parties. In a court filing, GE said that it “considers its professional reputation to be its greatest asset and it has worked tirelessly to develop and preserve an unparalleled reputation of ‘unyielding integrity.’”

GE’s suit followed a whistleblower defense claim filed by Koeck in 2007. In April 2007, Koeck filed a claim with the U.S. Department of Labor under the Sarbanes-Oxley whistleblower protections (rules put in place following the Enron scandal).

In her filing, Koeck alleges that she was fired not for poor performance, but because she called attention to improper activities by GE. After being hired in January 2006, Koeck’s complaint asserts, she “soon discovered that GE C&I [consumer and industrial] operations in Latin America were engaged in a variety of irregular practices. But when she tried to address the problems, both Mr. Burse and Mr. Jones [her superiors in the general counsel’s office] interfered with her efforts, took certain matters away from her, repeatedly became enraged with her when she insisted that failing to address the problems would harm GE, and eventually had her terminated.”

Koeck’s whistleblower filing details the state VAT-avoidance scheme discussed in Johnston’s article. It also indicates that several GE employees in Brazil were blackmailing the company to keep quiet about the scheme.

Koeck’s whistleblower filing also discusses reports in the Brazilian media that GE had participated in a “bribing club” with other major corporations. Members of the club allegedly met to divide up public contracts in Brazil, as well as to agree on the amounts that would be paid in bribes. Koeck discovered evidence of GE subsidiaries engaging in behavior compatible with the “bribing club” stories and reported this information to her superior. Koeck alleges that her efforts to get higher level attorneys to review the situation failed.

In a statement, GE responds to the substance of Koeck’s allegations of wrongdoing: “These were relatively minor and routine commercial and tax issues in Brazil. Our employees proactively identified, investigated and resolved these issues in the appropriate manner. We are confident we have met all of our tax and compliance obligations in Brazil.GE has a strong and rigorous compliance process that dealt effectively with these issues.”

Koeck’s Sarbanes-Oxley complaint was thrown out in June, on the grounds that it had not been filed in a timely matter.

The substance of her claims, however, are now under investigation by the Department of Justice Fraud Section, according to Corporate Crime Reporter.

Imperial Sugar: 13 Dead

On February 7, an explosion rocked the Imperial Sugar refinery in Port Wentworth, Georgia, near Savannah.

Tony Holmes, a forklift operator at the plant, was in the break room when the blast occurred.

“I heard the explosion,” he told the Savannah Morning News. “The building shook, and the lights went out. I thought the roof was falling in. ... I saw people running. I saw some horrific injuries. ... People had clothes burning. Their skin was hanging off. Some were bleeding.”

Days later, when the fire was finally extinguished and search-and-rescue operations completed, the horrible human toll was finally known: 13 dead, dozens badly burned and injured.

As with almost every industrial disaster, it turns out the tragedy was preventable. The cause was accumulated sugar dust, which like other forms of dust, is highly combustible.

The Occupational Safety and Health Administration (OSHA), the government workplace safety regulator, had not visited Imperial Sugar’s Port Wentworth facility since 2000. When inspectors examined the blast site after the fact, they found rampant violations of the agency’s already inadequate standards. They proposed a more than $5 million fine, and issuance of citations for 61 egregious willful violations, eight willful violations and 51 serious violations. Under OSHA’s rules, a “serious” citation is issued when death or serious physical harm is likely to occur, a “willful” violation is a violation committed with plain indifference to employee safety and health, and “egregious” citations are issued for particularly flagrant violations.

A month later, OSHA inspectors investigated Imperial Sugar’s plant in Gramercy, Louisiana. They found 1/4- to 2-inch accumulations of dust on electrical wiring and machinery. They found 6- to 8-inch accumulations on wall ledges and piping. They found 1/2- to 1-inch accumulations on mechanical equipment and motors. They found 3- to 48-inch accumulations on workroom floors. OSHA posted an “imminent danger” notice at the plant, because of the high likelihood of another explosion.

Imperial Sugar obviously knew of the conditions in its plants. It had in fact taken some measures to clean up operations prior to the explosion.

Graham H. Graham was hired as vice president of operations of Imperial Sugar in November 2007. In July 2008, he told a Senate subcommittee that he first walked through the Port Wentworth facility in December 2007. “The conditions were shocking,” he testified. “Port Wentworth was a dirty and dangerous facility. The refinery was littered with discarded materials, piles of sugar dust, puddles of sugar liquid and airborne sugar dust. Electrical motors and controls were encrusted with solidified sugar, while safety covers and doors were missing from live electrical switchgear and panels. A combustible environment existed.”

Graham recommended that the plant manager be fired, and he was. Graham ordered a housekeeping blitz, and by the end of January, he testified to the Senate subcommittee, conditions had improved significantly, but still were hazardous.

But Graham also testified that he was told to tone down his demands for immediate action. In a meeting with John Sheptor, then Imperial Sugar’s chief operating officer and now its CEO, and Kay Hastings, senior vice president of human resources, Graham testified, “I was also informed that I was excessively eager in addressing the refinery’s problems.”

Sheptor, who was nearly killed in the refinery explosion, and Hastings both deny Graham’s account.

The company says that it respected safety concerns before the explosion, but has since redoubled efforts, hiring expert consultants on combustible hazards, refocusing on housekeeping efforts and purchasing industrial vacuums to minimize airborne disbursement.

In March, the House of Representatives Education and Labor Committee held a hearing on the hazards posed by combustible dust. The head of the Chemical Safety Board testified about a 2006 study that identified hundreds of combustible dust incidents that had killed more than 100 workers during the previous 25 years. The report recommended that OSHA issue rules to control the risk of dust explosions.

Instead of acting on this recommendation, said Committee Chair George Miller, D-California, “OSHA chose to rely on compliance assistance and voluntary programs, such as industry ‘alliances,’ web pages, fact sheets, speeches and booths at industry conferences.”

The House of Representatives then passed legislation to require OSHA to issue combustible dust standards, but the proposal was not able to pass the Senate.

Remarkably, even after the tragedy at Port Wentworth, and while Imperial Sugar said it welcomed the effort for a new dust rule, OSHA head Edwin Foulke indicated he believed no new rule was necessary.

“We believe,” he told the House Education and Labor Committee in March, “that [OSHA] has taken strong measures to prevent combustible dust hazards, and that our multi-pronged approach, which includes effective enforcement of existing standards, combined with education for employers and employees, is effective in addressing combustible dust hazards. We would like to emphasize that the existence of a standard does not ensure that explosions will be eliminated.”

Philip Morris International: Unshackled

The old Philip Morris no longer exists. In March, the company formally divided itself into two separate entities: Philip Morris USA, which remains a part of the parent company Altria, and Philip Morris International.

Philip Morris USA sells Marlboro and other cigarettes in the United States. Philip Morris International tramples over the rest of the world.

The world is just starting to come to grips with a Philip Morris International even more predatory in pushing its toxic products worldwide.

The new Philip Morris International is unconstrained by public opinion in the United States — the home country and largest market of the old, unified Philip Morris —and will no longer fear lawsuits in the United States.

As a result, Thomas Russo of the investment fund Gardner Russo & Gardner told Bloomberg, the company “won’t have to worry about getting pre-approval from the U.S. for things that are perfectly acceptable in foreign markets.” Russo’s firm owns 5.7 million shares of Altria and now Philip Morris International.

A commentator for The Motley Fool investment advice service wrote, “The Marlboro Man is finally free to roam the globe unfettered by the legal and marketing shackles of the U.S. domestic market.”

In February, the World Health Organization (WHO) issued a new report on the global tobacco epidemic. WHO estimates the Big Tobacco-fueled epidemic now kills more than 5 million people every year.

Five million people.

By 2030, WHO estimates 8 million will die a year from tobacco-related disease, 80 percent in the developing world.

The WHO report emphasizes that known and proven public health policies can dramatically reduce smoking rates. These policies include indoor smoke-free policies; bans on tobacco advertising, promotion and sponsorship; heightened taxes; effective warnings; and cessation programs. These “strategies are within the reach of every country, rich or poor and, when combined as a package, offer us the best chance of reversing this growing epidemic,” says WHO Director-General Margaret Chan.

Most countries have failed to adopt these policies, thanks in no small part to decades-long efforts by Philip Morris and the rest of Big Tobacco to deploy political power to block public health initiatives. Thanks to the momentum surrounding a global tobacco treaty, known as the Framework Convention on Tobacco Control, adopted in 2005, this is starting to change. There’s a long way to go, but countries are increasingly adopting sound public health measures to combat Big Tobacco.

Now Philip Morris International has signaled its initial plans to subvert these policies.

The company has announced plans to inflict on the world an array of new products, packages and marketing efforts. These are designed to undermine smoke-free workplace rules, defeat tobacco taxes, segment markets with specially flavored products, offer flavored cigarettes sure to appeal to youth and overcome marketing restrictions.

The Chief Operating Officer of Philip Morris International, Andre Calantzopoulos, detailed in a March investor presentation two new products, Marlboro Wides, “a shorter cigarette with a wider diameter,” and Marlboro Intense, “a rich, flavorful, shorter cigarette.”

Sounds innocent enough, as far as these things go.

That’s only to the innocent mind.

The Wall Street Journal reported on Philip Morris International’s underlying objective: “The idea behind Intense is to appeal to customers who, due to indoor smoking bans, want to dash outside for a quick nicotine hit but don’t always finish a full-size cigarette.”

Workplace and indoor smoke-free rules protect people from second-hand smoke, but also make it harder for smokers to smoke. The inconvenience (and stigma of needing to leave the office or restaurant to smoke) helps smokers smoke less and, often, quit. Subverting smoke-free bans will damage an important tool to reduce smoking.

Philip Morris International says it can adapt to high taxes. If applied per pack (or per cigarette), rather than as a percentage of price, high taxes more severely impact low-priced brands (and can help shift smokers to premium brands like Marlboro). But taxes based on price hurt Philip Morris International.

Philip Morris International’s response? “Other Tobacco Products,” which Calantzopoulos describes as “tax-driven substitutes for low-price cigarettes.” These include, says Calantzopoulos, “the ‘tobacco block,’ which I would describe as the perfect make-your-own cigarette device.” In Germany, roll-your-own cigarettes are taxed far less than manufactured cigarettes, and Philip Morris International’s “tobacco block” is rapidly gaining market share.

One of the great industry deceptions over the last several decades is selling cigarettes called “lights” (as in Marlboro Lights), “low” or “mild” — all designed to deceive smokers into thinking they are safer.

The Framework Convention on Tobacco Control says these inherently misleading terms should be barred. Like other companies in this regard, Philip Morris has been moving to replace the names with color coding — aiming to convey the same ideas, without the now-controversial terms.

Calantzopoulos says Philip Morris International will work to more clearly differentiate Marlboro Gold (lights) from Marlboro Red (traditional) to “increase their appeal to consumer groups and segments that Marlboro has not traditionally addressed.”

Philip Morris International also is rolling out a range of new Marlboro products with obvious attraction for youth. These include Marlboro Ice Mint, Marlboro Crisp Mint and Marlboro Fresh Mint, introduced into Japan and Hong Kong last year. It is exporting clove products from Indonesia.

The company has also renewed efforts to sponsor youth-oriented music concerts. In July, activist pressure forced Philip Morris International to withdraw sponsorship of an Alicia Keys concert in Indonesia (Keys called for an end to the sponsorship deal); and in August, the company was forced to withdraw from sponsorship in the Philippines of a reunion concert of the Eraserheads, a band sometimes considered “the Beatles of the Philippines.”

Responding to increasing advertising restrictions and large, pictorial warnings required on packs, Marlboro is focusing increased attention on packaging. Fancy slide packs make the package more of a marketing device than ever before, and may be able to obscure warning labels.

Most worrisome of all may be the company’s forays into China, the biggest cigarette market in the world, which has largely been closed to foreign multinationals. Philip Morris International has hooked up with the China National Tobacco Company, which controls sales in China. Philip Morris International will sell Chinese brands in Europe. Much more importantly, the company is starting to sell licensed versions of Marlboro in China. The Chinese aren’t letting Philip Morris International in quickly — Calantzopoulos says, “We do not foresee a material impact on our volume and profitability in the near future.” But, he adds, “we believe this long-term strategic cooperation will prove to be mutually beneficial and form the foundation for strong long-term growth.”

What does long-term growth mean? In part, it means gaining market share among China’s 350 million smokers. But it also means expanding the market, by selling to girls and women. About 60 percent of men in China smoke; only 2 or 3 percent of women do so.

Roche: Saving Lives is Not Our Business

Monopoly control over life-saving medicines gives enormous power to drug companies. And, to paraphrase Lord Acton, enormous power corrupts enormously.

The Swiss company Roche makes a range of HIV-related drugs. One of them is enfuvirtid, sold under the brand-name Fuzeon. Fuzeon is the first of a new class of AIDS drugs, working through a novel mechanism. It is primarily used as a “salvage” therapy — a treatment for people for whom other therapies no longer work. Fuzeon brought in $266 million to Roche in 2007, though sales are declining.

Roche charges $25,000 a year for Fuzeon. It does not offer a discount price for developing countries.

Like most industrialized countries, Korea maintains a form of price controls — the national health insurance program sets prices for medicines. The Ministry of Health, Welfare and Family Affairs listed Fuzeon at $18,000 a year. Korea’s per capita income is roughly half that of the United States. Instead of providing Fuzeon, for a profit, at Korea’s listed level, Roche refuses to make the drug available in Korea.

Korea is not a developing country, emphasizes Roche spokesperson Martina Rupp. “South Korea is a developed country like the U.S. or like Switzerland.”

Roche insists that Fuzeon is uniquely expensive to manufacture, and so that it cannot reduce prices. According to a statement from Roche, “the offered price represents the lowest sustainable price at which Roche can provide Fuzeon to South Korea, considering that the production process for this medication requires more than 100 steps — 10 times more than other antiretrovirals. A single vial takes six months to produce, and 45 kilograms of raw materials are necessary to produce one kilogram of Fuzeon.”

The head of Roche Korea was reportedly less diplomatic. According to Korean activists, he told them, “We are not in business to save lives, but to make money. Saving lives is not our business.”

Says Roche spokesperson Rupp: “I don’t know why he would say that, and I cannot imagine that this is really something that this person said.”

Another AIDS-related drug made by Roche is valganciclovir. Valganciclovir treats a common AIDS-related infection called cytomegalovirus (CMV) that causes blindness or death. Roche charges $10,000 for a four-month course of valganciclovir. In December 2006, it negotiated with Médicins Sans Frontières/Doctors Without Borders (MSF) and agreed on a price of $1,899. According to MSF, this still-price-gouging price is only available for poor and very high incidence countries, however, and only for nonprofit organizations — not national treatment programs.

Roche’s Rupp says that “Currently, MSF is the only organization requesting purchase of Valcyte [Roche’s brand name for valganciclovir] for such use in these countries. To date, MSF are the only AIDS treatment provider treating CMV for their patients. They told us themselves this is because no-one else has the high level of skilled medical staff they have.”

Dr. David Wilson, former MSF medical coordinator in Thailand, says he remembers the first person that MSF treated with life-saving antiretrovirals. “I remember everyone was feeling really great that we were going to start treating people with antiretrovirals, with the hope of bringing people back to normal life.” The first person MSF treated, Wilson says, lived but became blind from CMV. “She became strong and she lived for a long time, but the antiretroviral treatment doesn’t treat the CMV.”

“I’ve been working in MSF projects and treating people with AIDS with antiretrovirals for seven years now,” he says, “and along with many colleagues we’ve been frustrated because we don’t have treatment for this particular disease. We now think we have a strategy to diagnose it effectively and what we really need is the medicine to treat the patients.”

Anonymous said...

Fed Pledges Top $7.4 Trillion to Ease Frozen Credit (Update1)

By Mark Pittman and Bob Ivry
Enlarge Image/Details

Nov. 24 (Bloomberg) -- The U.S. government is prepared to lend more than $7.4 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year, to rescue the financial system since the credit markets seized up 15 months ago.

The unprecedented pledge of funds includes $2.8 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the only plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.

When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in.

“Whether it’s lending or spending, it’s tax dollars that are going out the window and we end up holding collateral we don’t know anything about,” said Congressman Scott Garrett, a New Jersey Republican who serves on the House Financial Services Committee. “The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”

Too Big to Fail

Bloomberg News tabulated data from the Fed, Treasury and Federal Deposit Insurance Corp. and interviewed regulatory officials, economists and academic researchers to gauge the full extent of the government’s rescue effort.

The bailout includes a Fed program to buy as much as $2.4 trillion in short-term notes, called commercial paper, that companies use to pay bills, begun Oct. 27, and $1.4 trillion from the FDIC to guarantee bank-to-bank loans, started Oct. 14.

William Poole, former president of the Federal Reserve Bank of St. Louis, said the two programs are unlikely to lose money. The bigger risk comes from rescuing companies perceived as “too big to fail,” he said.

The government committed $29 billion to help engineer the takeover in March of Bear Stearns Cos. by New York-based JPMorgan Chase & Co. and $122.8 billion in addition to TARP allocations to bail out New York-based American International Group Inc., once the world’s largest insurer. Yesterday, Citigroup Inc. received $306 billion of government guarantees for troubled mortgages and toxic assets. The Treasury Department also will inject $20 billion into the bank after its stock fell 60 percent last week.

“No question there is some credit risk there,” Poole said.

Exposure

Congressman Darrell Issa, a California Republican on the Financial Services Committee, said risk is lurking in the programs that Poole thinks are safe.

“The thing that people don’t understand is it’s not how likely that the exposure becomes a reality, but what if it does?” Issa said. “There’s no transparency to it so who’s to say they’re right?”

The worst financial crisis in two generations has erased $23 trillion, or 38 percent, of the value of the world’s companies and brought down three of the biggest Wall Street firms.

The Dow Jones Industrial Average through Friday is down 38 percent since the beginning of the year and 43 percent from its peak on Oct. 9, 2007. The S&P 500 fell 45 percent from the beginning of the year through Friday and 49 percent from its peak on Oct. 9, 2007. The Nikkei 225 Index has fallen 46 percent from the beginning of the year through Friday and 57 percent from its most recent peak of 18,261.98 on July 9, 2007. Goldman Sachs Group Inc. is down 78 percent, to $53.31, on Friday from its peak of $247.92 on Oct. 31, 2007, and 75 percent this year.

‘Snookered’

Regulators hope the rescue will contain the damage and keep banks providing the credit that is the lifeblood of the U.S. economy.

Most of the spending programs are run out of the New York Fed, whose president, Timothy Geithner, is said to be President- elect Barack Obama’s choice to be Treasury Secretary.

The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.

“It’s unprecedented,” said Bob Eisenbeis, chief monetary economist at Vineland, New Jersey-based Cumberland Advisors Inc. and an economist for the Atlanta Fed for 10 years until January. “The backlash has begun already. Congress is taking a lot of hits from their constituents because they got snookered on the TARP big time. There’s a lot of supposedly smart people who look to be totally incompetent and it’s all going to fall on the taxpayer.”

New Deal

President Franklin D. Roosevelt’s New Deal of the 1930s, when almost 10,000 banks failed and there was no mechanism to bolster them with cash, is the only rival to the government’s current response. The savings and loan bailout of the 1990s cost $209.5 billion in inflation-adjusted numbers, of which $173 billion came from taxpayers, according to a July 1996 report by the U.S. General Accounting Office.

The 1979 U.S. government bailout of Chrysler consisted of bond guarantees, adjusted for inflation, of $4.2 billion, according to a Heritage Foundation report.

The commitment of public money is appropriate to the peril, said Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. and a former economist at the New York Fed. U.S. financial firms have taken writedowns and losses of $666.1 billion since the beginning of 2007, according to Bloomberg data.

“This is the worst capital markets crisis in modern history,” Harris said. “So you have the biggest intervention in modern history.”

Federal Lawsuit

Bloomberg has requested details of Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit against the central bank Nov. 7 seeking to force disclosure of borrower banks and their collateral.

Collateral is an asset pledged to a lender in the event a loan payment isn’t made.

“Some have asked us to reveal the names of the banks that are borrowing, how much they are borrowing, what collateral they are posting,” Bernanke said Nov. 18 to the House Financial Services Committee. “We think that’s counterproductive.”

The Fed should account for the collateral it takes in exchange for loans to banks, said Paul Kasriel, chief economist at Chicago-based Northern Trust Co. and a former research economist at the Federal Reserve Bank of Chicago.

“There is a lack of transparency here and, given that the Fed is taking on a huge amount of credit risk now, it would seem to me as a taxpayer there should be more transparency,” Kasriel said.

$4.4 Trillion

Bernanke’s Fed is responsible for $4.4 trillion of pledges, or 60 percent of the total commitment of $7.4 trillion, based on data compiled by Bloomberg concerning U.S. bailout steps started a year ago.

“Too often the public is focused on the wrong piece of that number, the $700 billion that Congress approved,” said J.D. Foster, a former staff member of the Council of Economic Advisers who is now a senior fellow at the Heritage Foundation in Washington. “The other areas are quite a bit larger.”

The Fed’s rescue attempts began last December with the creation of the Term Auction Facility to allow lending to dealers for collateral. After Bear Stearns’s collapse in March, the central bank started making direct loans to securities firms at the same discount rate it charges commercial banks, which take customer deposits.

In the three years before the crisis, such average weekly borrowing by banks was $48 million, according to the central bank. Last week it was $91.5 billion.

Lehman Failure

The failure of a second securities firm, Lehman Brothers Holdings Inc., in September, led to the creation of the Commercial Paper Funding Facility and the Money Market Investor Funding Facility, or MMIFF. The two programs, which have pledged $2.3 trillion, are designed to restore calm in the money markets, which deal in certificates of deposit, commercial paper and Treasury bills.

“Money markets seized up after Lehman failed,” said Neal Soss, chief economist at Credit Suisse Group in New York and a former aide to Fed chief Paul Volcker. “Lehman failing made a lot of subsequent actions necessary.”

The FDIC, chaired by Sheila Bair, is contributing 20 percent of total rescue commitments. The FDIC’s $1.4 trillion in guarantees will amount to a bank subsidy of as much as $54 billion over three years, or $18 billion a year, because borrowers will pay a lower interest rate than they would on the open market, according to Raghu Sundurum and Viral Acharya of New York University and the London Business School.

Bank Subsidy

Congress and the Treasury have ponied up $892 billion in TARP and other funding, or 12 percent.

The Federal Housing Administration, overseen by Department of Housing and Urban Development Secretary Steven Preston, was given the authority to guarantee $300 billion of mortgages, or about 4 percent of the total commitment, with its Hope for Homeowners program, designed to keep distressed borrowers from foreclosure.

Most of the federal guarantees reduce interest rates on loans to banks and securities firms, which would create a subsidy of at least $6.6 billion annually for the financial industry, according to data compiled by Bloomberg comparing rates charged by the Fed against market interest currently paid by banks.

Not included in the calculation of pledged funds is an FDIC proposal to prevent foreclosures by guaranteeing modifications on $444 billion in mortgages at an expected cost of $24.4 billion to be paid from the TARP, according to FDIC spokesman David Barr. The Treasury Department hasn’t approved the program.

Automakers

Bernanke and Paulson, former chief executive officer of Goldman Sachs, have also promised as much as $200 billion to shore up nationalized mortgage finance companies Fannie Mae and Freddie Mac. The FDIC arranged for $139 billion in loan guarantees for General Electric Co.’s finance unit.

The tally doesn’t include money to General Motors Corp., Ford Motor Co. and Chrysler LLC. Obama has said he favors financial assistance to keep them from collapse.

Paulson told the House Financial Services Committee Nov. 18 that the $250 billion already allocated to banks through the TARP is an investment, not an expenditure.

“I think it would be extraordinarily unusual if the government did not get that money back and more,” Paulson said.

‘We Haircut It’

In his Nov. 18 testimony, Bernanke told the House Financial Services Committee that the central bank wouldn’t lose money.

“We take collateral, we haircut it, it is a short-term loan, it is very safe, we have never lost a penny in these various lending programs,” he said.

A haircut refers to the practice of lending less money than the collateral’s current market value.

Requiring the Fed to disclose loan recipients might set off panic, said David Tobin, principal of New York-based loan-sale consultants and investment bank Mission Capital Advisors LLC.

“If you mark to market today, the banking system is bankrupt,” Tobin said. “So what do you do? You try to keep it going as best you can.”

“Mark to market” means adjusting the value of an asset, such as a mortgage-backed security, to reflect current prices.

Some of the bailout assistance could come from tax breaks in the future. The Treasury Department changed the tax code on Sept. 30 to allow banks to expand the deductions on the losses banks they were buying, according to Robert Willens, a former Lehman Brothers tax and accounting analyst who teaches at Columbia University Business School in New York.

‘Wells Fargo Notice’

Wells Fargo & Co., which is buying Charlotte, North Carolina-based Wachovia Corp., will be able to deduct $22 billion, Willens said. Adding in other banks, the code change will cost $29 billion, he said.

“The rule is now popularly known among tax lawyers as the ‘Wells Fargo Notice,’” Willens said.

The regulation was changed to make it easier for healthy banks to buy troubled ones, said Treasury Department spokesman Andrew DeSouza.

House Financial Services Committee Chairman Barney Frank said he was angry that banks used the money for acquisitions.

“The only purpose for this money is to lend,” said Frank, a Massachusetts Democrat. “It’s not for dividends, it’s not for purchases of new banks, it’s not for bonuses. There better be a showing of increased lending roughly in the amount of the capital infusions” or Congress may not approve the second half of the TARP money.

tim said...

Yeah, all this gov't money pledged. The more they spend the less the dollar is worth.

Stop bailing things out. Let us at least have the chance of the dollar holding on to some of its spending power.

Want to help, Obama? Stop all the bailouts.

Anonymous said...

APU, are you out of your mind?

Geithner is the fox who has been running the chicken slaughter house, now they're going to have Bernanke running the FED, and his 'SON' Geithner running the Treasury. What is this about?? I'll tell you all, the US-TREASURY has its own private army, the FED has no legal army.

Now that the FED & US-TREASURY are ONE, anything is possible, the us-treasury has incredible police powers, they can if they wish declare-martial, so now so can the FED.

It's going to get interesting, APU do you honestly think for a fucking second that the OREO is not the OREO??

tim said...

I'm just Apu, selling you pop and chips. I have no idea what Obama will do. No clue. I sure don't think he'll stick to campaign promises. What he will do is a mystery to me.

I'm interested in all opinions. We'll see what he's made of soon enough, though.

hbm said...

"go to burns or johnday don't be jubilent that bend is dead"

I came here in the mid-1980s and I sure as hell would not want the Bend economy to return to those days. But we have several people in this forum who do want it because (a) it would give them a feeling of schadenfreude and (b) they think all the "rich Californians" (i.e. anybody from out of state who makes more than minimum wage) will leave and they won't feel inferior anymore.

hbm said...

tim: I think Obama will do pretty much what FDR did -- try things to see what works. Obama is a pragmatist, not blinded by ideology. That's a huge point in his favor IMO.

tim said...

hbm, if that's what he does he's OK by me.

Anonymous said...

http://www.ktvz.com/Global/story.asp?S=9402059

"The cause of the blaze is under investigation."

Anonymous said...

Obama is a pragmatist, not blinded by ideology. - smithers

*

How can you say that when his TEAM is MORE BUSH THAN BUSH??

Anonymous said...

The OREO is not anointed one person who can be construed to be an 'FDR'.

It's still going to be bush-clinton-bush-clinton, ... open your fucking eyes.

Anonymous said...

I have no idea what Obama will do. No clue. I sure don't think he'll stick to campaign promises. What he will do is a mystery to me.

*

He's appointing the BUSH brains, are all you fuckers so deluded to not see that OREO will be MORE bush than bush??

Behind the scenes all along on all these bailouts, they were ran by Geithner, at the very least by VOTING for the OREO you folks should be demanding change??

This is like making ROVE president for life, Geithner is a young guy he'll probably become the next Greenspan, ...

These guys have an explicit agenda of one world currency, I'm mean not that it matters, cuz its all toilet tissue, smart folks will put their money anywhere where its out of the reach of these people, and they known it, and thus they MUST control the worlds currency, so people don't vote with their feet.

Anonymous said...

IHTBYB said:
"BEND is a place that is ALL MARGIN. Look around. There are $800K homes for $175K humans. We're fucked."

Right, minor changes in supply or demand can cause significant price moves. House prices are determined by CURRENT STATUS OF AVAILABILITY, not inherent value.

A small uptick in demand in the early 2000s caused MASSIVE price increases because supply was fixed (in the short run).

A few who were aware of history might have known that the price increases were going to be temporary.

But for most people, this pricing at the margin sent a false signal. Builders saw the uptick and decided to BUILD, BUILD, BUILD.

Anonymous said...

Yep,

BIG VERY BIG INSURANCE ARSON TODAY UP AT PRONGHORN.

ALL THE INSIDE REALTY PEOPLE TALKING ABOUT 'NEW WAY' TO OFF-LOAD BEND RE.

Anonymous said...

But for most people, this pricing at the margin sent a false signal. Builders saw the uptick and decided to BUILD, BUILD, BUILD.

*

BULL FUCKING SHIT.

The city of BEND, courtesy of BROOKS RESOURCE's saw to it that BEND had the cheapest SDC's in the State, Developers came to Bend, because it was "OPEN FOR BUSINESS".

Trouble is virtually every developer that came here post 2002 to now BK, the original owners of the 'cheap land' pre 1998, Smith, Hollern, ... are doing just fine?

No accident that BEND is/was MOST over-valued in nation 2004-2007.


CHEAP SDC(HOLLERN), CHEAP MONEY(BUSH), CITY-of-BEND financed PR&MARKETING; the three legged stool that made the BEND BUBBLE.


BUILDER's nada to do with the bubble, they were just fucking stooges got up in the fucking ball-game, all engineered. You can certainly say that the SDC&PR-MARKETING(COBA/COVA) were all inspired by BROOKS, but the EASY money was 100% BUSH-PUG post 911 bubble.

Anonymous said...

Did you see the monolith going in today at the rounabout on 15th and bearcreek? How much did that cost? Hope they have enough money for snow removal, But a monolith is more important than roads and jobs?

Anonymous said...

My prediction is two fold with the OREO.

1.) The FED boyz demand one world currency that that all non-terrorists must use.

2.) That OREO initiate the DRAFT so that all the terrorists can be erradicated.

3.) That GOLD be confiscated like 1934 so people have no where to hide their wealth other than the NEW FED-NOTE's.

4.) That the FED & US-TREASURY become synonymous.

Anonymous said...

Those that follow the INSIDE of the FED know Geithner very well.

He's the guy who created the crisis, the guy who will fix the crisis, and the guy who run's the bailout, he's also the guy who refuses to say who got the $2 Trillion dollars.

Nice guy for OR-BOMB-EO to put in charge of the US-TREASURY. NOT Geithner has his own private standing-army.

This is a FUCKING COUP-D'eTat folks.

Anonymous said...

Nice guy for OR-BOMB-EO to put in charge of the US-TREASURY.

NOW Geithner has his own private standing-army.

This is a FUCKING COUP-D'eTat folks.

*

The US-TREASURY has some of the strongest police powers in the nation, remember their job is protect the dollar, and prevent 'crime', e.g. counterfeiting....

The US-Treasury will become the 'brown-shirts' for OREO's domestic army. Native US soldiers may not welcome this coup-d'etat, thus it is essential to have a privatized military protect the FED-RESERVE.

Anonymous said...

My prediction is two fold with the OREO.

1.) The FED boyz demand one world currency that that all non-terrorists must use.

2.) That OREO initiate the DRAFT so that all the terrorists can be erradicated.

3.) That GOLD be confiscated like 1934 so people have no where to hide their wealth other than the NEW FED-NOTE's.

4.) That the FED & US-TREASURY become synonymous.


*

TWO-FER: DRAFT & NEW CURRENCY with 100 to one trade in value. Remember we got HUGE hyper-inflation coming, given that 10X the GDP will be printed in these turbulent years.

Anonymous said...

Geithners dream has always been a one=world currency, that way there is no where to go, no where to hide, one outfit ( THE FED ) controls the world.

Trouble of course is the WORLD will split.

You'll have ASIA,INDIA,RUSSIA, and much of South-America, Africa, ... the US will be UK, maybe CAN&MEX?

The interesting GAMBLE is will take a WWIII to FORCE the losers to accept the one-world currency, dropping everyone to their knees was supposed to be the game-plan ( non violent war ),

Soon CHINA will no longer loan to the USA, and thus the US must print TRILLIONS of dollars, and who will take those dollars? GOLD will be the only thing the US can trade, and thus must collect(confiscate) the gold.

Anonymous said...


Barack Obama- War Criminal in Waiting


One astute observation made by a friend surrounding the US elections is that not voting for/being excited about Obama would be like not celebrating/being excited about Christmas. The analogy was actually more profound than intended, since not only are both events extravaganzas that bring people together, happen rarely, and make people feel good, they are also events whose founding principles have zero fundamental substance.

"There are seeds of anarchy in the idea of individual freedom, an intoxicating danger in the idea of equality. For if everybody is truly free, without the constraints of birth or rank and an inherited social order, how can we ever hope to form a society that coheres?”

Barack Obama, "The Audacity of Hope".

“The only time a black man has a voice in America is when he speaks through a white man’s trumpet”

An 1830’s American civil rights activist

***

One astute observation made by a friend surrounding the US elections is that not voting for/being excited about Obama would be like not celebrating/being excited about Christmas. The analogy was actually more profound than intended, since not only are both events extravaganzas that bring people together, happen rarely, and make people feel good, they are also events whose founding principles have zero fundamental substance, and whose joys wear out very quickly.

Though undoubtedly the result of the US elections is a happy event for most sane people, the happiness should not stem from an Obama victory so much as from a McCain defeat. The fact that this jingoistic warmonger is not in control of the most dangerous threat to human existence in all history- namely US military capabilities- is a relief that can be felt the world over, other than the American Deep South. The problem is, that such is the hysteria over Obama, as a man of tremendous charisma, oratory, a relatively progressive history, as well as for the not insignificant fact that he is the first black president, has come not only to obscure, but also to distort his positions on fundamental issues, with the result that he is taken to be what he is not. The hopes that he will enact liberal reform and take the US along the path of a functioning democracy are utterly misplaced, and the truth is right in front of our very eyes. The reality is that he will stay firmly within the spectrum of previous presidents, pandering to special interests, sustaining oppression of people in impoverished, but strategically important countries around the world, and subscribing comfortably and without a doubt to Noam Chomsky’s observation that if the Nuremberg Laws that were applied in 1946 to try the Nazis were applied to post war American presidents, every single such president would go to the gallows in the same way as Goering, Bormann et al.

Let’s start with the most common, and most serious misapprehension about the Obama campaign. Read carefully and repeat- HE IS NOT GOING TO END THE OCCUPATION OF IRAQ. He has never said he would, so why believe it? What has he said- he said he would engage in a phased withdrawal of US combat troops. His ex foreign policy advisor, Samantha Powers, later said that in fact this was a "best case scenario" that "he will revisit when he becomes president. http://news.bbc.co.uk/2/hi/programmes/hardtalk/7281805.stm. The desires of the Iraqi people don’t come into it, clearly- it’s only their country after all. Regardless, the major military entity in Iraq is not the US combat troops, but the private military contractors, who at 180 000, outnumber the US military by about 30 000. These consist of private mercenary armies such as Blackwater and Dyncorp, independent groups of professional “soldiers”, who are essentially accountable to no one, and over whom the US has zero effective control. This was evidenced in the Nisour Square massacre in 2007, where 14 unarmed Iraqi civilians were murdered by Blackwater staff, non of whom have been charged with any offence. Under an Obama presidency, these people will be left in Iraq, useful loose cannons, since they can do the dirty work of the US in an efficient manner without the US having to get their hands dirty, and totally unaccountable for their conduct and actions against the people whose land they have invaded and are occupying under a mandate provided by President Obama, which is totally in contravention of every major piece of international law- the Geneva Convention, the UN Charter, the Nuremberg Principles, as well as the Kellogg Briand pact. For some reason, we happier to tolerate illegal activity on the part of states (especially our own) than we are of individuals- there is little or no basis for this judgement.

Obama would also maintain the US Green Zone; a 20 000 person “embassy city” in the middle of Baghdad, that serves as a sort of quasi-garrison for the occupiers. In addition, he has said repeatedly that he will maintain a residual security force in Iraq to fight any potential Al Qaeda uprising- missing the somewhat important notion that were the US not in Iraq, Al Qaeda would not be there in the first place.

So the occupation of Iraq is not going to end under an Obama presidency. In fact, it is instructive to look at his war stance in more detail- although he openly opposed the war in 2003, he said one year later, when the war had gained a little more traction in the public eye- “Mission Accomplished” etc- that had he known what Bush knew then, he may have voted the other way, saying he was "not privy to Senate intelligence reports… What would I have done? I don't know. What I know is that from my vantage point the case was not made." In 2004, regarding the occupation, he stated: “there's not much of a difference between my position and George Bush's position at this stage." It was around this point that he removed his anti Iraq war speech from his website, seeing that it lacked political expedience. So his position as an opponent of the Iraq invasion is not clear cut ; his position as an opponent of the Iraq occupation is not one that can be taken seriously.

Indeed the War on Terror may well escalate, given his sabre rattling against Pakistan (threatening to bomb it if it didn’t cooperate with US demands); Iran (stating that the nuclear attack option was still on the table in dealing with them), and Afghanistan. Iran is an interesting example, because here is a country that has seen the US overthrow its last democratic leader, Mohammed Mossadegh in 1953, install a brutal regime under the Shah for 26 years, and then support, finance and arm Saddam Hussein during his invasion of the country in the early 80’s, which killed hundreds of thousands of people. Iran has never invaded or attacked a country in its recent history, nor has it seriously threatened pre-emptive aggression against any other country (the media concocted allegations of “wipe Israel of the map” is not something anyone rational takes seriously anymore). Yet it has to face constant threats against its own existence by the US, a country that is maybe responsible for the deaths of more foreign civilians than all other countries in the world put together since 1945; a country that has launched attacks, coup d’états or interventions in 50 different countries since that date. It is a truly rotten history, and one to which Obama has repeatedly added entries in his personal chapter even before assuming office.

Afghanistan is the theatre into which Obama plans on transferring the excess combat troops from Iraq. Forget the fact that the majority of the Afghan people want negotiations to begin with the Taliban, and that the leading UK commander in the region has conceded that a NATO victory is impossible; Obama sees the need to compensate the bloodthirsty hoards for his draw down in one country by an escalation in another. Can anyone remember what the justification of the Afghan invasion was? Bush gave the Taliban 48 hours to hand over Bin Laden on October 5th, 2001. The Taliban, who (according to the Independent and Reuters) had warned the US on August the 26th that Al Qaeda were plotting a big attack on the US, simply asked for proof that Bin Laden was involved, and they would be happy to hand him over, or at least to try him. No evidence was forthcoming, Bush and others claiming that they just knew it was him, and the invasion started 2 days later. Fast forward to 2008, and lets have a look at the FBI’s much vaunted 10 Most Wanted Terrorist list. http://www.fbi.gov/wanted/terrorists/terbinladen.htm
Of course, OBL is there, but what is he wanted for?

“Usama Bin Laden is wanted in connection with the August 7, 1998, bombings of the United States Embassies in Dar es Salaam, Tanzania, and Nairobi, Kenya. These attacks killed over 200 people. In addition, Bin Laden is a suspect in other terrorist attacks throughout the world.”

Errr… so not wanted for 911 then? Let’s ask the FBI what they have to say about this little pickle. According to Rex Tomb, Chief of Investigative Publicity for the FBI :

“The reason why 9/11 is not mentioned on Usama Bin Laden’s Most Wanted page is because the FBI has no hard evidence connecting Bin Laden to 9/11.”

Ah. Well never mind, just continue the looting of the country in any case Barack, no one minds, except all the people who have to die, and they’re all dead now in any case, so no matter, right?

What is the point to these wars? They have no more or no less point than any of the imperialist wars that preceded or will succeed them, from Panama to Vietnam, Grenada to Kosovo, but they do serve an important purpose in illustrating how snugly and perfectly Obama fits into the spectrum of imperialist criminality that is prerequisite for the ruler of any empire, and has been systematic in every president this side of WW2. There is no change.

None of this should be news. Obama has constantly voiced his support for continuing the “War on Terror”. The notion of a war on terror is just not one that can be taken seriously. Attacking defenceless countries where you will inevitably kill truckloads of civilians, no matter how much you want to target the “bad guys”, is of course terrorism- it is violence that is systematically non discriminatory between combatants and civilians, engaged in to reach a political/ideological goal. And you cannot fight terrorism by committing terrorism. These are pretty simple truisms. The US cannot be fighting, and would never fight, a war on terror. The reasons are simple. Last year, 4 000 people in the US died from peanut allergies. That’s more people than have ever died in the US from terrorism in any one year. So why spend $3 trillion fighting “terror”, when peanuts are an infinitely greater killer? Why not invade the world’s peanut farms?! The fact is that the impact of terror on western countries is so insignificant, that you just cannot take it seriously. And though peanuts is a facetious example, if you want to extend it to something like gun or knife crime, where the yearly deaths are even greater, you can just ask yourself the simple question- why spend billions every month on fighting “terror”, when the goal of fighting terror is to protect civilian life, and there are infinitely greater, and cheaper to deal with, threats to civilian life than terror. However the strategic advantages to reducing knife crime are far less than invading oil rich countries under the guise of protecting the people from “the terrorists”. This is a notion that Obama is well aware of, and hence he subscribes to it whole-heartedly.

To conclude the point on terror, were this a true war on terror, Luis Posada Carriles, Orlanda Bosch and Gonzalo Sanchez de Lozada would be first in line for the waterboard, being 3 of the biggest terrorists in the world today- each having participated in countless plots, and killed countless people in Latin America throughout the 70’s, 80’s and 90’s. But don’t expect the country that is granting them asylum and diplomatic protection to be invaded and looted by the US, because that country is the US. But has such unspeakable hypocrisy been mentioned by Obama? Carriles and Bosch, who both participated in the bombing of a Cuban Airlines passenger flight in 1975, killing over 70 innocent civilians, will be housed, shod, fed and watered in Obama’s America. The hatred of these vicious terrorists towards Cuba, who described each Cuban passenger airplane as a "legitimate target", will be replicated in effect by Obama himself, who has vowed to continue the 40-plus year old embargo that has contributed much to crippling the island.

Maybe his most depressing position is on Israel. Every year, the UN Assembly votes on the resolution condemning the Israeli occupation of Palestine. Every year, every single year, every country in the world votes in favour of this resolution. The only ones to abstain are the US, Israel, and 4 or 5 Polynesian US protectorates- Guam, The Marshall Islands etc. This is an illustration of how extreme a position any support of the occupation is. Yet Obama, in his now notorious speech to AIPAC (the US Israel Lobby) stated that under his presidency, “Jerusalem will be the undivided capital of Israel”. This actually represents an escalation of an occupation that is completely illegal in the eyes of the World Court, the UN, and the 4th Geneva Convention, which prohibits the seizure of land by military force. It represents an escalation of the conflict that lies at the heart of global geo-political instability. But what makes it depressing is that Obama is fully apprised of Palestinian issues. He has dined with the late great Palestinian scholar and activist Edward Said. He is friends with scholar and Palestinian activist Rashid Khalidi. He is aware of the issues. But yet he still has the capacity, in spite of this, to take up a position so extreme in the eyes of the whole world, of the international legal system, of all major international human rights groups, but one that is expedient to his political career. If he cannot act in the interests of justice despite having had all the past experiences necessary to make a stand on this, then what are the hopes for him making any just decisions as president, when faced with pressure from special interests?

Its not just on foreign policy that Obama fits the mould of all others that have gone before him. Back in October 2001, he voted to pass the PATRIOT Act, one of the most monstrous pieces of legislation in the post war US, that essentially allows the government to spy on its citizens without warrants and without recriminations. He voted in favour of the telecoms immunities bill, during the Democratic primaries, which granted telecoms companies retroactive immunity for prosecution they might have faced for having helped Bush wiretap the private phone calls of US citizens. Such monstrous acts were endorsed by Obama despite both anonymity and limelight. So neither can be used as a variable to hope that under one or the other circumstance he would act differently. Such drastically corrupt measures came to be among the hallmarks of the Bush presidency- and they were freely endorsed by Obama, when there was no pressure on him to do so. He kept this up right until the end of the race, voting in favour of giving (not lending, or investing, note) Wall Street banks- Goldman Sachs being his 2nd biggest source of donations( http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638) - $700 billion to bail out their irresponsible behaviour. That’s around $5 000, or 6 weeks gross salary- for each average US tax payer. Bear that in mind when he next says that he is a man of Main Street over Wall Street- it is just fundamentally false, contradicted by all important evidence. It wasn’t as if there was great public pressure against this- like the telecoms bill, like the PATRIOT Act, there was overwhelming popular opposition to this, but Obama chose to listen to his financial backers, rather than his popular backers.

Private political discourse has a spectrum that does indeed range from left to right. This is why Obama will indeed be a more progressive president than Bush, and probably Clinton too. But the real spectrum of public discourse is one that dwarfs that of private political discourse, extending slightly further to the right, and lurching a very, very long way to the left. This is why public policy will never match public opinion, and why any shifts to the right and left, republican to democrat cannot be taken seriously, because they are just illusory shifts that in the grand scheme of things do not represent fundamental change- that’s to say, change that the public believes in. This is why, once the glow of the halo has died down a bit, and people start rubbing their dreary early morning eyes, they will surely see disillusionment staring back at them- not as bad as Bush style disillusionment, but certainly Clinton style, and more importantly, a cold sober assessment of the facts will show quite simply that Obama has fit snugly into the pattern of presidential politics, and people will have had to suffer and die for his being there.

Change that we can all believe in is going to have to wait a little while longer I’m afraid.

Anonymous said...

So it's now known that Geithner has printed $8 TRILLION in the last few months, and nobody knows who got it, real money, you could have fought THREE IRAQ WARS!!!

That is the beauty of the new 'manufacturing consent', any amount of money can be printed, and handed to a secret party. This means HUGE FUCKING wars on the HORIZON.

THE most pressing problem for FED-RESERVE is who will take this worthless paper?? That is WHY Geithners #1 goal is that they control the world currency.

Otherwise the US is fucked.

tim said...

What I know about Geithner is that Schiff thinks he's going to do all the wrong things.

Anonymous said...

FUCK SCHIFF, do you people do anything but WATCH TV,

SCHIFF is just like fucking Rogers, ... just another guy selling his fucking MUTUAL, and ... PRO COMMODITY, ... gold-bug, ...

SCHIFF doesn't even talk about WHO Geithner is nobody is talking about Geithner, cuz he's the wizard-behind the curtain.

DO the wrong thing?? SCHIFF according the the U-TUBE above, says to do NOTHING, a little late for that SHIT, considering that in the the last six months GEITHNER has given away $8TRILLION dollars to unknowns...

The trouble with SCHIFF is that he doesn't tell you whats going on except to BUY GOLD.... Just more fucking TV bullshit.

Remember these people wouldn't even be on TV if they weren't APPROVED,

Just read the PRESS nothing but praise on GEITHNER, but nothing on who he is, and his agenda.


SCHIFF thinks that Geithner doesn't have a chance, but the trouble is GEITHNER is going to be the ONE running the show and NOT SCHIFF, what Schiff thinks is about as important as what any of us cunts think, which is fucking ZIP.

Geithner is going to do what Schiff fears MOST, but what SCHIFF doesn't mention is that the END-GAME for Geithner is complete world control, and single currency, was they control that it doesn't matter what anybody thinks.

Schiff is just a 'manufacturing consent' talking head.

Anonymous said...

Is any of this 'bad', who gives a fuck, I just find it amusing.

We all fucking know that the US is a used up old WHORE of a super-power, that this AIN'T the great depression, back then the US had OIL, and natural-resources ( trees ), its all fucking gone now, there is NOTHING left to steal.

The rest of the world, is NOT going to go along with GEITNER controlling the worlds paper currency, unless the US can manufacture one fucking huge fucking crisis, that even gets CHINA on our side, and for now CHINA doesn't need us anymore, as our consumers are fucked.

China doesn't even want our worthless paper, which is WHY Geithner MUST issue a new World-Currency that the WORLD will be forced to accept.

Bury your fucking GOLD, and deep.

Anonymous said...

Got $100?

a. Drinks at the Loft
b. Dinner at Volo (mmmm, Bellinis) c. Late night dancing at the Blacksmith.

Anonymous said...

WARREN BUFFETS BRK.A is NOW RATED as JUNK!!!!!! WHO WOULD HAVE GUESSED?? I have been saying this forever here.

...

Buffett's apostles losing faith
By Michael J. de la Merced
Published: November 24, 2008
NEW YORK: Over the past two weeks, investors seem to have lost faith in America's most avuncular prophet of capitalism: Warren Buffett.

Companies like Citigroup, whom analysts and investors have held questions about for some time, have been battered by the market violence. But Buffett's holding company, Berkshire Hathaway, a sprawling empire of companies and stocks with the highest possible credit rating, has seen its shares tumble 31 percent since Oct. 1.

And the cost of protecting Buffett's investment vehicle against default has doubled over the past two weeks, reaching levels more appropriate to companies whose debt ratings are near junk status. That has come at a price, not least of which is Buffett's personal fortune, a third of which is tied up in Berkshire stock. But it is also a sign of the malaise that has gripped markets amid the most sweeping financial turmoil since the 1930s.

"It is truly an extraordinary sign of the times that people appear to have lost faith in Buffett's investing acumen and conservative nature," Whitney Tilson, a hedge fund manager who owns Berkshire shares, said.

Investors appeared less worried about Berkshire on Friday. Class A shares in the company, whose core business is insurance, rose 16 percent to $90,000. That values Berkshire, which owns NetJets, Sees Candy and Fruit of the Loom, as well as shares in blue-chip companies like Coca-Cola and General Electric, at about $139 billion. But that is still a 36 percent decline from Berkshire's $216 billion market value on Jan. 2. In Monday afternoon trading, the shares were up $6,710, or 7.5 percent, at $96,710.
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In an interview on the Fox Business Channel, Buffett professed little worry about Berkshire's steep stock drop. "It's happened to me three other times in my life, too," he said, mentioning a 55 percent decline in 1974 and a 50 percent fall from 1998 to 2000.

To say that Buffett is perhaps the world's most respected investor may be an understatement. Thousands descend upon Nebraska for Berkshire's shareholder meeting every year to listen to observations from "the Oracle of Omaha," and dozens of books have been written about his buy-and-hold investing strategy.

And companies acquired by Berkshire are considered best-in-breed - a prestige sought by Goldman Sachs and General Electric when they announced investments by Buffett in September and October. (To secure the investor's support, both companies agreed to pay millions of dollars in annual dividends to Berkshire.)

During the 2008 presidential campaign, Buffett was more than an informal adviser to Senator Barack Obama: his name was invoked by both candidates as a bipartisan totem, meant to assure voters that the economy would get better.

But Buffett's primary business, Berkshire, has been tarnished amid the market tumult. Class A shares fell for nine straight days through Thursday, and even at Friday's closing price are down 36 percent for the year.

Buffett's stamp of approval has at times failed to work its former magic. In October, the investor publicly supported the government's first proposed bailout plan - only to see the House of Representatives shoot it down. And despite his glowing appraisals of Goldman and GE, the former has since fallen about 60 percent and the latter 45 percent.

On paper, Berkshire's core business appears to be performing in line with the rest of the market. Its third-quarter profit fell 77 percent from a year earlier, hurt in part by the impact of two hurricanes on its insurance business and drops in the value of many of its stock investments.

Still, Berkshire avoided the sort of risky bets that sank rivals like American International Group, and its wide array of portfolio companies could help ensure that at least some of its businesses are doing well.

What seems to be the primary concern is Berkshire's plying in two types of derivatives, instruments that have become taboo after the collapses of AIG, Lehman Brothers and scores of other financial institutions.

In particular, analysts and investors point to the company's bet that four stock market indexes, including the Standard & Poor's 500-stock index, would rise by 2019. Berkshire sold these private contracts to unknown investors, reaping $4.85 billion up front.

But in the worst-case scenario - the four indexes' values fall to zero - Berkshire could pay as much as $37 billion if those stock markets are not at the agreed-upon levels starting in 2019. Because of accounting rules, Berkshire has marked down the value of those contracts by $6.73 billion.

And many in the markets appeared to fear that Buffett had chased easy money and exposed his company to significant risk. Letters disclosed by the U.S. Securities and Exchange Commission on Friday show that it began asking Berkshire for more information on the contracts in June.

Anonymous said...

"It is truly an extraordinary sign of the times that people appear to have lost faith in Buffett's investing acumen and conservative nature," Whitney Tilson, a hedge fund manager who owns Berkshire shares, said.

*

A holding company is a holding company, ,and BRK.A is a con-job, a pyramid scam for 40+ years, that is now imploding.

Those that hold this shit will lose all. Note the hokey-pokey that Berkshire has been playing, selling billions of dollars of index-options, with no fucking hope in hell of ever making good on them.

Here's a rhetorical question, is BUFFET to big NOT to bail-out???

Anonymous said...

Got $100?

a. Drinks at the Loft
b. Dinner at Volo (mmmm, Bellinis) c. Late night dancing at the Blacksmith.


*

$3 20-oz pints of 'real beer' at deschutes on monday, and the best burger in TOWN for $5, even PUG's are smart enough for this deal.

Anonymous said...

Bend council picks Barram to fill Friedman's seat

Anonymous said...

Who posted earlier that it was linda johnson? Thank god she is out

bruce said...

Re: Who posted earlier that it was linda johnson? Thank god she is out

Only 'till January, for Telfer's seat....

Who's worse--Linda or Leonard?

Anonymous said...

BP,

I'm an insider, believe me its quid-pro-quo, Linda Johnson is going to get her seat back.

Anonymous said...

SUNRIVER KUNTS WANTED


SilverStar Destinations LLC has defaulted on a $26.7 million loan it received to redevelop Sunriver Mall. The lender, Las Vegas-based Vestin Mortgage, has started foreclosure proceedings and litigation to recoup its losses.

Jon Harder and three partners formed Salem-based SilverStar Destinations in 2006 to broker the purchase and redevelopment of prime real estate in Sunriver, a resort town 15 miles south of Bend. Harder is also CEO of beleaguered assisted living operator Sunwest Management Inc. of Salem.

The plan included a $200 million remodel for the aging Sunriver Mall plus up to 800 condominiums, a 100-room hotel and a parking garage. SilverStar is the mall’s third owner in five years. Sunriver has 4,000 housing units, but just 1,000 year-round residents.

Documents filed with the Securities and Exchange Commission Nov. 10 by Vestin Mortgage reveal that SilverStar Destinations is in default on money owed to the company.

The Vestin loan covers three commercial retail properties — Sunriver Mall, Marcello Building and Chrome Pony — on 17.5 acres of land.

Harder offered a personal guarantee for the loan, according to filings with the Sunriver Planning Commission.

A spokesman for Vestin said the company does not comment on specific loans or borrowers.

John Goodman, principal of SilverStar Destinations, said large-scale redevelopment plans at Sunriver are on hold.

“We’re investing in improvements to the current facility given that the full-scale redevelopment is going to be significantly delayed,” he said in an e-mail.

Sunwest Management Inc. — a $600 million company that is the largest assisted living operator in Oregon and the fourth largest in the United States — is selling off its 280 assisted living properties to stave off bankruptcy. At least 12 properties are already in foreclosure.

Deschutes County records also show that Harder has fallen behind on financial obligations for about eight residential real estate holdings in the area, and that one property in the Vandevert Ranch development is being auctioned off Feb. 13 as part of foreclosure proceedings.

Anonymous said...

A WORD FROM OUR SPONSOR...

Statement of Congressman Ron Paul

United States House of Representatives

The Austrians Were Right

November 20, 2008



Madame Speaker, many Americans are hoping the new administration will solve the economic problems we face. That’s not likely to happen, because the economic advisors to the new President have no more understanding of how to get us out of this mess than previous administrations and Congresses understood how the crisis was brought about in the first place.

Except for a rare few, Members of Congress are unaware of Austrian Free Market economics. For the last 80 years, the legislative, judiciary and executive branches of our government have been totally influenced by Keynesian economics. If they had had any understanding of the Austrian economic explanation of the business cycle, they would have never permitted the dangerous bubbles that always lead to painful corrections.

Today, a major economic crisis is unfolding. New government programs are started daily, and future plans are being made for even more. All are based on the belief that we’re in this mess because free-market capitalism and sound money failed. The obsession is with more spending, bailouts of bad investments, more debt, and further dollar debasement. Many are saying we need an international answer to our problems with the establishment of a world central bank and a single fiat reserve currency. These suggestions are merely more of the same policies that created our mess and are doomed to fail.

At least 90% of the cause for the financial crisis can be laid at the doorstep of the Federal Reserve. It is the manipulation of credit, the money supply, and interest rates that caused the various bubbles to form. Congress added fuel to the fire by various programs and institutions like the Community Reinvestment Act, Fannie Mae and Freddie Mac, FDIC, and HUD mandates, which were all backed up by aggressive court rulings.

The Fed has now doled out close to $2 trillion in subsidized loans to troubled banks and other financial institutions. The Federal Reserve and Treasury constantly brag about the need for “transparency” and “oversight,” but it’s all just talk — they want none of it. They want secrecy while the privileged are rescued at the expense of the middle class.

It is unimaginable that Congress could be so derelict in its duty. It does nothing but condone the arrogance of the Fed in its refusal to tell us where the $2 trillion has gone. All Members of Congress and all Americans should be outraged that conditions could deteriorate to this degree. It’s no wonder that a large and growing number of Americans are now demanding an end to the Fed.

The Federal Reserve created our problem, yet it manages to gain even more power in the socialization of the entire financial system. The whole bailout process this past year was characterized by no oversight, no limits, no concerns, no understanding, and no common sense.

Similar mistakes were made in the 1930s and ushered in the age of the New Deal, the Fair Deal, the Great Society and the supply-siders who convinced conservatives that deficits didn’t really matter after all, since they were anxious to finance a very expensive deficit-financed American empire.

All the programs since the Depression were meant to prevent recessions and depressions. Yet all that was done was to plant the seeds of the greatest financial bubble in all history. Because of this lack of understanding, the stage is now set for massive nationalization of the financial system and quite likely the means of production.

Although it is obvious that the Keynesians were all wrong and interventionism and central economic planning don’t work, whom are we listening to for advice on getting us out of this mess? Unfortunately, it’s the Keynesians, the socialists, and big-government proponents.

Who’s being ignored? The Austrian free-market economists—the very ones who predicted not only the Great Depression, but the calamity we’re dealing with today. If the crisis was predictable and is explainable, why did no one listen? It’s because too many politicians believed that a free lunch was possible and a new economic paradigm had arrived. But we’ve heard that one before--like the philosopher’s stone that could turn lead into gold. Prosperity without work is a dream of the ages.

Over and above this are those who understand that political power is controlled by those who control the money supply. Liberals and conservatives, Republicans and Democrats came to believe, as they were taught in our universities, that deficits don’t matter and that Federal Reserve accommodation by monetizing debt is legitimate and never harmful. The truth is otherwise. Central economic planning is always harmful. Inflating the money supply and purposely devaluing the dollar is always painful and dangerous.

The policies of big-government proponents are running out of steam. Their policies have failed and will continue to fail. Merely doing more of what caused the crisis can hardly provide a solution.

The good news is that Austrian economists are gaining more acceptance every day and have a greater chance of influencing our future than they’ve had for a long time.

The basic problem is that proponents of big government require a central bank in order to surreptitiously pay bills without direct taxation. Printing needed money delays the payment. Raising taxes would reveal the true cost of big government, and the people would revolt. But the piper will be paid, and that’s what this crisis is all about.

There are limits. A country cannot forever depend on a central bank to keep the economy afloat and the currency functionable through constant acceleration of money supply growth. Eventually the laws of economics will overrule the politicians, the bureaucrats and the central bankers. The system will fail to respond unless the excess debt and mal-investment is liquidated. If it goes too far and the wild extravagance is not arrested, runaway inflation will result, and an entirely new currency will be required to restore growth and reasonable political stability.

The choice we face is ominous: We either accept world-wide authoritarian government holding together a flawed system, OR we restore the principles of the Constitution, limit government power, restore commodity money without a Federal Reserve system, reject world government, and promote the cause of peace by protecting liberty equally for all persons. Freedom is the answer.

Anonymous said...

RUSSIA predicts the new 'AMERO' currency in coming months, and a complete meltdown in US economy. Note, that the french, & german press is full of these storys, but nothing in so called 'free' USA.


Russian analyst predicts decline and breakup of U.S.
19:31 | 24/ 11/ 2008



MOSCOW, November 24 (RIA Novosti) - A leading Russian political analyst has said the economic turmoil in the United States has confirmed his long-held view that the country is heading for collapse, and will divide into separate parts.

Professor Igor Panarin said in an interview with the respected daily Izvestia published on Monday: "The dollar is not secured by anything. The country's foreign debt has grown like an avalanche, even though in the early 1980s there was no debt. By 1998, when I first made my prediction, it had exceeded $2 trillion. Now it is more than 11 trillion. This is a pyramid that can only collapse."

The paper said Panarin's dire predictions for the U.S. economy, initially made at an international conference in Australia 10 years ago at a time when the economy appeared strong, have been given more credence by this year's events.

When asked when the U.S. economy would collapse, Panarin said: "It is already collapsing. Due to the financial crisis, three of the largest and oldest five banks on Wall Street have already ceased to exist, and two are barely surviving. Their losses are the biggest in history. Now what we will see is a change in the regulatory system on a global financial scale: America will no longer be the world's financial regulator."

When asked who would replace the U.S. in regulating world markets, he said: "Two countries could assume this role: China, with its vast reserves, and Russia, which could play the role of a regulator in Eurasia."

Asked why he expected the U.S. to break up into separate parts, he said: "A whole range of reasons. Firstly, the financial problems in the U.S. will get worse. Millions of citizens there have lost their savings. Prices and unemployment are on the rise. General Motors and Ford are on the verge of collapse, and this means that whole cities will be left without work. Governors are already insistently demanding money from the federal center. Dissatisfaction is growing, and at the moment it is only being held back by the elections and the hope that Obama can work miracles. But by spring, it will be clear that there are no miracles."

He also cited the "vulnerable political setup", "lack of unified national laws", and "divisions among the elite, which have become clear in these crisis conditions."

He predicted that the U.S. will break up into six parts - the Pacific coast, with its growing Chinese population; the South, with its Hispanics; Texas, where independence movements are on the rise; the Atlantic coast, with its distinct and separate mentality; five of the poorer central states with their large Native American populations; and the northern states, where the influence from Canada is strong.

He even suggested that "we could claim Alaska - it was only granted on lease, after all."

On the fate of the U.S. dollar, he said: "In 2006 a secret agreement was reached between Canada, Mexico and the U.S. on a common Amero currency as a new monetary unit. This could signal preparations to replace the dollar. The one-hundred dollar bills that have flooded the world could be simply frozen. Under the pretext, let's say, that terrorists are forging them and they need to be checked."

When asked how Russia should react to his vision of the future, Panarin said: "Develop the ruble as a regional currency. Create a fully functioning oil exchange, trading in rubles... We must break the strings tying us to the financial Titanic, which in my view will soon sink."

Panarin, 60, is a professor at the Diplomatic Academy of the Russian Ministry of Foreign Affairs, and has authored several books on information warfare.

Anonymous said...

You don't see very often where someone clearly connects the Amero ( new Obama currency ), and Rahmbo-Emmanuel and Zionism very interesting for people interested in their future.

***

Obama: A Euphoric Feeling that Change will Occur

by Dr. Elias Akleh

After Obama’s presidential victory a euphoric feeling swept the streets of most of the States. Thousands of people gathered in the Grant Park in Chicago, thousands others went into the streets of their cities celebrating this occasion. They called it a historic election, a nonviolent revolution, a dream comes true, a breakthrough and a victory over racism. Obama was called a hero, a savior, and some even called him a messiah. Obama’s call for change has become an orgy that tantalizes peoples’ feelings and hopes.

This "change Orgy" became contagious and spread to other countries especially in Africa, where Kenya, the birth place of Obama’s father, declared a national holiday to mark Obama’s victory. Since American foreign policies have a direct impact on almost every country in the world, many world leaders, especially African leaders were hoping to start a new fresh page with Obama’s administration. After the collapse of the Soviet Union the Bush administration felt empowered and justified to be more condescending towards the rest of the world, and felt free to do anything and everything to expand its control around the world. With Obama in the Oval Office world leaders are hoping for a "good" change.

Obama’s victory, and more accurately Democrats’ victory, was a sure thing. Through two major wars in Iraq and Afghanistan, the war in Haiti, their proxy wars in Africa, war in Georgia, war against Lebanon via Israel, and their violations of international laws, plus the internal wars against the freedom of American people, and the ravaging of American economy, the Republican neoconservative Bush administration had swung the pendulum to the extreme right, and now it has but to swing back to the opposite direction. Everybody knew that after eight disastrous years of Republican rule the Democrats will have their turn. This inevitable change is what brought Obama to the White House. Obama rode to the White House on the people’s wish for change

This has been the most expensive American election so far. The combined cost of both Democratic and Republican campaigns was estimated to about one billion Dollars. McCain raised about $360 millions while Obama raised about $640 millions. In just one month Obama was able to raise $150 millions. Such amounts of money has not been raised from the poor and middle class American families, millions of whose bread winners had lost their jobs to outsourcing, lost their investments and retirement funds, and finally lost their homes. Such money came from the power elite; bankers and corporations, who wanted to have a saying in the decisions of the new American administration. Obama cannot accept such funds without paying a price of loyalty to such donors. With this money Obama was able to employ media power to reach every American minority and to talk to them in their own ethnic languages and their own dialects. He was able to deliver his dream of change to the newly young voters in their colleges and universities. With double the money McCain had, Obama was able to "buy" more votes.

Record voters turned out to vote for Obama; estimated to be 64% with 62.3 million votes. The majority of them were Blacks and Latino. Race, as well as economy, had played the greater influence in electing Obama. This was obvious in all election rhetoric that could not escape using racist terminologies. Unfortunately, a large majority are not aware that race is not the core issue of the struggle. It is, rather, a class struggle; the few filthy rich against the poor. Many colored rich minorities had, and still, enslave the poor of their own color. Let us remember what military black previous Secretary of State Collin Powell and his successor Chevron’s Condoleezza Rice had done to the blacks of America.

Obama is no different. He will soon be exposed the person he really is; just another wolf in sheep clothing. Obama’s promises to protect the middle class are just empty promises. This was obvious after he approved the $700 billion (plus interest) bailout to give more tax money to corrupt bankers, who will use that money to buy weaker banks. The money should have been used to pay portions of the mortgages the middle class owe to the banks, so they could keep their homes. His acclaimed tax cut promise to the middle class means nothing to its unemployed members. The official unemployment rate is 6.5% not counting those, who are not receiving unemployment benefits and are thus not counted. In 2008 alone Americans have lost 1.2 million jobs to outsourcing. Obama’s solution to outsourcing is offering corporations tax cuts as incentives to keep the jobs in the US. Such incentive is nothing compared to the huge savings, in the forms of benefits and retirement funds the corporations are saving by employing very cheap labor force unprotected by any labor laws in third world countries lacking any environmental laws. Obama never talked about the poor Americans. For him they don’t exist.

Obama’s real position concerning the unfair NAFTA agreement, that he aggressively criticized and called for its revocation, was exposed later, when it was leaked that his advisor Astan Goolsbee had called Canadian officials asking them not to take Obama’s anti-NAFTA rhetoric seriously, but "…should be viewed as more about political positioning than a clear articulation of policy plan".

People, who think that a president like Obama with his limited political experience could actually change policies, are gravely mistaken. He will be under the influence of members of his administration, more experienced experts and advisers, who will shape his decisions. They are expected to be more right-wing than the Republican neoconservatives. Each interest group, who contributed to Obama’s campaign, will push its own agent into this administration to implement its own agenda that might be different than and opposite to the agenda of other interest groups. His administration will be pulled to too many different directions and the well being of the common people will be forgotten and lost.

Obama’s first appointment (pushed onto him by AIPAC) as his chief of staff is an Israeli citizen and Israeli army veteran Rahm Emanuel, whose father was a member of the Irgun; a Zionist terrorist group who perpetrated terror attacks in British mandated Palestine. This appointment comes to guarantee and to foster Obama’s promised support to Israel. Obama promised $30 billions of American tax money in military aid to Israel. Ignoring the fact that Israel has violated many international laws, and is an occupying power, Obama declared his support to Israel as a "theocratic" Jewish state with undivided Jerusalem as its capitol. He also vowed to "isolate Hamas" the Palestinian representatives elected in the most free and democratic election as observed and certified by international observers. He also threatened to do everything in his power to prevent Iran from obtaining nuclear weapons to threaten Israel.

Hypnotized by "change" and "race" people could not see the similarities Obama has with McCain/Bush/Republicans. They are all for wars in Iraq and Afghanistan. Although initially Obama opposed the Iraqi invasion, he always voted for the surge and more war funding in Iraq. He wants to leave a residual force in military bases in Iraq, and wants to ship another military surge to Afghanistan to keep bombing Pakistani borders. He supported Israeli terror and aggression against Palestinians and the war against Lebanon. Obama is belligerent towards Iran promising to do "everything in my power to prevent Iran from obtaining a nuclear weapon". He was confrontational towards Russia after the war in Georgia. He is for war against "global terrorist" and promised to bring Osama bin Laden in dead or alive. He is for drug wars (protecting drug trade, whose money goes through Wall Street). Locally, he supports the death penalty, pollutant nuclear and coal industries, and had never talked about abolishing oppressive laws such as Patriot Act, homeland security, internet control, and wiretapping and spying on American citizens.

The most dangerous is Obama’s denial of any evidence that the North American Union (NAU); the so-called Security & Prosperity Partnership of North America (SPP) that President Bush had signed in 2005 with Canada’s Prime Minister Paul Martin and Mexican President Vicente Fox without the approval of the Congress, will take place. Ohio’s Representative Marcy Kaptur stated "There is a plenty of evidence that this is going on". Presidential candidate Ron Paul had also denounced this union. The North American Union is based on eliminating the borders between the three countries, and creating a new common currency called Amero; a monetary conversion that would transfer more wealth to bankers similar to what happened in Europe’s conversion to the Euro. Most American manufacturing jobs are planned to move to cheaper Mexico with raw material imported from Africa and South East Asia into Mexican ports, and the manufactured products would be transported via a super highway linking Mexico to Canada through the heart of American middle states. This super highway is planned to be leased and controlled by a foreign body; Spanish Centra Company. Yet when asked about this union, Obama pretended that the term is new to him. It is a sin for a president-to-be to deny such evidence, and even more sinful if he really does not know about it.

Obama is just a sweet dream people will enjoy for a short while. The morning after, people will wake up and will recognize that it was but a dream.

Anonymous said...

A 500LB gorilla self destructs in a village of ant's, its not going to be quite so simple.

***

New World Order as Global Financial Matrix Self Destructs
Politics / New World Order Nov 23, 2008 - 04:44 PM

By: T_Anthony_Michael

Politics
Now that the genie is out of the bottle, worldwide economic, financial and political events will proceed with the inexorable force of destiny. The forthcoming changes, shifts and breaks with the past that are delineated below do concern the unsavory business of WHAT, positively, will not be brought into the future. This is of critical importance. Why? Because those who do not know, and understand, and heed history, are always, always forced to repeat it.


I. As we all sat back and waited for this year's October Surprise, please know that it came a little bit early this year on September 15 th which will forever be known as PITCH BLACK MONDAY. Actually, the entire month of October was set up to be a series of Black Monday's, as well as every other day of the week shaped up to be. It's really a good time to brace your self since this year's election cycle, and beyond, will bring with it a whole new season of surprises. Things like the beginning of the end of FIAT money – the real root cause of all our financial problems and economic ills. This foundational flaw, together with all of the multi-layered financial/economic/accounting mechanisms and schemes that have insidiously crept into the system, are the ‘not talked about' institutionalized culprits and structural deformities that really need to go. Without them, the perps wouldn't be so tempted to stack the deck against us all the time.

The only legitimate currency is that which is backed by GOLD, or some other precious commodity that is universally valued, and issued directly by the US Government, not a privately owned, organized crime syndicate like the FED. Debt driven, fractional-reserve banking – the real bane of global finance – will then be banished from the planet forever, along with the overlords of disaster capitalism, institutionalized usury & loan-sharking (e.g. World Bank & International Monetary Fund), as well as their economic hitmen. Finally, the central organizing principle of modern society, and especially Western Civilization, will no longer be: maximizing shareholders' wealth .

The writing is on the wall: THE FED IS DEAD . And so is the Fed's collection agency – the IRS. The FED has obviously been on extreme life support since September '08, and the only compassionate response is to let it go peacefully into the sunset. Perhaps we should organize a simple taxpayers' revolt, not too unlike those that occurred prior to the American Revolution, to bury this beast forever. When the people do wake up, and realize that the Federal Reserve Note that they carry in their pocket is exactly that – a note (i.e. debt, obligation, debit, commitment, instrument of indebtedness), things will start to get REEEAL interesting!

II. Another little surprise will come in the form of an announcement that goes something like this: The USA was conceived to be a CONSTITUTIONAL REPUBLIC , not a democracy by plutocracy . Or corpocacy , or oligarchy/synarchy , or crony capitalism or any other ism/cracy/archy they have tried to foist upon US. The founding fathers would be absolutely horrified to see the “ mob rule by the privileged elites” into which this once great nation has degenerated. Every political philosopher knows that democracy, when sufficiently dumbed down and unduly influenced by the moneyed ruling class, will always devolve into a despotic tyranny. Therefore, the wholesale exportation of our fraudulent notion of democracy, and its supposed freedoms (to buy, buy, buy after watching the boob tube hucksters), by the political and corporate classes must be reconsidered. And it will be soon, on a new channel during this “Fall” season's new lineup! Stay tuned —

The recent presidential election, incidentally, is perhaps the most flagrant example of how the US constitutional republic has been suspended (at the very least, once every 4 years, right?). Just as much as the voting populace has been suspended in the state of perpetual ignorance is bliss for generations. Can you imagine – the winner having raised close to $700 MILLION in campaign contributions – just how many debts the president-select* has incurred?! How, pray tell, do you think these debts will be paid back in light of the trillions that are already owed across the world by the US Treasury, US corporations, US citizens, etc. They won't be paid, because they can't be paid. The US Corporation is, and has been, bankrupt for quite some time now. It's stone cold broke and plum busted. And We The People should be thoroughly disgusted. Therefore, this fraudulent corporate entity – US Inc. – can now be trotted off the global stage, so that the REAL Constitutional Republic can be resurrected to its proper place in the nation's governmental and political life.

*Demoplican or Republocrat – either way, they are still two sides of the exact same coin. The coin of the realm that excludes We The People.

III. Another announcement will be made, in the not too distant future, about the business entity commonly known as the CORPORATION – the main huckster of this ‘brand' of faux democracy . Surely, if the devil were to ever choose the perfect form in which to enter in order to carry out his nefarious designs, Inc . is it. Is there any other entity on earth – person or party, organization or association, government or institution, jurisdiction or bureaucracy, club or group, fraternity or sorority, etc. that can function with such impunity, as it hides behind the shield of LIMITED LIABILITY. Those two words have given complete cover for the flagrant and wanton destruction of planet Earth.

You name it – oil slicked coastlines, razed rainforests, beaches strewn with dead dolphins and whales. Not to mention the complete erosion of human, civil and national rights, wherever INC decides to set up shop.

Let's pick a country. Let's go to India and visit Bhopal of Union Carbide fame. Close to 8000 people died within two weeks of that December day in 1984 in what is known as the worst industrial disaster of the last century. Now that Dow Chemical owns Union Carbide, you can only imagine the veritable phalanx of attorneys who are paid unconscionable fees to ensure proper responsibility and accountability will never be assumed by their master.

Or let's visit the Punjab and talk to the thousands of widows of farmers who committed suicide because of Monsanto's “seedless seeds”. Or go to just about anywhere on that subcontinent where a Walmart is being protested for land theft, encroachment and despoilation. Let's not forget about all the Coca Cola bottling plants that have become notorious for stealing the most precious commodity that every Indian cherishes and covets – WATER. Well, that takes care of land, water, air … and blood. What else in heaven's name do these stakeholders want?!

We all know the deal. It's the one where the individual, and his/her environment, is always trampled in favor of the corporate interest. Isn't it time to really take stock of what our current predicament has left us with? Perhaps it's also time to seriously think about actually re-ordering the ORDER, instead of once again rearranging the deck chairs on the titanic. Like we've said, “ optimizing stockholder profit ” will soon be history, as the cease and desist orders are not far from being issued to Corporate America . Might as well get a head start on dissolving (or re-chartering) that corporation.

IV. Termination of Globalization : The dominating and predatory form, that is. No other global initiative has been more unsuccessful at creating a framework for a more efficient transfer of goods and services around the planet. Truly, every aspect of this corporate inspired policy has failed miserably. Wherever it promoters trumpet its stated intention to make markets more streamlined, effective and resilient, it has done quite the opposite.

One only needs to look at the current debacle within the European Union concerning the banking, credit, and stock market breakdowns. Never has a response from the appropriate governing bodies been more disorganized, full of mixed messages and working at cross purposes with the member states. It was like watching The Three Stooges (France, Germany & Italy) play musical chairs blindfolded with no clothes on. What an unprecedented spectacle, and in plain view for the entire world to watch! This will undoubtedly put the brakes on the concretizing of a North American Union and their planned currency – the Amero. Praise the Lord!

As a matter of fact, all of the financial unions and economic superstates (e.g. European Union; Southeast Asian Association for Regional Cooperation; Union of South American Nations) that have been created over the past many years will, by sheer necessity and desperation, be forced to re–organize themselves in the coming months and years. Even South America, which has two distinct camps that are constantly gummin' up the works for each other, will abandon their current emerging model in favor of one that enjoys complete freedom from its North American taskmaster. To their credit, they have set the bar higher than it has ever been set concerning their strongly stated desire to be free of IMF and World Bank control. Only Russia has exceeded their standards, as they had already been fleeced by the Oligarchs in what may very well be the grandest larceny of national wealth/resources in history. This, of course, was preceded by a 75 year scourge of incessant rape, pillaging and plundering by the Bolsheviks and their Western financiers & handlers. Clearly Mr. Putin will not allow a repeat of any such conduct within his borders, and the international persecution that he has suffered certainly reflects their displeasure and frustration with him. No wonder Vladimir Putin is now considered a “reincarnation” of Peter the Great by his own people.

The ruinous influence of these two globalization thugs (IMF & WB) can be instantly assessed by looking at the economic calamities they caused in Argentina (1999-2002), as well as in Thailand, South Korea & Indonesia during the 1997 Asian currency crisis. Likewise, every nation in Africa that has chosen to take on their monetary yoke has only misery and war and financial oppression to show for it. Wherever these 2 scrooges show their faces, it's quite like Ebenezer himself showing up to make a house call. You know the patient will soon find himself in a pine box after all the gold fillings and rings have been removed.

We have seen this globalization scam unfold in country after country, as a ruse to steal a nation's resources, always taking from those who have, and giving to those who want it. In fact, an objective assessment of all the world's current conflicts would reveal that the vast majority are directly the result of this geo-political/commercial dynamic. The privatization of water sources/bodies/supplies/rights is perhaps the most provocative and glaring, and can be found at the root of a number of these resource wars.

Clearly the verdict has been delivered: Economies are much less vulnerable, the more locally they are positioned and the less centralized their decision-making process. This arrangement affords much greater resiliency when dealing with the vicissitudes of the marketplace. And it takes the power away from those who are insulated in ivory towers, and far from the plight of the common man. It is time for everyone on the planet to “ think globally; act locally ”.

V. Stock market will become extinct . There is no greater tool at the disposal of those who can, and do, manipulate the various markets than the charade of “setting up” a formal system of trading, buying and selling of anything, as exemplified by the NYSE. This is where it all happens. From devastating whole national (and regional) economies, to toppling uncooperative corporate execs, to bringing 150 year old multi-billion $$$ companies to their knees within a week's time. From triggering stockholder revolts, to propping up corporate raiders, to extorting billions from national and/or corporate treasuries. They can, and do, do it all right there on the floor .

Really, the very best example of what occurs in these speculative market exchanges is the gambling casino. In Vegas, everyone knows that the house ALWAYS wins. It never loses. Even when there is the appearance of losing, it still wins. Go figure, but it's true. Your stockbroker is not too unlike the blackjack dealer. And your financial planner is often a croupier in disguise. So, the question remains, do you honestly know what your hard earned retirement money is invested in? If not, this is a very good time to find out!!!

For those of us who have been there, we know that whether you call it an oil bourse, a commodity exchange, or a bond market, you're still playing in a game that can go against you at any time. Wipe out your earnings in a heartbeat; devour your principal in a flash. It's often been said that when he comes, “he comes like a thief in the night”. Do you still feel you know where your entire life savings is currently residing?

The derivatives market represents the single greatest threat to worldwide economic stability and financial security. It poses such great potential for financial abuse and economic devastation that the current institutional arrangements of this commercial realm have become completely unacceptable. The alarming proliferation of hedge funds, as well as the growing number and variety of derivative instruments, has reached a critical mass that is incompatible with living a financially sound life on planet Earth. Simply put, some of these instruments are so far from the street – economic reality – that they put into jeopardy all the hard work, which appears in the form of real goods and services, that is produced by any economy at any given time. This predicament signifies a CLEAR AND PRESENT DANGER to us all.

Remember – DERIVATIVES are the real megilla. Derivatives, by their very nature, can be highly radioactive, and can go nuclear any time circumstances conspire in just the right, or wrong, way. Those who control their destiny can, likewise, utilize their inherent threat as a means of conducting financial and economic terrorism anytime, anywhere completely under the radar screen. It's time for them to go. And we trust it's just a matter of execution at this point.

VI. Mass Consumerism & Perpetual Economic Growth – the Fric & Frac of our Age – are history . One need not look any further than the inside of one's own home to see the ravages of these adopted twins. They own the bedroom, the living room, the family room and all the closets. They've taken over the kitchen, the den and the garage, as well. Since their middle names are Amass and Accumulate, we can only imagine what might lay hidden in the attic, the basement and the shed.

Ever since they became the twin pillars of Kali Yuga's overarching philosophy of life, things started to really go to hell in a handbasket … or rather gilded cage. How so? What else could one expect from a political economy that demands growth , necessitates growth and extols the virtues of growth at every turn (and on every other commercial and newscast). Growth, at the expense of WHAT!! We'll tell you what – Life!

One of the most tragic parts of this ever-unfolding tragedy has been the dramatic change in the spirit of the people with whom these twins associate. The very society loses its refinement, as the culture becomes debased. Aren't so many things associated with Americana experienced as coarse, and crude, and crass? Likewise, the nation, which was once known as the “land of the free; home of the brave”, morphs into a country reviled for its unkindness, lack of compassion and cruelty. Before anyone realizes, the citizenry is easily being herded, and then stampeded, into wars and conflict of every sort and kind.

What else could be expected when the meme of consumerism is subliminally implanted at such a young and tender age, and relentlessly reinforced from cradle to grave? And, what does it really say about a society when all who belong to it are known as consumers. Kind of like little pac-men (and pac-women) gobbling up everything in sight. Starts out with BIG Macs and 24 oz cokes, then super-sized HUMMERS, then oil fields and gold mines and precious rainforests, and then whole countries.

Likewise, in the corporate realm, any board director, company officer, division president, regional director, department manager, production supervisor, etc. will candidly speak to the greatest pressure in their lives. More income, more sales, more profit, more production, more revenue – anything that will show an increase in year over year growth. Always gotta GROW, even though yuv been out of puberty for 20 or 30 years!?

Well, you can imagine that this state of affairs can only go on for so long. As a matter of fact, this party's now over. And the hangover is about to begin. Perhaps it's time to send these twins on a permanent vacation to the waterless region .

VII. War, as a means of wealth creation, is now bankrupt. War, as a means of conflict resolution, is over. As a means to any end whatsoever, war is finished . You get the picture, don't you? War has outlived its usefulness, and has become as obsolete as the derivatives hawker. There is simply no more place for it in civil society. It's time for the curtain to fall on this show for the last time, and for all of its bad actors to hit the stage exit.

It never was a legitimate policy for conflict resolution, as we know. Virtually all conflicts and wars were manufactured in the boardrooms of the world. And impeccably stage managed by the directors of the war studios. Isn't the Iraq war a perfect example of this kind of terrible and awful-to-watch “B” movie?

Any deliberate, probing and unprejudiced analysis of all the major wars going back to the French Revolution will reveal an extraordinary degree of carefully calculated and coordinated events leading up to the actual conflagrations we call war. Just read the actual history that is only now beginning to surface, and you will reach this very same conclusion.

War has consistently served its masters in three ways which no longer have relevance in an enlightened civilization: (i) population control (ii) artificial creation of wealth for the plutocracy (iii) imposition of a tyrannical order in the wake of the chaos that always results from war. Population control in this context has different meanings. The number of people who are systematically genocided, wantonly annihilated and deliberately infected with disease agents serve the purpose of population reduction. Then there is the sheer terror of war and its effects on whole populations (see how easily controlled both the Germans and Japanese were after WWII). “Order out of chaos” is made easy when all concerned parties have been faced with the extraordinary distraction, mayhem and pandemonium that war always brings.

There are, of course, many other declared wars whose battlegrounds are far from the traditional battlefields of armed conflict. The WAR on Drugs. The WAR on Poverty. The WAR on Crime. The WAR on AIDS. Just like the WAR on TERROR , all of these so called wars are entirely bogus and fabricated, as they all have consistently produced outcomes that are completely contrary to their stated purposes. How so? Because each of them has been designed, and engineered, to perpetuate and expand the status quo. The War on Drugs, for instance, was designed in part to ensure that the opium (and all of its profitable derivatives) flows freely and efficiently from the poppy fields of Afghanistan to the targeted markets in America and elsewhere. In this way, all clandestine US and foreign intelligence agencies/secrets services are able to fund their innumerable black operations without any congressional oversight or public scrutiny from the massive revenues generated that this perfectly controlled black market provides. Oh, yes, did we forget to mention that most of these black ops are actually wars as well. What a Racket?! As Major General Smedley Butler once proclaimed to the world in his book: “WAR IS A RACKET.”

May the shadow governments of the warmongering and real “Axis of Evil” – the USA, the UK and Israel – truly imbibe the message contained in this ongoing proclamation: WAR is no longer an option . For each of these nations is facing an economic armegeddon of staggering and unprecedented proportions. When confronted with such an incapacitating monetary meltdown, the impulse and subsequent orchestrated plan, historically, has been to provoke wars through false flag attacks/operations. This knee-jerk, yet carefully calculated, reaction will no longer work. The consequential global financial apocalypse, this time around will simply be too demanding and debilitating, especially for those who would attempt to plunge the planet into a WWIII scenario. Why? The global money matrix, that supports and keeps their war machine well-oiled, has been in a slow motion collapse for many years, and is now in an epoch crashing free-fall. It's disintegrating before our eyes, and will soon be unable to fund not so much as a dustup in the neighborhood sandlot.

The 4 th Reich has completely run its course. This last covert phase of the “Holy Roman Empire” is finally over. And it's now imperative that the maestro, and his orchestra, in ‘Rome' get over it. Let us once again proclaim, here and now, that: WAR HAS COME TO AN END .

VIII. There is a very profound and significant connection between the US Government sponsored and staged terrorist attacks of 9/11/01 and the PRE-PLANNED Financial & Economic 9/11 of 2008 that may be difficult for many to fully embrace. But here it goes:

The OMEN that 911 truly was, looks a little bit like THE LORD OF THE RINGS .

Remember the Twin Towers ? When they came down in NYC, it was a message to humankind that the reign of the Almighty Dollar was coming to an end . As a nation's currency goes, so goes its destiny. Her financial strength and economic prowess were on the wane, and soon to be greatly diminished. Just as the WTC (financial capital of the world) was pulverized into dust, the US Dollar would be swept into the ash heap of history. Just as we see it collapsing all around us, exactly 7 years after the original 911 apocalyptic events.

When the Ring of Power was finally destroyed, like the Pentagon (ring-shaped command center of the military-industrial complex) was mortally wounded and damaged, the message was equally clear. Her military might and superior force would be reduced to rubble in the twinkling of an eye. She would, likewise, soon see the demise of Her all-pervasive state sponsored terrorism . This, because She had lost all moral ascendancy. Besides, the empire could no longer be sustained politically, financially, practically or ethically, as the seeds of its own destruction had fully sprouted. The most fatal seed grew into that extremely corrupt and predatory form of corporate, crony capitalism which was so socially unconscious, and so environmentally unaware, it was quite doomed from the very beginning.

The GOOD NEWS is that the nation – its people – will now be compelled to beat their “swords into plowshares” and their “spears into pruning hooks”.

Just as the Phoenix rose from its ashes, so too will America ascend to even greater heights. As long as She ascends with the guidance of the highest of ideals, loftiest of principles and noblest of intentions. And She reforms, and transforms Herself, in good faith, in earnest and with haste.

As a modern day prophet said in the days immediately following September 11, 2001:

“America, Wake up ! ! ! Seize this God-given opportunity. There is no more time to dally in fear and ignorance and greed. For yours is a destiny that must serve as a beacon of Light and Hope and Peace to the world. Make haste, the time is drawing nigh!”

Anonymous said...

http://www.youtube.com/watch?v=Dk9-VkIf2pI

Anonymous said...

Councilor Chris Telfer - who will be stepping off the council herself soon, to serve as state senator - was the lone no vote (BARRAM), backing Leonard instead.

*

TELFER BITCH will give Linda Johnson her seat.

IHateToBurstYourBubble said...

BIG VERY BIG INSURANCE ARSON TODAY UP AT PRONGHORN.

ALL THE INSIDE REALTY PEOPLE TALKING ABOUT 'NEW WAY' TO OFF-LOAD BEND RE.


Got to buy a flatscreen somehow.

That fire doesn't seem suspicious to you boys, now does it? Naaah. Freshly up for sale, absolutely DEAD sales, Pronghorn CLOSED their downtown showroom...

Move along, nothing to see here...

IHateToBurstYourBubble said...

Case Schiller ain't through plunging yet...

Home prices plunge in September

By Julie Haviv


NEW YORK (Reuters) – Prices of single-family homes in September plunged a record 17.4 percent from a year earlier, according to the Standard & Poor's/Case-Shiller Home Price Indices issued on Tuesday.

The composite index of 20 metropolitan areas fell 1.8 percent in September from August, S&P said in a statement.

It said its composite index of 10 metropolitan areas declined 1.9 percent in September from August for a 18.6 percent year-over-year drop, also a record.

The U.S. housing market is currently suffering the worst downturn since the Great Depression. A huge supply of unsold homes, tighter lending standards and record foreclosures have pushed down home prices, deflating a bubble from the early part of this decade.

The U.S. economy is considered to be either in or on the brink of a recession, so most economists and experts contend that an end to the downward spiral in house prices is crucial to any recovery.

"House price declines have been at the root of the financial crisis and it appears, as of September, that this decline continued unabated," said Lawrence J. White, professor of economics at New York University's Stern School of Business.

"Until we have some kind of stabilization in the house price sector, we will continue to see problems in the financial sector," he said.

"House prices will probably drop another 10 percent, but I am hopeful that a bottom will be reached in the late spring of 2009," he said.

The rate of home price declines has accelerated on a quarterly basis too.

In the third quarter, the decline in the S&P/Case-Shiller U.S. National Home Price Index -- which covers all nine U.S. census divisions -- remained in double digits, posting a record 16.6 percent decline versus the third quarter of 2007. This has worsened from the annual declines of 15.1 percent and 14.0 percent, reported for the second and first quarters of the year, respectively.

The U.S. National Home Price Index dropped 3.5 percent in the third quarter from the second quarter.

"The turmoil in the financial markets is placing further downward pressure on a housing market already weakened by its own fundamentals," David M. Blitzer, Chairman of the Index Committee at Standard & Poor's, said in a statement.

As of September 2008, the 10-City Composite is down 23.4 percent from its peak, the 20-City Composite is down 21.8 percent and the National Composite is down 21.0 percent.

Phoenix was the weakest market, reporting an annual decline of 31.9 percent, followed by Las Vegas, down 31.3 percent, and San Francisco, which was down 29.5 percent. Miami, Los Angeles, and San Diego did not fair much better with annual declines of 28.4 percent, 27.6 percent and 26.3 percent, respectively.

IHateToBurstYourBubble said...

Central Oregon leads state's growth - but what now?

Posted: Nov 21, 2008 10:45 PM


City planner sees growth flattening amid economy's chill

By Barney Lerten, KTVZ.COM

Central Oregon's growth is still pacing the state, according to new figures released this week - but with the date of focus last July 1, before this fall's major economic downturn, rarely has the distant, rear-view mirror approach of statistics that take months to compile ever been more obvious.

The preliminary estimates from Portland State University's Center for Population Research find that Oregon grew by 45,620 people, or 1.2 percent in the year ended July 1.

But on the High Desert, Deschutes County grew by 6,205 people, or 3.9 percent, to 167,015 residents, to lead the state in year-to-year growth, percentage-wise - a familiar spot over the past decade-plus.

Crook County was second, at 3.7 percent, as it added 960 residents, while Jefferson County was third at 1.9 percent, growing by 420 residents to a population of 22,450.

Bend ranked as Oregon's seventh-largest city, growing by 3,860 residents, or 4.96 percent, to 81,640. Redmond cracked the 25,000 mark, adding 640 residents for an estimate of 25,445, up 2.5 percent.

Other High Desert cities also grew, with Prineville hitting 10,370 (up 1.8 percent), La Pine up 20 residents, to 1,610, Sisters growing to 1,910 residents, Madras reaching 6,640 residents, and relatively little Metolius outpacing them all, percentage-wise, adding 95 residents, or 11 percent, to total 945 people.

It's not just about bragging rights, as population figures are used to divvy up state revenues such as cigarette, liquor and gas taxes, lottery funds and other services, noted Crook County Judge Scott Cooper. (He noted that three of Oregon's 36 counties - Wallowa, Sherman and Grant - were estimated to have lost, not gained population.)

But that was then - 2007-08. What about the coming year?

"I wasn't too surprised for this year, but I would be surprised if we don't see a much, much slower rate of growth next year," said Bend Senior Planner Damian Syrnyk.

Syrnyk noted that the Census Bureau, which comes out with its own figures later, tracks population by changes in the housing stock - how many new units approached or demolished each year.

"I think next year, based on the kind of housing development" - or lack thereof - "we see this year, we'll see very minimal changes in population," he said.

It's always possible that Central Oregon will continue to outpace the rest of the state in growth - at a much smaller number. But it's clear, Syrnyk said, that as the economy slows, growth is likely to as well, as fewer people can afford to move.

And the former Deschutes County planner (and before that, PSU population researcher) also noted that Redmond now enters into new state planning requirements for cities above 25,000 population.

"Welcome to the club," he said.

Cities and counties have until mid-December to appeal the population numbers, if they dispute them, and make their case why they should be different, before the preliminary figures become final.

IHateToBurstYourBubble said...

October jobless rates at 18-year high in area

By Jeff McDonald / The Bulletin


Central Oregon’s employment picture worsened in October as each of the three counties reported their highest jobless numbers for the month in at least 18 years, when the state began tracking the data.

Crook County and Jefferson County posted 10.5 percent and 9.5 percent unemployment rates, respectively, the highest and second-highest rates in the state, according to a monthly regional report released Monday by the Oregon Employment Department.

Those rates, up from 8.4 percent and 8 percent in September, were the highest since 1990.

Deschutes County’s unemployment rate, meanwhile, climbed from 6.7 percent in September to 8.1 percent in October, also at least an 18-year high.

The tri-county’s unemployment rates are not seasonally adjusted.

By comparison, the state’s seasonally adjusted unemployment rate rose from 6.4 percent in September to 7.3 percent in October, while the nation’s seasonally adjusted unemployment rate rose from 6.1 percent in September to 6.5 percent in October.

In Deschutes County, 800 jobs were lost in October, mostly seasonal tourism-related positions. The job losses were 90 fewer than the county typically loses in October, but the number of people looking for work went up 3.2 percentage points, according to Monday’s news release.

Over the last year, the loss of construction jobs has hurt all three counties in Central Oregon, said Jan Swander, a work force analyst for the department.

“We had been slated as being the fastest-growing area, both in population and business growth,” Swander said. “Businesses came in and were created because of the demand and we grew twice as fast as the state in construction. Now that there is a slowdown, we are feeling it.”

In Crook County, which registered historic low unemployment about a year ago, layoffs in the wood-products industry have contributed to higher joblessness.

Among them, Woodgrain Millwork Inc., which manufactures door and window components for the homebuilding industry, laid off 43 workers in August.

“Our current customer base is not purchasing as much today as they did in the middle of the year,” said Benji Barron, general manager of the Fruitland, Idaho-based company’s Prineville plant.

The company peaked at 310 employees in the last year and now employs 255 people, Barron said. That’s an 18 percent reduction.

No more layoffs are planned for the company, which shut down its White City mill near Medford in September 2007 and moved much of the business to Prineville, according to Barron.

Jefferson County also has been hurt by layoffs in every industry, said Mike Ahern, county commissioner and a broker for Coldwell Banker Dick Dodson Realty in Madras.

The county grew too fast during the boom years and now is experiencing a rapid fall, Ahern said.

“The 2005-06 years were not good for anybody,” he said. “Some of this is a shakeout of the exorbitant attitudes that business had about growth. It just shows if you race in to buy, you can pay a price.”

Jeff McDonald can be reached at 541-383-0323 or at jmcdonald@bendbulletin.com.

IHateToBurstYourBubble said...

“The 2005-06 years were not good for anybody,” he said. “Some of this is a shakeout of the exorbitant attitudes that business had about growth. It just shows if you race in to buy, you can pay a price.”

Yeah. Right.

You Realtors did EVERYTHING IN YOUR POWER to stop the Bubble. Fucking LIAR.

Perfect. Fucking Realtr SCUMBAG scolding US with a I TOLD YOU SO load of shit.

Anonymous said...

Crook County and Jefferson County posted 10.5 percent and 9.5 percent unemployment rates, respectively, the highest and second-highest rates in the state, according to a monthly regional report released Monday by the Oregon Employment Department.

*

10% is depression, welcome home boyz, meats back on the table.

IHateToBurstYourBubble said...

You wanna see the OLMIS stats for OCT since 1990, it's here.

3.8% - Oct 2006
4.9% last October
8.1% last Month.

We're fucking dead.

We should rocket to ALL TIME HIGH UNEMPLOYMENT by Feb. You're going to see some truly fucked up shit occur in this town when that happens.

IHateToBurstYourBubble said...

That ARSON RECOVERY PLAN will probably lead to some real kick ass fires downtown.

All sorts of shit is going to start BURNING: You get FULL PRICE OVERNIGHT, you getta make up lies about all the priceless shit you "owned", plus you don't have to pay a Realtor.

GAME THEORY DOMINANT STRATEGY.

Anonymous said...

Jefferson County also has been hurt by layoffs in every industry, said Mike Ahern, county commissioner and a broker for Coldwell Banker Dick Dodson Realty in Madras.

“The 2005-06 years were not good for anybody,” he said.

*

Hell, they got YARROW, ... They got a new prison. Fifty years of inventory up in Jefferson, a realtors dream, commissions for a lifetime.

IHateToBurstYourBubble said...

BUILDEM and BURNEM

I think these builders are onto something here:

Build & Burn is a new growth strategy for COBA!

Best of all, NO ONE HAS TO COMMIT SUICIDE!

This thing is WIN WIN! Good Job COBA!!!

Anonymous said...

On a MORE pleasant note, and I don't know if you KUNTS have been following, ... but the City Manager of Redmond has been arrested, and bailed out by the City Fire Chief.

They had to have the Sheriff's office arrest the city-manager, because the city-manager controls the city police.

DUI's, grabbing women in bars, like our own Eric King, the City Manager of Redmond has gone absolutely insane in the past few months, and nobody could stop him.

Finally people complained to the Oregon State Police, and they had the Sheriff's office arrest him, still given that everyone in Redmond city hall is related by blood, and the fire dept, and police dept. ... What a fucking mess.

It's interesting up in Redmond the city managers oversee's all hiring & firing of the police dept, and thus nobody could take action. In normal rational city's the city-manager is just a bitch that makes sure bills get paid, and the mayor controls the police, or the police chief is elected, but in effect in Redmond the city-manager is the police-commissioner, and has been a very bad boy.

Just another example of what happens when people are given unlimited power and $300k/year, BEND look at Redmond to predict your future.


Thanks Ron Garzini ( Redmond, and USA Bush/Cheney Prison booster ), for setting up Redmond that way it is today, and thanks for bringing the same people and process to JR-BURA, and Bend-OR.

IHateToBurstYourBubble said...

I feel bad for Jay Audia, and the rest that died needlessly. COBA has come up with a Masterstroke of Strategic Brilliance.

Seriously. Audia would be alive today had he just started building furiously & BURNING them down.

Again, KUDOS TO COBA for this masterstroke.

Anonymous said...

The best part about ARSON is that the insurance companys have all declared themselves as Bank-Holding Companys, so nobody cares about paying claims.

It's going to be a gold-rush in this area.

My advice, is for the Eric King to De-Fund the fire-dept ASAP, we don't want to good fire going out cuz its a conflict of interest with COBA/CORA ( OWNERS of CITY-HALL ).

Not in COBA/CORA's interest to even have a functional fire dept.

Anonymous said...

We should rocket to ALL TIME HIGH UNEMPLOYMENT by Feb. You're going to see some truly fucked up shit occur in this town when that happens.

*

Yep, go over to dunc's blog today, I'm betting this will be the last xmas.

Anonymous said...

Fire is NOT new, back in the 80's and 90's down in Palmdale Cali, the HOLLYWOOD bought entire tracks and burnt them to the ground to make moives, ... like Poltergiest, ...

STD's & FIRE is like Coffee & Cookies.

Always been this way.

IHateToBurstYourBubble said...

We're being softened up for a wave of downtown closures:

Central Oregon retailers make early sales push

Posted: Nov 23, 2008 07:10 PM

'Make or break' season is at hand

By Jennifer Burns, KTVZ.COM

Amid a shaky economy, Central Oregon retailers are doing everything they can to keep sales numbers high. And it seems like Sunday is now the new black Friday, after a number of retailers introduced their door-busters and competitive deals.

Small businesses have had a slow year in Central Oregon.

"Sales have been down for us," said Cindy Rito, an Azila Nora employee.

The season to rake in more profits has a bleak outlook.

Chelsea Tyler, owner of Bambini of Bend, said: "This is make it or break it."

Analysts are calling it the worst holiday shopping season in two decades, but local store owners are staying optimistic.

A.J. Cohen, owner of Local Joe, said, "I don't expect to break any records this year, but I think it's going to be okay."

Low sales numbers have led to a list of big box stores filing for bankruptcy. and small businesses shutting their doors.

Tyler said, "It's a shaky time for everyone."

The ones surviving are advertising aggressive pre-Black Friday sales to try to spur consumer demand.

Cohen said, "It's a first for a lot of people, but I think they are scared of having lots of inventory left over, come January."

Tyler said, "We've been doing various sales for about a month now. Everyone wants to take advantage of those dollars."

And Rito said, "I think small boutiques are going to have to have sales to keep up with the economy."

The average retail store makes 30 percent of its yearly revenue from holiday sales.

Rito said, "It's a very large time for her (the owner). We have a lot more customers this time of year."

They are relying on those transactions to keep themselves afloat in the economy, and that's why they're pushing early to meet sales goals.

Tyler said, "In this economy, there's a lot of pressure to be competitive and keep things affordable."

Cutting costs for the consumer could also be tough on the job market.

"We operate on a pretty slim budget, so it cuts into our profits," Tyler said.

Some businesses are cutting jobs and employees' hours to make up for the costs of having these aggressive pre-season sales.

"The hours employees get are less, because she (the owner) has to work more," Rito said.

Cohen said, "I'm in the store a lot more than the last two or three years."

Analysts are predicting another round of retail bankruptcies after the holidays.

Anonymous said...

I want to write something about the Amero, the so called NEW USA/CAN/MEX coin, to me its like so fucking what.

First of all CASH is less than 3% of all money handled today, CASH don't mean shit, everything is electronic.

The real battle being fought today is GLOBAL control of electronic funds clearing. This is why OREO gave Geithner his job as treas-sec, this is Geithners dream, for the FED to control the World Electronic Clearing of all funds transfer.

I think the 'Amero' is an interesting distraction for the Nut-Case Christians of ameriKKKa to all get worked up about you know, end times, and Armageddon.

The good note is that Russia, China, and India will NOT let the US control the worlds money supply.

WWIII is getting very near.

IHateToBurstYourBubble said...

Got any month-end stats Marge? Ain't nut'n gonna lose between now & Monday anyway...

IHateToBurstYourBubble said...

Ain't nut'n gonna close between now & Monday anyway...

IHateToBurstYourBubble said...

Did you see the monolith going in today at the rounabout on 15th and bearcreek? How much did that cost? Hope they have enough money for snow removal, But a monolith is more important than roads and jobs?

Yeah, a glimpse into the minds of madness that is Bend City Council.

Artsy Fartsy Crap, NOT Firemen. We NEED stuff to burn down COMPLETELY in the New COBA Economy.

IHateToBurstYourBubble said...

The good note is that Russia, China, and India will NOT let the US control the worlds money supply.

WWIII is getting very near.


Sounds crazy, but WEALTH = WAR. Always has, always will. Look thru history. The richest, most affluent countries are usually at war 90-95+% of the time with SOMEONE.

China & India's turn next...

Anonymous said...

Yes, HOW FUCKING STUPID would it be for CHINA/INDIA/RUSSIA to let the USA 'print' worthless money, ... ok let's toss the 'print' notion like I have already said, less than 3% of all 'money' is paper.

WWIII will be about WHO controls the 'electronic funds machine'. A virtual world where TRILLIONS are created everyday out of thin air, and NOBODY has a fucking choice, I mean its the fucking 'merchant class' fucking DREAM.

Given that OUR consumer culture is imploding, who fucking cares what's on your debit-card issued by uncle-sam, with your monthly un-emloyment credit.

What is in it for CHINA?? They love GOLD, they want real shit. Now that the USA consumer is fucked, who needs them? NOBODY.

So the USA has now printed some $10TRILLION in the past few months courtesy of Geithner (FED-NY). That's about 200%/yr GDP inflation, should be NO PROBLEM keeping the DOW about 5,000, and the RE around $250k, no matter how fucking much shit deflates.

The real fucking problem is HOW to you HOLD a gun to the worlds HEAD and make them, force them to HOLD and except these worthless and dilluted dollars?? In the past VOLCKER did it with 20%APR, I think we'll see that in 1-2 years, that said, they don't want to go that route, a better route is to simply CONTROL the world electronic money supply, and then inflate as much as they wish, that way their is NO recession from HIGH INT rates like 1980 ( 20%APR ).

Good plans go astray, more interesting also is HOW IN the fuck will OREO create 3M jobs, ameriKKKans don't dig ditches anymore, we're a lazy nation of TV watchers. What in the fuck will these 3M jobs do? COPS??? That my guess we need MORE COPS..... It's easy work, and require's nothing but a gun, and presence.

Sure the INFRASTRUCTURE is falling apart, but that requires MATERIAL, and you can't get material with worthless dollars.

Watch 'terrorism', there will be two currency's terrorist currency, and non-terrorist. You'll be considered a 'terrorist' if you hiding gold, hoarding food or fuel.

Anonymous said...

Homer et-al, pay very close to what TEAM-GARZINI is doing up in Redmond.

The entire city-manager, and city-hall is imploding.

The FBI, Oregon State police, and Deschutes Co Sheriff is going to have to take over.

Remember we talked long about OMERTA, and Deschutes Area being a 'mob town', well now Redmond city-hall has gone drunk with power, and unlimited taxpayer funds.

It's like Rome burning, and Garzini Fiddles in Redmond.

Redmond Leads Bend.

Anonymous said...

Sounds crazy, but WEALTH = WAR. Always has, always will. Look thru history. The richest, most affluent countries are usually at war 90-95+% of the time with SOMEONE.

China & India's turn next...

*

IF china&russia are 'smart', they'll let the USA continue to KILL in the middle east, and destroy their wealth, then Russia & China don't have to spend a fucking dime. Already today China now has Africa, and they got it by our absence. As the USA power implodes the vacuum will be filled.

Nations don't stay rich by spending all their treasure on war, especially given that there is no treasure like 'gold' in return. It's all about middle-east OIL, being kept on the DOLLAR. That said, given that EURO,CHINA,INDIA,RUSSIA is the market, they can dictate the OIL-ELECTRONIC funds should they wish.

The USA at some point has no choice, at the current rate what the US wants is a joke.

Letting the VILLAGE-IDIOT of the world run the world's economy?? Who is going to buy into that other than the ameriKKKan people??

Anonymous said...

Here's why burning to the ground doesn't work, even if it "works".

Insurance only covers the structure, not the land.

If you paid $450k for a STD McMansion the structure may only be insured for 300k. Burn it down and get the settlement and you STILL owe 150k on a lot that is valued at $4.

Burned down, and still $149,996 in the hole.

The Pronghorn lot is probably more in the hole than that.

Anonymous said...

f you paid $450k for a STD McMansion the structure may only be insured for 300k. Burn it down and get the settlement and you STILL owe 150k on a lot that is valued at $4.

*

Nobody 'paid' $150k for the lot, or $450k for the STD, first of all we're talking 'PRONGHORN', 90% PR&MARKETING 10% materials.

So let's say it was $1M for a typical 'lowend' outer perimeter dwelling, remember 'pronghorn' is a series of concentric moats, to protect the 'inner' from the outer riff-raff. This was certainly an outer that burnt to the ground.

Now, note the BUYER paid ZERO down, they bought the Prongy Crap-Shack to see Zero-Down become $1M cash. Zero risk infinite gain.

With the fire, the insurance payout will cover any possible short-sale gain to the bank. The BUYER walks, and says, "I can't afford to rebuild". It's a net-gain, nobody wants to stay there, they all want OUT!!!!!!!!!

Considering exit strategy's other than destroying your credit with jingle-mail, the ARSON strategy is MOST excellent.

Let's take the above hypothetical. The $300k is more than the BANK would have gotten any either way, and the bank don't want NO fucking PRONGY-RE!!!!!

Sure some bitch may have borrowed zero down in 2005 for $500k, but so fucking what, every shit-eating fly in Central-OR was doing the same, with zero down.

Those that had good credit were buying these 'cabins' in Prongy, and those with bad credit in Brasada, and those with shitty credit up towards Madras at the other Brooks' future "MUSTANG RANCHO's" ( Remington Ranch, Yarrow, ... ).

A simple reminder of the times, that most paid nothing down, that almost all outer-perimeter 'investing' @prongy was ALWAYS SPECULATION, and they bet wrong, good news is they lost nothing. With the FIRE the bank gets MORE money back than a short-sale.

EVERYONE IS A WINNER.

Bend is exceptional.

Anonymous said...

"I think the 'Amero' is an interesting distraction for the Nut-Case Christians to get worked up about you know, end times, and Armageddon"

It's also bad economics. Europe has in general had a bad experience with a single currency.

The problem is: you eliminate the ability to do monetary policy by region.

If Hungary needs an economic boost (through lower interest rates), but Germany needs to be cooled down (through higher interest rates), what can a common monetary authority do?

Most economists think that this drawback outweighs any benefit of a common currency (reduced transaction costs across countries).

Small countries that tie their currency to the dollar (e.g., many Asian countries) eliminate any chance of monetary stimulous.

The only thing left is fiscal stimulous.

And that's where we're at in the U.S. today, anyway. Unless you're a fan of letting our economy shrink, which means MILLIONS of lost jobs (unnecessarily, in my mind).

Anonymous said...

Hell today they reported that Jefferson & Crook already have +10% unemployment. So in the defined economic sense the depression is already here.

Spring of 2009, we'll see USA average un-employment of +10%, but given that our 'experts' still are incapable of calling our Recession since May of 2007 a Recession, it will be 2018 before the 2009 Depression is called a depression.

Most businesses I known have been in free fall since May of 2007. Certainly people did what they could do to keep their employees through this xmas, that's almost 18 months, most CPA's have been saying that 2009, would turn-around, so folks dipped into 401k's to keep their retail open, and dipped into cards. Given that the US has created $10 Trillion of FED-PAPER in the past 3-6 months just to prop up the banks, its fairly clear that dumping money is not going to bring a cheery 2009.

For ten long years the US public has had a NEGATIVE saving's rate, first time in history. A period of austerity will come whether people of power want it or not.

Unemployment, and tons of personal consumer debt will cause people to cut back, and the layoff's are coming big time, as orders have plummeted this fall, in a time that is normally the best of the year for manufacturing.

Regarding today's Jefferson & Crook at +10%, so what they got all these people to move there, they both have +30 years of crap-shack inventory. There are NO jobs, other than government jobs, and subsistence ranching. These places will revert to what they have always been.

Here in BEND, most retirees who moved here post 1998 to retire, and having already lost 1/2 their nest on stocks, are now sitting pretty on their BOND's, soon the bond's will plummet, and almost all of Bend's new retirees will be BROKE. Then ton's of oldsters will be looking for jobs at Trader-Joes.

We brought 50k hungry mouths to the Bend area in the last ten years, and there are no jobs or food for them.

Merry Xmas.

Enjoy your turkey, there may not be one next xgiv.

Anonymous said...

It's also bad economics. Europe has in general had a bad experience with a single currency.

[ EURO is more complex, before you had people in Greece refusing Turkish LIRA, today you have French refusing US dollars. In a world collapse 'forcing' one currency avoids the classic good/bad money problem, when there is only ONE MONEY, they got you by the balls. This is why the ONE-WORLD-GOVERNMENT (HRC,KISSINGER,...) crowd yearns for one 'currency' ]

The problem is: you eliminate the ability to do monetary policy by region.

[ Brussles can give each 'country' paper just like the FED gives it to Citi ]

If Hungary needs an economic boost (through lower interest rates), but Germany needs to be cooled down (through higher interest rates), what can a common monetary authority do?

[ Same, Brussels can issue paper to any country they wish, its the lever of power, just like the FED wields here in ameriKKKa. ]


Most economists think that this drawback outweighs any benefit of a common currency (reduced transaction costs across countries).


[ We need to get away from the notion of 'currency', and focus on FRN DEBIT/CREDIT's, there is no currency. Just electronic debits/credits. The FED (Geithner) wants to control the world, you do so by dividing electronic clearing into two camps: Terrorists, and non-Terrorists. You can guess which one the US is-is. If CHINA/RUSSIA are smart they'll get with the program. ]


Small countries that tie their currency to the dollar (e.g., many Asian countries) eliminate any chance of monetary stimulous.

[ Most 'small' asian country's are like Singapore, just new city's most are like Japan, just post WWII US colony's. They're so new who knows if they'll survive, what we do know is since WWII they have blossomed, and not needed stimulus. Well except JAPAN which did what we told it do in the 1980's and created a MOFU bubble. But, again JAPAN is a US military colony, they were simply doing what they were told. South Korea is a US MIL Colony, Panama, Iraq, ...]

The only thing left is fiscal stimulous.

[ "The only thing left is 'printing'..." This is why ALL western civilizations in the last 2,000 years COLLAPSE. Read Oswald Sprenglers "Decline of the West" from 1918, two volumes on every fucking 'mercantile economy' since the times of ROME. BITCHES & KUNTS always say 'keep printing', then one morning, the farmers quit accepting the paper for GRAIN, then the next day, its GAME-OVER.

The NUMBER-ONE issue for the US government today, for NATIONAL SECURITY, is HOW DO THEY KEEP FORCING THE WORLD TO ACCEPT DILUTED US DOLLARS??? The INVASION of IRAQ was only because Saddam was going to peg his OIL to NON-US Dollars.

The US control of WORLD narcotics is only so that the NARCO world MUST use US-Dollars for trade. Take OIL&DRUGS off the DOLLAR, and NOBODY world-wide would accept the dollar.

]

And that's where we're at in the U.S. today, anyway. Unless you're a fan of letting our economy shrink, which means MILLIONS of lost jobs (unnecessarily, in my mind).

[ Millions of jobs have already been lost. Obama promises 3M in his first six months, let's see, besides COP's I don't see what they'll do, its not like the CCC days, these people don't dig ditches anymore. Given that printing $4Trillion a month by the FED doesn't even raise an eye-brow anymore and in secret yet, my guess is they'll just print the money and send out everybody checks, it will be un-employment for all. ]

....

Stimulus is fine, ... but eventually its the OLD problem, BUSH was a lying asshole, and so will be the OREO. BUT eventually the people WHO make the food, will not accept the worthless paper, this is been the downfall of all western-mercantile society's forever.

I can only see one mode of survival for the FRN ( fed res note aka dollar ), and that is that the entire world goes on a FRN global electronic exchange, and they have NO choice, that all commerce is such, of course all that would happen is ALL the good shit would go black-market ( gold, ... trade ), ... The essential issue is that we're witnessing HISTORY, and ALL 'stimulus' history is such that either farmers quit deliverying food or hyper-inflation makes paper money a joke.

Given that the FUTURE will be OBAMA debit cards for all, folks will not have to carry wheel barrels of paper, they'll have to have price-controls then farmers will simply keep the good stuff for themselves.

Anonymous said...

The following is HOT from EUROPE. THE US T-BOND is NOW JUNK. THE US BOND MARKET IS THE NEXT to FALL.

This is interesting, because most of the BEND retiree's I know, don't mind having lost 1/2 their net-worth on stock, cuz bonds held, but NOW the Bonds have NO market, they're the next to un-wind, but there are NO FUCKING BUYERS.

***

The problem: the settlement system for the US government bond market has broken down

THE US TREASURY market, the foundation of government bond and corporate bond markets worldwide, is suffering a crisis of confidence at the worst possible moment. Investors in treasuries are the lenders enabling the US government bail-out of the country’s broken financial institutions. That leaves them financing purchases of equity of volatile and highly questionable worth and backing a ragbag of distressed assets. For now, treasury yields are at record lows across the term structure as investors with cash to invest conclude that they can trust no one else with their money. But investors must wonder at what point the expanded supply of government debt and its use will make the borrower inherently less creditworthy.

There is an even more pressing concern for many participants in this increasingly swollen market: the settlement system has broken down. Following the collapse of Lehman Brothers in September, fails to deliver among the 17 primary dealers in the US treasury market have rocketed to more than $2 trillion over a period of weeks and still lie above $1.3 trillion. Broker/dealers have stopped delivering bonds. Holders of US treasuries are now scared to lend into the repo market in case their bonds are not returned, and potential buyers sit on the sidelines fearful of handing over their money to a counterparty that at best might not deliver a bond on time, and at worst might go under.

With global stock markets plummeting, investors are still turning to treasuries as a safe haven. But investors might become nervous if something is not done soon to sort out the market’s problems. “As yet investors are still coming in, but in the longer term the worry is the lack of functionality in the treasury market. That could impact investor perception on a longer-term basis,” says Mike Pond, US treasury and inflation-linked strategist at Barclays Capital in New York. If investors turn their back on treasuries, the US government will find it increasingly difficult and expensive to raise money and roll over its maturing debts. Upward pressure on interest rates will occur at a time when the government needs to be loosening monetary policy in order to jump-start a domestic economy that is heading towards a depression.

As a result of fails to deliver, the most transparently priced instrument available now has investors scratching their heads. The natural balance of supply and demand has been altered and the true price of treasuries has become obscured. The effects are being seen across other bond markets. “The TIPS (Treasury Inflation Protected Securities) market is also clearly broken,” says Pond. “An obvious trade right now would be to go long TIPS where real yields are high and short the nominal bond in a breakeven inflation trade but hedge funds are fearful that if they go through the repo market the borrow could fail. So we have a situation now in the 10-year TIPS where the market is pricing in zero or negative average inflation for the next 10 years. Inflation has not been that low since the 1930s.” Economists also claim that fails have spread across to other bond markets such as municipals, agencies, mortgage-backed and corporate bonds.

Why the Federal Reserve is not urgently considering regulation is bewildering. As yet, the US Treasury has merely asked for market participants to sort out the situation themselves. That might help reduce fails but it will not eliminate them, and in panic periods they will simply creep back up. The global economy has significantly contracted since the collapse of Lehman Brothers, which spurred the fails to deliver. More market-shocking events are certain to lie ahead. The solution is simple – delivery needs to be enforced, and liquidity returned. If not, confidence in the US treasury markets will be lost. Loans made using treasuries as collateral will be reconsidered, bond markets priced off treasuries will further dry up and, with equity markets so volatile, central banks and investors will not know where to turn.

Fails to deliver in the treasury markets are not a new phenomenon. There is data for fails for treasuries, agencies and mortgage-backed securities as far back as 1990, says Suzanne Trimbath, an economist, and former employee of the Depository Trust Co, a subsidiary of Depository Trust and Clearing Corp.

Back then, though, there would be $50 billion of fails in a whole year, she says. That figure has grown enormously. Failures in US treasuries were 8.6% of all treasuries outstanding in the first five months of this year, compared with 1.2% in the first five months of 2007. That has ballooned further over the past three months, hitting more than $2 trillion for almost the entire month of October – more than 20% of the daily treasuries trading volume.

What the treasuries market faces now, at this critical moment, is the consequence of long neglect of some murky aspects of short-term tactical trading in government bonds.

Anonymous said...

BP and others who have been following the SECRET +2Trillion that Geithner(treas-elect) has secretly spent, Bloomberg finally got the raw data, and here is the story. Fucking way more bleak than the shit I write about. Amazing amount of FRN's being pushed into the system - Homer's Hyper-Inflation very soon!!!!!


U.S. Pledges Top $7.7 Trillion to Ease Frozen Credit (Update2)

By Mark Pittman and Bob Ivry

Nov. 24 (Bloomberg) -- The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.

The unprecedented pledge of funds includes $3.18 trillion already tapped by financial institutions in the biggest response to an economic emergency since the New Deal of the 1930s, according to data compiled by Bloomberg. The commitment dwarfs the plan approved by lawmakers, the Treasury Department’s $700 billion Troubled Asset Relief Program. Federal Reserve lending last week was 1,900 times the weekly average for the three years before the crisis.

When Congress approved the TARP on Oct. 3, Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson acknowledged the need for transparency and oversight. Now, as regulators commit far more money while refusing to disclose loan recipients or reveal the collateral they are taking in return, some Congress members are calling for the Fed to be reined in.

“Whether it’s lending or spending, it’s tax dollars that are going out the window and we end up holding collateral we don’t know anything about,” said Congressman Scott Garrett, a New Jersey Republican who serves on the House Financial Services Committee. “The time has come that we consider what sort of limitations we should be placing on the Fed so that authority returns to elected officials as opposed to appointed ones.”

Too Big to Fail

Bloomberg News tabulated data from the Fed, Treasury and Federal Deposit Insurance Corp. and interviewed regulatory officials, economists and academic researchers to gauge the full extent of the government’s rescue effort.

The bailout includes a Fed program to buy as much as $2.4 trillion in short-term notes, called commercial paper, that companies use to pay bills, begun Oct. 27, and $1.4 trillion from the FDIC to guarantee bank-to-bank loans, started Oct. 14.

William Poole, former president of the Federal Reserve Bank of St. Louis, said the two programs are unlikely to lose money. The bigger risk comes from rescuing companies perceived as “too big to fail,” he said.

‘Credit Risk’

The government committed $29 billion to help engineer the takeover in March of Bear Stearns Cos. by New York-based JPMorgan Chase & Co. and $122.8 billion in addition to TARP allocations to bail out New York-based American International Group Inc., once the world’s largest insurer.

Citigroup received $306 billion of government guarantees for troubled mortgages and toxic assets. The Treasury Department also will inject $20 billion into the bank after its stock fell 60 percent last week.

“No question there is some credit risk there,” Poole said.

Congressman Darrell Issa, a California Republican on the Oversight and Government Reform Committee, said risk is lurking in the programs that Poole thinks are safe.

“The thing that people don’t understand is it’s not how likely that the exposure becomes a reality, but what if it does?” Issa said. “There’s no transparency to it so who’s to say they’re right?”

The worst financial crisis in two generations has erased $23 trillion, or 38 percent, of the value of the world’s companies and brought down three of the biggest Wall Street firms.

Markets Down

The Dow Jones Industrial Average through Friday is down 38 percent since the beginning of the year and 43 percent from its peak on Oct. 9, 2007. The S&P 500 fell 45 percent from the beginning of the year through Friday and 49 percent from its peak on Oct. 9, 2007. The Nikkei 225 Index has fallen 46 percent from the beginning of the year through Friday and 57 percent from its most recent peak of 18,261.98 on July 9, 2007. Goldman Sachs Group Inc. is down 78 percent, to $53.31, on Friday from its peak of $247.92 on Oct. 31, 2007, and 75 percent this year.

Regulators hope the rescue will contain the damage and keep banks providing the credit that is the lifeblood of the U.S. economy.

Most of the spending programs are run out of the New York Fed, whose president, Timothy Geithner, is said to be President- elect Barack Obama’s choice to be Treasury Secretary.

‘They Got Snookered’

The money that’s been pledged is equivalent to $24,000 for every man, woman and child in the country. It’s nine times what the U.S. has spent so far on wars in Iraq and Afghanistan, according to Congressional Budget Office figures. It could pay off more than half the country’s mortgages.

“It’s unprecedented,” said Bob Eisenbeis, chief monetary economist at Vineland, New Jersey-based Cumberland Advisors Inc. and an economist for the Atlanta Fed for 10 years until January. “The backlash has begun already. Congress is taking a lot of hits from their constituents because they got snookered on the TARP big time. There’s a lot of supposedly smart people who look to be totally incompetent and it’s all going to fall on the taxpayer.”

President Franklin D. Roosevelt’s New Deal of the 1930s, when almost 10,000 banks failed and there was no mechanism to bolster them with cash, is the only rival to the government’s current response. The savings and loan bailout of the 1990s cost $209.5 billion in inflation-adjusted numbers, of which $173 billion came from taxpayers, according to a July 1996 report by the U.S. General Accounting Office, now called the Government Accountability Office.

‘Worst Crisis’

The 1979 U.S. government bailout of Chrysler consisted of bond guarantees, adjusted for inflation, of $4.2 billion, according to a Heritage Foundation report.

The commitment of public money is appropriate to the peril, said Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. and a former economist at the New York Fed. U.S. financial firms have taken writedowns and losses of $666.1 billion since the beginning of 2007, according to Bloomberg data.

“This is the worst capital markets crisis in modern history,” Harris said. “So you have the biggest intervention in modern history.”

Bloomberg has requested details of Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit against the central bank Nov. 7 seeking to force disclosure of borrower banks and their collateral.

Collateral is an asset pledged to a lender in the event a loan payment isn’t made.

‘That’s Counterproductive’

“Some have asked us to reveal the names of the banks that are borrowing, how much they are borrowing, what collateral they are posting,” Bernanke said Nov. 18 to the House Financial Services Committee. “We think that’s counterproductive.”

The Fed should account for the collateral it takes in exchange for loans to banks, said Paul Kasriel, chief economist at Chicago-based Northern Trust Corp. and a former research economist at the Federal Reserve Bank of Chicago.

“There is a lack of transparency here and, given that the Fed is taking on a huge amount of credit risk now, it would seem to me as a taxpayer there should be more transparency,” Kasriel said.

Bernanke’s Fed is responsible for $4.74 trillion of pledges, or 61 percent of the total commitment of $7.76 trillion, based on data compiled by Bloomberg concerning U.S. bailout steps started a year ago.

“Too often the public is focused on the wrong piece of that number, the $700 billion that Congress approved,” said J.D. Foster, a former staff member of the Council of Economic Advisers who is now a senior fellow at the Heritage Foundation in Washington. “The other areas are quite a bit larger.”

Fed Rescue Efforts

The Fed’s rescue attempts began last December with the creation of the Term Auction Facility to allow lending to dealers for collateral. After Bear Stearns’s collapse in March, the central bank started making direct loans to securities firms at the same discount rate it charges commercial banks, which take customer deposits.

In the three years before the crisis, such average weekly borrowing by banks was $48 million, according to the central bank. Last week it was $91.5 billion.

The failure of a second securities firm, Lehman Brothers Holdings Inc., in September, led to the creation of the Commercial Paper Funding Facility and the Money Market Investor Funding Facility, or MMIFF. The two programs, which have pledged $2.3 trillion, are designed to restore calm in the money markets, which deal in certificates of deposit, commercial paper and Treasury bills.

Lehman Failure

“Money markets seized up after Lehman failed,” said Neal Soss, chief economist at Credit Suisse Group in New York and a former aide to Fed chief Paul Volcker. “Lehman failing made a lot of subsequent actions necessary.”

The FDIC, chaired by Sheila Bair, is contributing 20 percent of total rescue commitments. The FDIC’s $1.4 trillion in guarantees will amount to a bank subsidy of as much as $54 billion over three years, or $18 billion a year, because borrowers will pay a lower interest rate than they would on the open market, according to Raghu Sundurum and Viral Acharya of New York University and the London Business School.

Congress and the Treasury have ponied up $892 billion in TARP and other funding, or 11.5 percent.

The Federal Housing Administration, overseen by Department of Housing and Urban Development Secretary Steven Preston, was given the authority to guarantee $300 billion of mortgages, or about 4 percent of the total commitment, with its Hope for Homeowners program, designed to keep distressed borrowers from foreclosure.

Federal Guarantees

Most of the federal guarantees reduce interest rates on loans to banks and securities firms, which would create a subsidy of at least $6.6 billion annually for the financial industry, according to data compiled by Bloomberg comparing rates charged by the Fed against market interest currently paid by banks.

Not included in the calculation of pledged funds is an FDIC proposal to prevent foreclosures by guaranteeing modifications on $444 billion in mortgages at an expected cost of $24.4 billion to be paid from the TARP, according to FDIC spokesman David Barr. The Treasury Department hasn’t approved the program.

Bernanke and Paulson, former chief executive officer of Goldman Sachs, have also promised as much as $200 billion to shore up nationalized mortgage finance companies Fannie Mae and Freddie Mac, a pledge that hasn’t been allocated to any agency. The FDIC arranged for $139 billion in loan guarantees for General Electric Co.’s finance unit.

Automakers Struggle

The tally doesn’t include money to General Motors Corp., Ford Motor Co. and Chrysler LLC. Obama has said he favors financial assistance to keep them from collapse.

Paulson told the House Financial Services Committee Nov. 18 that the $250 billion already allocated to banks through the TARP is an investment, not an expenditure.

“I think it would be extraordinarily unusual if the government did not get that money back and more,” Paulson said.

In his Nov. 18 testimony, Bernanke told the House Financial Services Committee that the central bank wouldn’t lose money.

“We take collateral, we haircut it, it is a short-term loan, it is very safe, we have never lost a penny in these various lending programs,” he said.

A haircut refers to the practice of lending less money than the collateral’s current market value.

Requiring the Fed to disclose loan recipients might set off panic, said David Tobin, principal of New York-based loan-sale consultants and investment bank Mission Capital Advisors LLC.

‘Mark to Market’

“If you mark to market today, the banking system is bankrupt,” Tobin said. “So what do you do? You try to keep it going as best you can.”

“Mark to market” means adjusting the value of an asset, such as a mortgage-backed security, to reflect current prices.

Some of the bailout assistance could come from tax breaks in the future. The Treasury Department changed the tax code on Sept. 30 to allow banks to expand the deductions on the losses banks they were buying, according to Robert Willens, a former Lehman Brothers tax and accounting analyst who teaches at Columbia University Business School in New York.

Wells Fargo & Co., which is buying Charlotte, North Carolina-based Wachovia Corp., will be able to deduct $22 billion, Willens said. Adding in other banks, the code change will cost $29 billion, he said.

“The rule is now popularly known among tax lawyers as the ‘Wells Fargo Notice,’” Willens said.

The regulation was changed to make it easier for healthy banks to buy troubled ones, said Treasury Department spokesman Andrew DeSouza.

House Financial Services Committee Chairman Barney Frank said he was angry that banks used the money for acquisitions.

“The only purpose for this money is to lend,” said Frank, a Massachusetts Democrat. “It’s not for dividends, it’s not for purchases of new banks, it’s not for bonuses. There better be a showing of increased lending roughly in the amount of the capital infusions” or Congress may not approve the second half of the TARP money.

Anonymous said...

BP, you'll love this ..

[ Note the $2T didn't go to lending, the banks used it all to buy other banks! So much for Mr. Stimulus here and good intentions, as always money is used to for personal gain, and we all known the BIGGER you are the MORE you'll be saved, and thus right now ALL the money is being used on taxpayer credit to BUY as many banks as you can to grow as quick as you can!!!!!
]

House Financial Services Committee Chairman Barney Frank said he was angry that banks used the money for acquisitions.

“The only purpose for this money is to lend,” said Frank, a Massachusetts Democrat. “It’s not for dividends, it’s not for purchases of new banks, it’s not for bonuses. There better be a showing of increased lending roughly in the amount of the capital infusions” or Congress may not approve the second half of the TARP money.

Anonymous said...

‘Mark to Market’

“If you mark to market today, the banking system is bankrupt,” Tobin said. “So what do you do? You try to keep it going as best you can.”

“Mark to market” means adjusting the value of an asset, such as a mortgage-backed security, to reflect current prices.


*

YEP, the WHOLE FUCKING RACKET IS BK.

Let's NOT forget KUNTS that Geithner is the guy handing out the candy, and we're going to be stuck with him for generations.

Anonymous said...

The OREO's Boyz are going to make the BUSH-CHENEY theft look like a child's game.

Anonymous said...

Regulators hope the rescue will contain the damage and keep banks providing the credit that is the lifeblood of the U.S. economy.

Most of the spending programs are run out of the New York Fed, whose president, Timothy Geithner, is said to be President- elect Barack Obama’s choice to be Treasury Secretary.

‘They Got Snookered’

*

Who would have guessed??

Anonymous said...

"THE US TREASURY market, the foundation of government bond and corporate bond markets worldwide, is suffering a crisis of confidence at the worst possible moment."

Interesting developments...

The T-bill markets have always been strange, however. Even 2 years ago people were asking why on earth foreign investors (like the Chinese government) would be holding on to unprofitable T-bills.

I think it has to do more with politics: Chinese authorities do this to keep the Chinese won cheap, to keep Chinese manufacturers busy, and to keep the exports flowing to America.

These markets have never made a lot of sense -- but now the bell tolls for "T".

tim said...

>>“The only purpose for this money is to lend,” said Frank, a Massachusetts Democrat. “It’s not for dividends, it’s not for purchases of new banks, it’s not for bonuses. There better be a showing of increased lending roughly in the amount of the capital infusions” or Congress may not approve the second half of the TARP money.

But isn't the reason the banks won't lend because their balance sheets are so appalling. Telling them to lend without fixing their balance sheets is ridiculous. The gov't itself may as well become the lender if they won't let the banks improve their situation.

Anonymous said...

Korea is 'won'

China is 'yuan'

Everybody is Asia today is asking for one thing,

"GET ME THE FUCK OUT OF TOXIC US"

Anonymous said...

Apu,

Barney has a point, they were given the money to loan, not use the 'new collateral' to borrow other toxic assets so they can grow.

What they have done is say 'hey, I got money and you don't, so I'm going to use the money to buy you, your fucked, and once I'm bigger, the LUV-GUV will give me even MORE MONEY, cuz if I'm too big to fail, I'll even get fatter by default.'

NO APU, this is really rotten to the core.

Marge said...

Stats
Deschutes County, all types of residential MTD:
Nov 80 91 Sold @ $250 median
Nov 07 149 Sold @ $300k median

Bend SFH only MTD:
Nov 08 53 Sold @ $269k median
Oct 08 96 Sold @ $299k median
Nov 07 69 sold @ $350k median

Any questions?

tim said...

>>NO APU, this is really rotten to the core.

I'm not saying it's not rotten. I'm just saying maybe the Congress was foolish to let Paulson sling money around like that in the first place. You give money to a bank, that doesn't mean it's going to loan it. Why would they? Loaning is the very last thing it's smart to do now.

You want the bank to loan, you better fill up all the branches with National Guard and make the officers loan.

tim said...

>>Any questions?

What kind of cheap alcohol are the Realtors favoring this month?

Anonymous said...

But isn't the reason the banks won't lend because their balance sheets are so appalling.

*

There are many reasons banks will not lend, but the entire reason in this case they were given the money was to lend. So its besides the point.

The reason the 'balance sheet' is dismal is that the collateral is worthless.

The un-winding, that is selling all worthless assets for cash will take years.

It's fairly obvious that even still this late in the game there is NO REGULATION, e.g. the banks can borrow $8TRILLION dollars at the back-door of the FED-RES or for that matter anybody who calls themselves a 'bank holding company', and once you get the money you can do whatever you want.

I agree if the GOVERNMENT wanted people to get this money, the government should have a federal agency that gets this back-door money and loans it those in need, that said BofA or US-Bank will loan me all the money I need right now for 3.5%, I don't understand the big deal.

It's only a big deal if your credit is fucked, sadly that is the problem for +90% of the people.

Marge said...

Mad Dog 20/20 or Annie Green Springs :)

Anonymous said...

Barney Frank is the banking committee, when he ask's these rhetorical questions he of course is talking out of his ass.

He got the banking congress over-sight by not providing over-sight, and then he gives them the bail-out and says bad-bank, why are you buying your sick brothers with the cash we gave you???

I mean if this were organized crime, and all the drug dealers were dropping dead, would it surprise you that the surviving drug dealers would BUY turf & PRODUCT rather than handing out the drugs for free to users.

I love the quotes above, but essentially what Barney Frand is saying is ... "who would have guessed that if we gave them money, they would have used to for the highest possible ROI", I mean holy fucking shit, if Barney is almost 10% telling the truth then what he is saying is that we want you to lose money.

Think about this folks.

yes, APU its all rotten, but once you go down this road of throwing ten trillion per quarter out to the wolves, what does one really expect?? Other than hyper-inflation.

Anonymous said...

Mad Dog 20/20 or Annie Green Springs :)



*

Marge I thought you were a jack-daniels girl??

Anonymous said...

I love the quotes above, but essentially what Barney Frand is saying is ... "who would have guessed that if we gave them money, they would have used to for the highest possible ROI", I mean holy fucking shit, if Barney is almost 10% telling the truth then what he is saying is that we want you to lose money.

Think about this folks.

*

Like the Russians and Europeans are saying right now about the USA, the Treasury is being ran by insane lunatics.

How long do you KUNTS really think the Asians and Europeans are going to keep their fucking money here??

I think its going be 99% SELL and 1% BUY on future US-TREASURY auctions, its going to get to the point that Bernanke is going to be the only buyer of US-Treasury's. They're going to have to have a saving's-Bond, and force US citizens to buy this shit, that's how they got through WWII, because even back then there were BROKE.

Trouble is today the US citizens don't have the ability to save, or buy saving's bonds, but they'll be mandatory.

But like the quote today every man,women, and child in the US has had $24k spent in their name, that's more than the avg salary if you avg with the children, it would take ten years of savings just to recoup what they have blown this quarter.

tim said...

Check this out. This is with inflation-adjusted numbers.

http://www.boingboing.net/2008/11/25/bailout-costs-more-t.html

I really don't think people understand the scale of the minefield we wondered into the last year or so (or decade or so).

Anonymous said...

"What kind of cheap alcohol are the Realtors favoring this month?"

Hood river vodka?

Anonymous said...

>Deschutes County, all types of residential MTD:
Nov 08 91 Sold @ $250 median
Nov 07 149 Sold @ $300k median

NODs Deschutes County:
Nov 08 (as of 11/24): 140
Nov 07: 80

Any bets on what month we hit double the NODs as sales? I'm going to go in for Feb.

Marge said...

>>>>Marge I thought you were a jack-daniels girl??

Iam, but I can still afford to buy it or grab a bottle from the pantry. You forget, I personally did not buy into the bubble, I haven't lost much money in stocks and I believe Cash is King, until the market finds the real bottom I'll stick with my CD's and stay out of any debt. Funnny, I learned from my parents, why didn't the rest of the boomers?

tim said...

Marge,

Pretty sure that being a boomer was all about studiously NOT learning from our parents.

tim said...

Wrong ideas...

http://www.alternet.org/workplace/108539/obama's_treasury_pick_has_all_the_wrong_ideas/?page=entire

Marge said...

Guess I must have been different! On par for me though, as my sister spends her ass off and has a hocked to the hilt $900k house near Rancho Santa Fe and drives a new M3 also had all that plastic surgeons offer.

Anonymous said...

Very good background info here, like directors are walking away from fortune 500's, ... Everybody is afraid of getting sued, insurance for US-Treasury Bond is going astro, The world things the USA will default on the US-Treasury Note.

***

Unstoppable Economic Meltdown

By Stephen Lendman

25 November, 2008


Crisis denialists are still around but are slowly and grudgingly giving way to the reality that global capitalism is in serious crisis as recession lurches toward depression in a continuing downward spiral.

Nearly every new data release confirm it. On November 19, housing starts and permits hit record lows, according to the Commerce Department. At an annual 791,000 rate last month, they were the lowest they've been since number tracking began in 1959 and are down 4.5% from a revised 828,000 September reading.

Building permits were also worrisome at an annual 708,000 rate (down from 805,000 in September), breaking the previous 709,000 March 1975 low figure.

With supply way exceeding demand and prices in near free fall, no end of this is in sight for an industry perhaps facing its most challenging environment ever. The National Association of Home Builders (NAHB)/Wells Fargo November housing market index shows why. It fell to a seasonally adjusted 9 reading - its lowest recorded level since the index first began in 1985 and below its October reading of 14. Any number below 50 indicates contraction.

In addition, the Mortgage Bankers Association's (MBA) weekly purchase loan index fell 12.6% in the week ending November 14. At 248.50, it's at its lowest loan applications level since December 2000. This signals weak future home demand at a time when it's woefully weak and declining.

There was more bad news on November 20 as well as weekly initial jobless claims keep rising. This time by a higher than expected 27,000 to 542,000 in the week ending November 15 - the highest level since July 1992. The four-week average is its highest since January 1983 as employment keeps deteriorating at an increasing pace.

It's no surprise that the October 28 and 29 Fed Open Market Committee minutes showed the sharpest meeting-to-meeting sentiment drop in memory, according to one of its former governors, Lyle Gramley. It now predicts that the economy will contract for a year or longer and "agreed that the downside risks to growth had increased." Back in August, the Fed left interest rates unchanged at 2%, foresaw continued but lower growth, and said: "Although downside risks to growth remain, the upside risks to inflation are also of significant concern to the Committee."

Currently, the Philadelphia Fed's survey predicts that GDP will shrink by 2.9% in Q 4, a sharp downgrade from its last 0.7% growth prediction. It added that the economy entered recession in April. It will last at least 14 months and will be one of the longest ones since the 1930s. Its latest survey of manufacturing conditions decreased from -37.5 in October to -39.3 currently. It's now at its lowest point since October 1990 and falling. Its employment index also fell to -25.2.

Another distressing sign is the growing number of unsold goods in Long Beach, one of the nation's most active commercial ports. On November 18, The New York Times called them "A Sea of Unwanted Imports" and a reflection of growing inventory levels - up 5.5% in September from a year earlier and rising.

Long Beach accounts for about 20% of the country's container imports. It's second only to Los Angeles, and its volume is down 10% from last year. It's "where imported products arrive and filter through the tributary of trucks, trains and retailers into the hands of consumers. But now, products are just sitting" and turning the port into a parking lot. Nearly all other major ports are in similar decline as the current crisis worsens.

Veteran Long Beach port workers say the slowdown is like nothing they've ever seen. It's affecting other businesses and workers, and it's got them all worried. US consumers, too, and in the words of one reflecting the many: "I'm saving money, paying bills (and) hunkering down." It shows in declining retail sales.

The Architecture Billings Index (ABI) indicates future construction activity. In October, it hit an all-time low since the survey began in 1995. It's at 36.2, down significantly from 41.4 in September. Any number below 50 indicates contraction. In addition, new project inquiries were at 39.9, another record low.

Many other indicators are as bleak and show the economy in free fall, taking most others down with it. Clearly the verdict is in. At the least, it's the worst economic crisis since the 1930s. At worst, it may be far greater that only the fullness of time will reveal.

Bellweather Canaries in the Coal Mine

Once a bellweather corporate icon and virtual proxy for the S & P 500, General Electric has fallen on hard times. In September 2000, its stock price traded at around $60 a share. On November 20, it fell to $12.84 for a net eight year loss of nearly 79%. Back in April, when the company badly missed its earnings target, the stock lost $47 billion in market value that day, and The Economist remarked that "This is not what investors expect from one of the few remaining triple-A rated companies, famed for hitting its targets." Analyst Bob Chapman believes only gold deserves that rating at a time when no asset class is safe.

CreditGuru.com defines a AAA credit rating as follows:

"Bonds rated AAA are of the highest credit quality, with exceptionally strong protection for the timely repayment of principal and interest. Earnings are considered stable, the structure of (its) industry is strong, and the outlook for future profitability is favorable. There are few qualifying factors present which would detract from the performance of the entity, the strength of liquidity and coverage ratios (are) unquestioned and the entity has established a creditable track record of superior performance. Few entities (warrant) a AAA rating."

Why? Because of practices like these:

-- living excessively off credit;

-- an uncertainty of future earnings;

-- playing fast and loose with accounting policies;

-- lying to investors;

-- diluting the market with recapitalizations; and

-- having a history of these practices.

Government fiscal irresponsibility is no different than for businesses. As a result, America's credit worthiness is at risk.

In the late 1970s, 58 companies were rated AAA. In the 1990s, it was 22, and in 2001 nine.

Today, according to 247wallst.com, GE is one of only six corporations rated AAA by S & P (along with ExxonMobil, J & J, Toyota, Berkshire Hathaway, and ADP) but it's status is clearly jeopardized in the view of some analysts. One puts it this way:

"The legendary American institution is in deep trouble. Its PR machine has been in constant spin mode as the company sinks deeper into despair." Its "AAA rating is not worth the paper it is written on. One look at GE's balance sheet will convince you....AAA companies do not need to take the desperate actions that GE has taken in the last few months."

The first signs of real trouble appeared in April when the company missed its target. "It is widely known that they are masters of 'legal' earnings manipulation," so it came as a shock. "Accounting rules allow for wide discretion in reserves and estimates. GE Capital has always been a black box within the larger company," and the management used this division "as its backstop for meeting earnings estimates." It failed, and it's slide has been precipitous enough for the company to need Warren Buffett to invest $3 billion as a psychological boost and have to pay him a 10% dividend and other incentives to get it.

"Credit default swaps (CDSs) protecting against GE Capital default now trade as if GE is a junk bond credit." And issuing $12 billion in new common stock (at $22.25 a share) was "an act of extreme desperation and brings into question whether GE has a lucid strategy."

Its divisions face problems across the board but especially GE Capital, its largest with three subdivisions - GE Commercial Finance, GE Money, and GE Consumer Finance. The company "is a bank disguised as an industrial conglomerate." In boom times, it did wonders for its profits. Today it's "a rocky path to destruction," and as GE goes, so goes the S & P 500 perhaps and the economy along with it.

Market analyst Robert Prechter calls GE a "bellweather for a global bear market," and when the August 1982 - January 2000 longest ever bull market ended, he said "GE is going to go way down (and it) probably heralds stormy weather ahead for the market as a whole; or should we say 'hole?' " Prechter maintains that view today as GE's valuation keeps falling at a time when it just secured government insurance for $139 billion of GE Capital debt. If the company was strong, it wouldn't need it. Getting it is a sign of real weakness.

A condition also affecting Citigroup that's teetering on the brink of failing. No longer the nation's largest bank, it, too, has fallen on hard times and its stock price reflects it. At $3.77 a share on November 20, it's down around 94% from its closing high and now trades at 15-year lows. Clearly the company is in very big trouble. So are other major banks. They're all effectively insolvent and are only kept operating with billions in government aid and plenty more if needed under Paulson's no banker left behind scheme. At least none anointed too big to fail.

Perhaps in Citi's case, it's too big to save. It has $2 trillion in assets, a $37 trillion (notional value) derivatives portfolio (including $3.6 trillion in credit default swaps), $202 billion in troubled residential mortgages, huge numbers of shaky auto loans, and unknown amounts of other dead weight that may in the end sink the company. One analyst calls Citi insolvent and says its problems are double those of AIG. It plans 52,000 job cuts (14% of its workforce) on top of 25,000 previously announced and more to come as the company furiously restructures to survive.

On November 21, the Wall Street Journal highlighted the company's plight in a feature article titled: "Citi Weighs Its Options, Including Firm's Sale." It cites company executives considering the possibility of auctioning off pieces of the bank or selling it entirely after its worst ever percentage one-day drop in valuation. The board of directors will meet to decide what's next and may do what was "unthinkable only weeks ago." They must also deal with growing rumors that Citi is on the verge of bankruptcy and that Washington plans a takeover, AIG-style.

For now at least, a stopgap plan was announced on Sunday (November 23) for Washington to provide Citi with another $20 billion infusion and will guarantee as much as $306 billion of its troubled assets. The bank must absorb its first $29 billion in losses and 10% of others beyond that. The Treasury will assume the next $5 billion, the FDIC the next $10 billion, and the Fed will take the rest up to the agreed on amount. This may provide some temporary relief, but given the extent of Citi's problems, it may in the end be short-lived.

Growing numbers of other companies face similar problems or may in the months ahead. The auto giants are already insolvent and a hair's breath from bankruptcy or even oblivion. Other companies fear a similar fate. It's reflected in their sinking stock prices and bond yields, especially the junk variety. As reported in the Financial Times:

"Average yields on US junk bonds have topped 20 per cent for the first time (over 50% for GM debt) amid rising concerns about a protracted recession and a wave of corporate defaults." It could have a "dramatic impact on economic activity" by making debt prohibitively expensive. These issuers comprise nearly half the corporate bond market, according to S & P. "The yield on the benchmark Merrill Lynch US High-Yield index hit 20.81" topping its previous 18.66 January 1991 reading.

Even worse, the risk premium spread over Treasuries is nearly double what it was then when the benchmark 10-year bond yielded over 8%. Today, it's ranging between around 3.0 - 4.0%. Moody's sees 14% of corporate bonds defaulting - an all-time high figure since it began keeping records, and it's likely the number will rise as the global crisis deepens and companies start falling like tenpins.

Maybe US Treasuries also according to analyst Martin Hennecke of Bridgewater Ltd, Hong Kong. He told clients that "The US might really have to look at a default on the bankruptcy reorganization of the present financial system," and a corresponding government one is very possible.

"In the United States, there is already a funding crisis, and they will have to sell a lot more bonds next year to fund the bailout packages that have already been signed off." He added that to solve or stem the current crisis, America will have to radically reduce spending across the board and recall all its troops from around the world. As for a stimulus package, "there is not much of an industry left to stimulate back to life," he believes. Others agree and see depression ahead - not whether but when it will arrive.

Then there's Asia with Bloomberg reporting (on November 19) that: "Asian stocks fell, extending a global rout, as Japan's exports declined the most in almost seven years (7.7% from a year earlier) and US consumer prices sank by a record" raising the specter of deflation. One analyst described it as "the end of the world as we know it" in the worst ever global slump he's seen and "no region (able) to help (others)."

AFP in Tokyo said "Japan (officially in recession) reported a rare trade deficit in October." Exclusive of the slow holiday-affected January period, "it was the first red figure in 26 years" and a sign of more trouble ahead. In America also with JP Morgan Chase predicting that the Fed will cut interest rates to zero by January, hold them there throughout 2009, and other central banks will cut as well. But hold the cheers.

So far, monetary policy has been ineffective and little more than pushing on a string in a liquidity trap climate. Further, perception is everything at a time confidence is at record lows and shows no signs of stabilizing.

Once nominal rates hit zero, "the Fed has run out of ammo" except for what innovative tools it may use - such as buying toxic debt more aggressively and transferring it to its balance sheet in unheard of and reckless new ways.

One analyst weighs in on this possibility as follows: It's a desperation-driven "course of action that is not working (and) not a sign of intelligence....If Fed funds at 1% (and huge liquidity injections aren't) inducing banks to extend credit, a further reduction....won't have any impact" either, so why do it and maybe makes things worse.

It's why analyst Tim Duy calls Fed policy "adrift" in a November 20 commentary. He cites "a distinct lack of leadership and believes Bernanke "has used up his bag of tricks" and doesn't know what to do next. He calls recent Fedspeak "littered with confusing statements that leave the true policy of the Federal Reserve in question." For example, on interest rates, whether to lower them further or stand pat, and more debate on the target rate is "nothing more than academic masturbation."

That rate is a non-issue, and "policy needs to take a different direction....One can only conclude that Fed officials do not understand their own policies. Policy is adrift. Be afraid; be very afraid....Bernanke cannot elucidate a coherent policy strategy to his organization because no such strategy exists. What does exist is a potpourri of policy responses that amounts to providing liquidity at all costs....Beyond this, the Fed is stuck in a netherworld of dual policy targets - not ready to admit the loss of the interest rate target, not ready to adopt a formal policy of quantitative easing."

"I think it is high time some real critical attention was placed on Bernanke. How complicit was (he) with designing and implementing a clearly failed policy?" And while "Fed officials publicly debate the intent of their own policies, investor confidence is collapsing. Bernanke needs to step forward and define policy. We need to pressure him into providing that leadership - or (have him) step aside for someone else to do it."

It's a sign of the times that another analyst describes this way: America's problems "are trickling down from the top and devastating (people) at every level. A vicious cancer has materialized and every segment of the economy is suffering. Americans increasingly have nowhere to turn as funds dry up and unemployment skyrockets."

According to The New York Times (on November 20), even New York's shoeshine business is suffering. In Grand Central Terminal alone, one operator of five stands now gets 100 customers a day compared to 700 in good times. It's a "s(h)ign" of the times.

The World According to Paul Volcker

At a November Lombard Street Research conference in London he said: "What this crisis reveals is a broken financial system like no other in my life. (He's 81.) Normal monetary policy is not able to get money flowing. The trouble is that, even with all this (intervention and) protection, the market is not moving again....I don't think anybody thinks we're going to get through this recession in a hurry." Leading up to this has been "leveraging in the economy beyond imagination, and nobody was saying we need to do something....Alan (Greenspan) was not a big regulator."

It's now payback time, and according to economist Paul Ashworth, business spending is in "meltdown." And the same is true for maxed out consumers.

Market Watch columnist Paul Farrell sees depression ahead in 2011 and lists 30 reasons why. Here's a sampling:

-- America may lose its AAA credit rating; it already exists in name only;

-- growing numbers of companies need bailouts;

-- "Treasury sneaks corporate tax credits into bailout giveaway, shifts costs to states;"

-- sinking state revenues and rising debts signal trouble;

-- "state, municipal, corporate pensions lost hundreds of billions on derivative swaps;"

-- "consumer debt way up, now at $2.5 trillion; next area for credit meltdowns;"

-- Fannie Mae, Freddie Mac, AIG, the big banks and other companies are bleeding cash and want more taxpayer dollars;

-- bailout costs will be in the many trillions;

-- all asset classes are sinking and signal a global meltdown;

-- retailers are failing; "mall sales (are) in free fall;"

-- unemployment (is) skyrocketing; and

-- "government policy is dictated by 42,000 myopic, highly paid, greedy lobbyists" - exceeded only by Wall Street's level of greed and corruption.

Two Additional Shoes to Drop

The auto industry for one. They're so close to the edge that no amount of bailout may help, but consider the consequences of bankruptcy. The big three employ around 250,000 US workers and affect nearly three million others at suppliers, dealerships and other companies. Without this industry, unemployment will skyrocket to unimagined levels, and the economic fallout will be catastrophic - both at home and globally because these companies have foreign operations and America's problems resonate everywhere.

Alt.A loans are another issue, called by some "liar loans." Moody's recently warned about this less publicized part of the mortgage market, and they should. They've grown faster than subprime ones to borrowers with less than top credit.

Alt.A refers to people with A-rated credit who borrow with little or no verification of income, or so-called alternative documentation. They cut across all socio-economic lines, exist everywhere in the country, are in danger of imploding, and if it happens, they'll dwarf the subprime meltdown. Why so? Because they're higher-priced, higher-leveraged, and there are more of them.

In combination with so-called Jumbo Prime mortgages, over $1 trillion in residential mortgages are at risk - much of it on balance sheets of the nation's largest banks (including Citigroup, JP Morgan Chase and Bank of America) and another reason why their stock prices are plunging.

As of October, Alt.A delinquencies of at least 90 days averaged 20.3% for those originated in 2006. For 2007 ones, it's 17.5%. According to Moody's, prepayment rates are at historical lows (in the mid to high single digits) and are expected to remain depressed in light of credit tightness and declining home equity. Moody's stated:

"Given the lack of pool seasoning, cumulative losses have not yet risen as steeply as delinquencies. However, many pools are starting to show a sharp increase in the rate of loss realization. As the pace of liquidations has picked up, the performance data suggests worsening loss severities."

Moody's added that when Alt.A loans include an option adjustable-rate mortgage, delinquencies outpace pools without option-ARMS. The reason is because negative amortization results in weaker loan-to-values, and downgrades are certain to follow.

Corporate Director Resignations Increasing

It's another sign of the times and highlighted in the Wall Street Journal (November 21). The Journal states: "Departing board members cite too-frequent meetings and conference calls. (Thus) a small but growing number....are quitting or planning to quit corporate boards just when companies need them most."

They give the usual reasons, but not the more likely ones. Corporate directorships pay well for a limited amount of work - six-figure compensation, stock options, and various other benefits as well as gaining valuable interlocking relationships with other corporate officials.

So why give them up? Along with benefits comes liability at a time many companies are floundering. Growing numbers face potential insolvency, shareholder law suits, and other increasing downside uncertainties. Citing too little time is a smoke screen. Busy people are rarely too busy for things they feel are important. Avoiding unnecessary risk is one of them.

Gold - The Traditional Safe Haven in Troubled Times

On November 19, Market Watch.com reported that "Retail investors sharply increased their demand for gold bars and coins in the past few months as they struggled to find a safe place for their money amid the financial crisis...."

On the same date, a World Gold Council press release stated:

"Dollar demand for gold reached an all-time quarterly record of US $32 billion in the third quarter of 2008 as investors around the world sought refuge from the global financial meltdown, and jewelry buyers returned to the market in droves on a lower gold price. This figure was 45% higher than the previous record in Q 2 2008. Tonnage demand was also 18% higher than a year earlier."

Record demand is showing up at retail and in exchange traded fund (ETF) inflows. They were also offset by "inferred investment" outflows by hedge fund liquidations to raise cash for redemptions.

James Burton, World Gold Council's chief executive officer stated:

"Gold's universal role as a store of value has shone through during this quarter helping (to) attract investors and consumers to all forms of gold ownership. Looking forward, given the uncertainty that surrounds the global economy, gold's safe haven appeal should continue," but so will the speculative side of the gold market.

Earlier in the year, spot gold reached $1000 an ounce. The price then briefly fell below $700, remained in the low to mid-$700 range (until on November 21 it spiked to $800), and reasons cited are that institutional investors are selling desired assets to meet margin calls on weaker ones. Perhaps so, but much more is going on as well.

Markets are heavily manipulated, and gold among others are targeted. For the precious metal, it's to hold down its price to make dollars more attractive at a time it should be soaring and likely will looking ahead with some forecasts of it reaching extremely high valuations.

Noted analyst Richard Russell of Dow Theory Letters has his view on gold and its price action. He believes "one way or another, gold is being manipulated by certain sources. What group would least want to see (it) heading higher? My answer is the Fed. (It's) exploding the money supply. This would ordinarily foment inflation. Surging gold is a red flag that the public understands. The Fed is doing everything it can to hide the fact that it is devaluing the dollar via its" explosion of the money supply.

Russell believes that gold is in a primary bull market. The longer its price is artificially depressed, the "greater the bull forces within gold will struggle to express themselves."

Even now, the New York Post reported (on November 18) that "Governments Can't Handle (the) Global Run on Gold Coins....as people around the world are demanding so many of the valuable coins that government mints are having difficulty filling orders."

The US mint is allocating them to restrict supply. It increased its dealer price for a 10-ounce coin by 10% and one-ounce coins by 3%, and one dealer says that customers wanting 200 gold coins have to wait up to two weeks to get them. Six months ago they were available immediately. In addition, some dealers turn customers away, and those selling them demand a 10 - 15% premium over the Comex quoted price.

It hasn't curtailed demand and why not. Gold is a global thermometer that reflects monetary, political and economic stability as well as marketplace demand - for investment, jewelry, or as the ultimate hedge against uncertainty. When prices rise, it usually warns of trouble - geopolitical, inflation, deflation, the loss of confidence in fiat currency, or a possible looming depression so far not reflected in the metal's price, but watch out.

Gold's price may be resting for a time and is being artificially held down, but for how long. If conditions keep deteriorating and money creation remains too expansive, sooner or later gold may explode on the upside.

Petrodollar states may think so and are making large gold purchases. In November, Saudi investors bought $3.5 billion worth, reportedly as a safe haven at a time of crisis and falling oil prices. Reuters said that Iran is converting some of its $120 billion in foreign currency reserves to gold. Dubai dealers are running low on the metal as demand is high.

In China it hit 38.4 metric tons through September compared to 24 tons for all of 2007. Gold jewelry demand in China reached 241.6 tons through September compared to 302 tons in 2007 when jewelry demand grew by 26%. China is the world's second largest gold consumer.

On November 14, The Standard (based in Hong Kong) reported that "The mainland is seriously considering a plan to diversify more of its massive foreign-exchange reserves into gold (because of) fears about the long-term viability of parking most of (them) in US government bonds" at a time America's budget deficit and national debt are soaring.

Demand in India (the largest gold consuming market) is also growing (up 31% from Q 3 2007) at a time global gold mining production was 1133 tons in the first half of 2008 or 6% below the same 2007 period. Gold supply was down 9.7% over year-earlier levels due largely to significantly lower central bank sales. Those made under the Central Bank Gold Agreement (CBGA) totaled 357 tons in the year ending September 26 - the lowest annual figure since the first 1999 Agreement. Prices are falling, but Saudis and other Middle East investors are buying and for good reason.

World economic viability is sinking, and it's affecting oil prices. They've fallen around two-thirds from their all-time high, and producer states are worried. The Energy Information Agency projects that OPEC may earn $595 billion in 2009 - way down from its earlier $979 billion net 2008 revenues and lower that $671 in 2007.

So today's gold weakness and dollar strength may turn out to be a shorter-term phenomenon than many observers believe. The 10-year credit default swap (CDS) spread on US Treasuries provides a clue. The cost of insuring against a US government default is soaring, and it's happening to Britain and Germany as well. It's now many fold higher than in late summer, a cause for worry, and likely because markets are pricing in massive bailouts that may far exceed the current levels. In the US, it already hit $4.2 trillion, it's rising, and hinting at a possible future default or huge devaluation that's the same thing.

In this environment, gold may be the safest of all asset classes at a time none are safe, and no one can predict how bad things may get before they improve. What's likely, however, is that the road ahead will be painful, protracted, and unlike anything experienced before so all the old rules don't apply, and no one knows what, if anything, may work. This saga has a long way to run, and the path ahead is down.

Anonymous said...

Yes, APU, the OREO is MORE BUSH than BUSH, what the OREO is-is, is the SON that BUSH-II wish he had ( remember BUSH-I was a Nazi for real ), BUSH-II CIA directory, later prez, BUSH-III 'W' fucked up, and the OREO is going to fix the BUSH family problem, hello "New World Order".

...

A year ago, when Barack Obama said it was time to turn the page, his campaign declaration seemed to promise a fresh start for Washington. I, for one, failed to foresee Obama would turn the page backward. The president-elect's lineup for key governing positions has opted for continuity, not change. Virtually all of his leading appointments are restoring the Clinton presidency, only without Mr. Bill. In some important ways, Obama's selections seem designed to sustain the failing policies of George W. Bush.

Anonymous said...

Hey Kunts where do you think the $600M that OREO got to run came from? It came from the NY-FED bankers, so who the fuck do you think he would put in charge???

Will Timothy Geithner or Larry Summers advise the next president to face reality and throw in the towel? One hopes so, because Whalen warns: "By embracing Geithner, President-elect Obama is endorsing the ill-advised scheme to support AIG directed by Hank Paulson et al at Goldman Sachs and executed by Tim Geithner…. This scheme to stay AIG's resolution cannot possibly work and, when it does collapse, Barack Obama and his administration will wear the blame."

Anonymous said...

Hank Paulson et al at Goldman Sachs and executed by Tim Geithner…. This scheme to stay AIG's resolution cannot possibly work and, when it does collapse, Barack Obama and his administration will wear the blame

*

It is absolutely BRILLIANT that OR-BOMB-EO is MORE BUSH THAN BUSH.

He knows he's only one term besides, like APU posted above at $5TRILLION so far, this bailout it sum total bigger than ALL US government spending in world history. This is why better than CHENEY stealing a Billion in the name of Halliburton the old fashion way.

Let's NOTE right now that OREO is a crook. That OREO is putting the best crooks on the planet in his cabinet. No one can say .. "YOU can't spent a $5T, because they can say 'bush did'", ... We have now set a precedent that unlimited spending for any fucking thing is secret.

This is mind-boggling, and congress is fucking irrevelent. BUSH also proved another thing, that president was a MONARCHY, with absolute power, nobody needs congress, if the FED can shove $5T to its friends, e.g. anyone with the audacity to call themselves a 'bank holding company'.

My personal guess is that OREO is picking these people because they got away with stealing $5T, and OREO will himself steal another $5T, and in ensuing years it will be $50Trillion. The devaluation of the dollar will be such a fucking joke that it will not even be topical.

The real issue for the HBM's, and BP's of the USA is will the OREO given that he has the crooks working for HIM, will he funnel this money to liberal causes like health-care?? Or will 2009's $5T just go to NY Bankers??

Anonymous said...

The United States always hopes for the best and ends up with the worst. - Here's a good essay on Contemporary Problems and USA 'Good Intentions'

The Risk of Piracy, Chechen-Style
26 November 2008By Yulia Latynina

The Moscow Times welcomes letters to the editor. e-mail to oped@imedia.ru.


The events in the Gulf of Aden seem to be a microcosm of the contemporary world. Located between Yemen and Somalia, the Gulf of Aden is a vital artery of global shipping that feeds the Suez Canal. Every day, 250 ships of every kind -- giant tankers and container ships carrying everything from clothes to electronics -- transport $2 billion of goods through the gulf.

In the past weeks, the Gulf of Aden has turned into a maritime version of Chechnya. In the beginning of their struggle against Russia, Chechen insurgents were relatively benevolent, releasing captured Russian soldiers and even giving them money for the road home. But soon human trafficking turned into a prosperous business when insurgents received large ransoms for the release of captives.

Somali piracy is on the rise. The only weapons pirates need to do business are automatic rifles. Their communication equipment consists of crude walkie-talkies, and they gather intelligence by slipping $100 bills to corrupt Kenyan port official who tell them everything they need to know about potential targets. It is pure chaos, with the pirates high on drugs and the "mother ships" from which they launch their operations nothing more than souped-up washtubs.

The only positive trait of Somali pirates is that they are not bloodthirsty. There has not been a single instance of the pirates killing a hostage. They are more likely to shoot each other under the influence of narcotics than to slit the throats of their captive crews.

After seizing the Faina, a Ukrainian cargo ship, Somali pirates for the first time demanded a ransom for the cargo rather than the crew. Then, on Nov. 14, they pulled off a superheist when, for the first time in history, they captured a supertanker -- Saudi Arabia's Sirius Star. The only bigger prize left for the pirates is to seize is a giant container ship. Judging by how things are going, though, that day cannot be far off.

What can the West do in this situation? Not much. Burn Somali coastal villages? Sink the pirates' boats with heat-seeking missiles? This would be difficult since their vessels are indistinguishable from fishing boats.

What do the Islamic countries think about what is happening? They are deeply disturbed about the West's growing military presence in the region. Egypt, with control over the lucrative Suez Canal, knows that its economy will sink faster than the Titanic if ships are forced to use alternative routes.

What comes next? The pirates will become more Islamized, and it won't be long until pirates linked to an al-Qaida organization seize a container ship with $2 billion in freight. We will soon see a new version of both Chechnya and Afghanistan on the seaways.

Unfortunately, the global economy is helpless against the pirates, in the same way that an elephant can't effectively battle lice. Globalization has made many countries dangerously dependent on key transport routes now held hostage by pirates.

Humane standards also complicate the problem. The West simply can't get away with solving the piracy problem in the same ruthless and lawless fashion as Russia handles its Chechen problem.

The Islamic Courts Union, which held power in Somalia in 2006 until the United States kicked it out, was able to get rid of the pirates in a matter of weeks, just as the Taliban did with Afghan drug traffickers. Now pirates refer to the radical al-Shabab insurgency group, which controls many areas in the south of Somalia and has a good chance of taking control of the entire country, as the "defenders of the faith" and to Western ships in the Gulf of Aden as infidels and occupiers.

The United States always hopes for the best and ends up with the worst.

Anonymous said...

Another RUSSIAN jewel too sweet to pass up on the USA notion of HOPE.

Obama and the KGB
10 November 2008By Richard Lourie

I was arrested by the KGB in Stalin's hometown of Gori in March 1988. Six men interrogated me about my Russian-language skills, my lack of papers and my high-speed camera, but after several hours my explanation was accepted. Planning to write about Stalin, I wanted to see his childhood home, his school and his town. My passport was at the hotel in Tbilisi as Soviet law required, but I admitted to breaking another Soviet law -- not to leave the city where you were registered.

At the end, the leader said he wanted to ask one question about the U.S. primaries then under way and which included among other hopefuls, Jesse Jackson. He asked: "Is that negr going to be president?"

He had used the proper Russian word for a black person but had said it with worry and disdain. He could imagine nothing worse -- the United States revealed as a democracy not a hypocrisy.

Then I had the odd duty of delivering a brief talk on U.S. civics to a half a dozen KGB men. No, I said to their immense relief, the United States wasn't ready to elect a black president yet, it was still a little too soon for that.

But only 20 years too soon as it's now turned out.

On the day after Obama was elected president, Dmitry Medvedev gave his first state-of-the-nation speech and blamed the United States for most of Russia's problems -- from arming Georgia to causing the global financial crisis.

There are several things wrong with this approach. By blaming Washington for all his country's problems, Medvedev casts Russia as a passive victim that can at best react. It grants to the United States precisely what Russia fears it seeks: omnipotence.

The same rebuke Senator John McCain made to Obama can also be made to Medvedev. You're not running against George W. Bush. It was Bush's idea to place elements of a missile-defense system in Poland and the Czech Republic, and it was Bush and Vice President Dick Cheney who armed and encouraged Georgia.

It's not clear yet what sort of Russia policy Obama will conduct. He won't say much before the inauguration. And so it would have been a perfect time for Medvedev to seize the initiative and make a bold, innovative move to show that Russia was the master of its own fate and capable of "new thinking." But instead, he resorted to the language of threat, the old game of move and countermove.

It was clever to threaten to deploy missiles in Kaliningrad, near the Polish border. Now Medvedev has something to swap for the U.S. missile-defense system slated for Poland without having to give up anything in the Caucasus. He made a point of saying Russia would remain there.

What else could Medvedev have done? He could have taken a few plays from Obama's campaign and seen that words can be deeds and create real change. He could have sent Obama a warm-hearted, high-spirited greeting, saying that 2007 marked the 200th anniversary of U.S.-Russian relations, a perfect time for a new beginning. It would have cost Medvedev little and he would have gained in stature and created new possibilities for the relationship.

Hope and the future matter greatly in this new and youthful century. Obama embodies that spirit, while Medvedev's speech had a musty air about it.

Stalin's Foreign Minister Vyacheslav Molotov said the problem with free elections is that you never know who's going to win. The U.S. primaries and the 2008 election had all the high drama and breathless suspense of life itself. Obama's election was proof that anything is possible in a free country. A real election shames the sham. The day those six KGB men feared 20 years ago has come at last.

Anonymous said...

“We have only two things to say about Tim Geithner, who we do not know: A.I.G. and Lehman Brothers,” said Christopher Whalen of Institutional Risk Analytics. “Throw in the Bear Stearns/Maiden Lane fiasco for good measure,” he said.

“All of these ‘rescues’ are a disaster for the taxpayer, for the financial markets and also for the Federal Reserve System as an organization. Geithner, in our view, deserves retirement, not promotion.”

Ouch.

*

But guess what, he got promoted!! Who would have guessed??

Anonymous said...

This is a keeper for those interested in the USA.

Where Was Geithner in Turmoil?

NY-Times
By ANDREW ROSS SORKIN
Published: November 24, 2008

President-elect Barack Obama unveiled on Monday an economic team with deep experience handling economic crises. But does the man at the center of this star-studded cast, Timothy F. Geithner, the nominee for Treasury secretary, have what is needed to take the nation in a new financial direction?
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Jeff Haynes/Reuters

Timothy Geithner, Treasury secretary-designate, and Christina Romer, who will be the Council of Economic Advisers director.

That is what a number of Wall Street chieftains are quietly asking, even after the stock market surged with relief after his nomination.

One reason Mr. Obama gave for nominating Mr. Geithner was his “unparalleled understanding of our current economic crisis, in all of its depth, complexity and urgency.” More important, he suggested, “Tim will waste no time getting up to speed. He will start his first day on the job with a unique insight into the failures of today’s markets — and a clear vision of the steps we must take to revive them.”

Mr. Geithner is clearly a 47-year-old wonder boy.

A graduate of Dartmouth, he has a master’s degree from the Johns Hopkins School of Advanced International Studies, did a turn with Henry Kissinger’s consulting firm, a stint in the Clinton administration and, for the last five years, has been the president of the Federal Reserve Bank of New York.

He will effectively lead the team Mr. Obama has chosen to mend a crippled economy. That’s important because they won’t just be debating economic theory — they will be making deals Wall Street-style, negotiating billion-dollar bailouts and restructuring entire industries on behalf of their client, the taxpayers.

But Mr. Geithner’s involvement in several ultimately ill-fated efforts to buttress the American financial system is the very reason some Wall Street C.E.O.’s — a number of whom spoke on the condition of anonymity for fear of piquing the man who regulates them — question whether he’s up to the challenge.

“We have only two things to say about Tim Geithner, who we do not know: A.I.G. and Lehman Brothers,” said Christopher Whalen of Institutional Risk Analytics. “Throw in the Bear Stearns/Maiden Lane fiasco for good measure,” he said.

“All of these ‘rescues’ are a disaster for the taxpayer, for the financial markets and also for the Federal Reserve System as an organization. Geithner, in our view, deserves retirement, not promotion.”

Ouch.

“He was in the room at every turn of the crisis,” said another executive who participated in several such confidential meetings with Mr. Geithner. “You can look at that both ways.”

While Henry M. Paulson Jr., the current Treasury secretary, has taken a drubbing for the changeable nature of the government’s efforts to bolster the financial industry — some of which clearly contradicted each other — Mr. Geithner has managed, for the most part, to remain unscathed. He’s been widely praised as a bright, articulate out-of-the box thinker who is a bailout expert, to the extent anyone can truly be an expert at fast-changing emergencies.

Behind the scenes, Mr. Geithner was the point person for weeks of sleep-deprived Bailout Weekends. It was Mr. Geithner, not Mr. Paulson, for example, who put together the original rescue plan for the American International Group.

And, of course, Mr. Geithner also oversaw and regulated an entire industry whose decline has delivered a further blow to an already weakened American economy. Under his watch, some of the biggest institutions that were the responsibility of the New York Fed — Bear Stearns, Lehman Brothers, Merrill Lynch and most recently, Citigroup — faltered. While he was one of the first regulators to smartly articulate the potential for an impending disaster, a number of observers question whether he went far enough to stop the calamity.

Perhaps what has most people on Wall Street stirring is Mr. Geithner’s role in the fall of Lehman. At the time of its bankruptcy, he, along with Mr. Paulson, appeared to be the most vocal in supporting the government’s refusal to bail out the firm, according to people involved in various meetings. With hindsight, many in the financial industry blame a deepening of the global financial crisis on the government’s decision to let Lehman crumble.

Perhaps not surprisingly, there have been moves afoot in recent weeks by some in the New York Fed and Obama team to put distance between Mr. Paulson and Mr. Geithner, whose salary was $398,200 last year and who will take a pay cut to $191,300 in his new role.

These include the suggestion that Mr. Geithner was not in league with Mr. Paulson over Lehman; that Mr. Geithner pressed to save the firm from bankruptcy; that he was a lone voice on the subject and was overruled by Mr. Paulson and Ben S. Bernanke, the Fed chairman, on this issue.

The validity of this new claim is hard to verify. The New York Fed declined to comment.

Many executives suggest it may be a bit of revisionist history. “If that’s true, he did a good job of hiding it,” said one executive who spent the weekend at the New York Federal Reserve the weekend of Lehman’s fall.

Mr. Paulson has only praise for Mr. Geithner. “I have the highest regard for Tim — his judgment and creativity have been critical to designing and implementing the necessary actions we’ve taken to protect and strengthen our financial system,” he said.

Let’s hope he’s right.

LavaBear said...
This comment has been removed by the author.
Anonymous said...

http://www.youtube.com/watch?v=tNBX--B0Czw&ref=patrick.net

Anonymous said...

http://www.youtube.com/watch?v=tNBX--B0Czw&ref=patrick.net

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Please tell us WHY we should look at this shit?

Anonymous said...

http://da.thebrazzers.com/galleries/23/movies/02.mpg

patrick.net has it nailed this time.

LavaBear said...

An open letter from Keynes to Roosevelt in 1933.

LavaBear said...

Click on the Video and it's 30 minutes of Jim Rogers on Bloomberg last night

LavaBear said...

>>>patrick.net has it nailed this time.

Bruce you are huge...and black. You da man.

Anonymous said...

Funny how when someone posts a porno link here, the board goes silent for 2 hours.

Anonymous said...

The Rich Getting... Poorer, For Once!

[ There have been many 'high colonics' for the rich, the recession of 1898 comes to mind. ]


Lib's LOVE a good conspiracy.

[ A conspiracy requires secrecy, most of the SHEEEET associated with 'conspiracy' is public.

The Pug's also love their own conspiracy.

Malcolm-X (OBAMAS's WRIGHT MENTOR) back in the 1950's said it Best "WHITEY IS TOO FUCKING DUMB TO RULE THE WORLD"

Some heavy shit, and today Whitey(USA) is proving 'X' Right!!!!!!!!

Anonymous said...

The following is an abridged text of an open letter [PDF] by John Maynard Keynes to the US president.

Dear Mr President,

You have made yourself the trustee for those in every country who seek to mend the evils of our condition by reasoned experiment within the framework of the existing social system. If you fail, rational change will be gravely prejudiced throughout the world, leaving orthodoxy and revolution to fight it out. But if you succeed, new and bolder methods will be tried everywhere, and we may date the first chapter of a new economic era from your accession to office. This is a sufficient reason why I should venture to lay my reflections before you, though under the disadvantages of distance and partial knowledge.

At the moment your sympathisers in England are nervous and sometimes despondent. We wonder whether the order of different urgencies is rightly understood, whether there is a confusion of aim, and whether some of the advice you get is not crack-brained and queer. If we are disconcerted when we defend you, this may be partly due to the influence of our environment in London. For almost everyone here has a wildly distorted view of what is happening in the United States. The average City man believes that you are engaged on a hare-brained expedition in face of competent advice, that the best hope lies in your ridding yourself of your present advisers to return to the old ways, and that otherwise the United States is heading for some ghastly breakdown. That is what they say they smell. There is a recrudescence of wise head-waging by those who believe that the nose is a nobler organ than the brain. London is convinced that we only have to sit back and wait, in order to see what we shall see. May I crave your attention, whilst I put my own view?

You are engaged on a double task, recovery and reform - recovery from the slump and the passage of those business and social reforms which are long overdue. For the first, speed and quick results are essential. The second may be urgent too; but haste will be injurious, and wisdom of long-range purpose is more necessary than immediate achievement. It will be through raising high the prestige of your administration by success in short-range recovery, that you will have the driving force to accomplish long-range reform. On the other hand, even wise and necessary reform may, in some respects, impede and complicate recovery. For it will upset the confidence of the business world and weaken their existing motives to action, before you have had time to put other motives in their place. It may over-task your bureaucratic machine, which the traditional individualism of the United States and the old "spoils system" have left none too strong. And it will confuse the thought and aim of yourself and your administration by giving you too much to think about all at once.

My second reflection relates to the technique of recovery itself. The object of recovery is to increase the national output and put more men to work. In the economic system of the modern world, output is primarily produced for sale; and the volume of output depends on the amount of purchasing power, compared with the prime cost of production, which is expected to come on the market. Broadly speaking, therefore, and increase of output depends on the amount of purchasing power, compared with the prime cost of production, which is expected to come on the market. Broadly speaking, therefore, an increase of output cannot occur unless by the operation of one or other of three factors. Individuals must be induced to spend more out of their existing incomes; or the business world must be induced, either by increased confidence in the prospects or by a lower rate of interest, to create additional current incomes in the hands of their employees, which is what happens when either the working or the fixed capital of the country is being increased; or public authority must be called in aid to create additional current incomes through the expenditure of borrowed or printed money. In bad times the first factor cannot be expected to work on a sufficient scale. The second factor will come in as the second wave of attack on the slump after the tide has been turned by the expenditures of public authority. It is, therefore, only from the third factor that we can expect the initial major impulse.

Now there are indications that two technical fallacies may have affected the policy of your administration. The first relates to the part played in recovery by rising prices. Rising prices are to be welcomed because they are usually a symptom of rising output and employment. When more purchasing power is spent, one expects rising output at rising prices. Since there cannot be rising output without rising prices, it is essential to ensure that the recovery shall not be held back by the insufficiency of the supply of money to support the increased monetary turn-over. But there is much less to be said in favour of rising prices, if they are brought about at the expense of rising output. Some debtors may be helped, but the national recovery as a whole will be retarded. Thus rising prices caused by deliberately increasing prime costs or by restricting output have a vastly inferior value to rising prices which are the natural result of an increase in the nation's purchasing power.

The set-back which American recovery experienced this autumn was the predictable consequence of the failure of your administration to organise any material increase in new loan expenditure during your first six months of office. The position six months hence will entirely depend on whether you have been laying the foundations for larger expenditures in the near future.

I am not surprised that so little has been spent up-to-date. Our own experience has shown how difficult it is to improvise useful loan-expenditures at short notice. There are many obstacle to be patiently overcome, if waste, inefficiency and corruption are to be avoided. There are many factors, which I need not stop to enumerate, which render especially difficult in the United States the rapid improvisation of a vast programme of public works. But the risks of less speed must be weighed against those of more haste.

The other set of fallacies, of which I fear the influence, arises out of a crude economic doctrine commonly known as the quantity theory of money. Rising output and rising incomes will suffer a set-back sooner or later if the quantity of money is rigidly fixed. Some people seem to infer from this that output and income can be raised by increasing the quantity of money. But this is like trying to get fat by buying a larger belt. In the United States to-day your belt is plenty big enough for your belly. It is a most misleading thing to stress the quantity of money, which is only a limiting factor, rather than the volume of expenditure, which is the operative factor.

It is an even more foolish application of the same ideas to believe that there is a mathematical relation between the price of gold and the prices of other things. It is true that the value of the dollar in terms of foreign currencies will affect the prices of those goods which enter into international trade. In so far as an over-valuation of the dollar was impeding the freedom of domestic price-raising policies or disturbing the balance of payments with foreign countries, it was advisable to depreciate it. But exchange depreciation should follow the success of your domestic price-raising policy as its natural consequence, and should not be allowed to disturb the whole world by preceding its justification at an entirely arbitrary pace. This is another example of trying to put on flesh by letting out the belt.

These criticisms do not mean that I have weakened in my advocacy of a managed currency or in preferring stable prices to stable exchanges. The currency and exchange policy of a country should be entirely subservient to the aim of raising output and employment to the right level. But the recent gyrations of the dollar have looked to me more like a gold standard on the booze than the ideal managed currency of my dreams.

You may be feeling by now, Mr President, that my criticism is more obvious than my sympathy. Yet truly that is not so. You remain for me the ruler whose general outlook and attitude to the tasks of government are the most sympathetic in the world. You are the only one who sees the necessity of a profound change of methods and is attempting it without intolerance, tyranny or destruction. You are feeling your way by trial and error, and are felt to be, as you should be, entirely uncommitted in your own person to the details of a particular technique. In my country, as in your own, your position remains singularly untouched by criticism of this or the other detail. Our hope and our faith are based on broader considerations.

If you were to ask me what I would suggest in concrete terms for the immediate future, I would reply thus.

In the field of domestic policy, I put in the forefront, for the reasons given above, a large volume of loan-expenditures under government auspices. It is beyond my province to choose particular objects of expenditure. But preference should be given to those which can be made to mature quickly on a large scale, as for example the rehabilitation of the physical condition of the railroads. The object is to start the ball rolling. The United States is ready to roll towards prosperity, if a good hard shove can be given in the next six months.

I put in the second place the maintenance of cheap and abundant credit and in particular the reduction of the long-term rates of interest. The turn of the tide in great Britain is largely attributable to the reduction in the long-term rate of interest which ensued on the success of the conversion of the War Loan. This was deliberately engineered by means of the open-market policy of the Bank of England. I see no reason why you should not reduce the rate of interest on your long-term government bonds to 2.5% or less with favourable repercussions on the whole bond market, if only the Federal Reserve System would replace its present holdings of short-dated Treasury issues by purchasing long-dated issues in exchange. Such a policy might become effective in the course of a few months, and I attach great importance to it.

With these adaptations or enlargements of your existing policies, I should expect a successful outcome with great confidence. How much that would mean, not only to the material prosperity of the United States and the whole World, but in comfort to men's minds through a restoration of their faith in the wisdom and the power of government!

With great respect,
Your obedient servant

JM Keynes

Anonymous said...

The Keynes Prescription is exactly the Remedy for DOT-COM, and 911, and that caused the RE-BUBBLE.

So now spend-spend and create a super mother MOFU bubble, ... right ...

The trouble is eventually the Piper has to be paid, and the debt will soon be Billions of dollars per person, a laughable figure.

Anonymous said...

Oregon bank stocks drift while investors remain on sidelines
Uncertainty - Most shares sit at less than half of their year-ago values

Wednesday, November 26, 2008
JEFF MANNING
The Oregonian Staff

After tanking this summer, most Oregon bank stocks continue to languish this fall, reflecting broad investor uncertainty over the fate of the financial sector.

Columbia Bancorp closed Tuesday at $2.23 a share, a 52-week low. A year ago, the stock was $17.14 a share.

Columbia and other Oregon banks have been hurt by their relatively heavy exposure to construction and development loans, which have defaulted in significant numbers with the crash of the residential real estate sector.

West Coast Bancorp's stock closed Tuesday at $5.10 a share, up from as low as $3.68 during Friday's trading. A year ago, the Lake Oswego bank's stock traded for $13.49.

Similarly, Cascade Bancorp, parent of Bank of the Cascades in Bend, finished Tuesday at $7 a share, less than half the $16.61 of a year ago.

Columbia, parent of Columbia River Bank of The Dalles, expanded in recent years into Portland, Vancouver and central Oregon. The bank has exited the mortgage business and hired a new CEO and CFO.

Stock analyst Chris Stulpin, with D.A. Davidson in Lake Oswego, predicted that commercial real estate loans could join residential real estate as a trouble spot for local banks. Until now, commercial real estate has been relatively immune to the problems brought on by residential overbuilding, shoddy mortgage loan underwriting and housing depreciation.

Commercial real estate "could be the next big bucket of problems," said Stulpin .

David Tatman, administrator of Oregon's Division of Finance and Corporate Securities, voiced confidence in the state's banks, which he termed "solid and functioning well."

Tatman added that the challenging times will continue. "We're not anywhere near out of this economic trouble," he said. "It's still moving forward."

Of the 22 banks examined by state regulators during the past year, 10 received a composite score that was "less than satisfactory." By comparison, for the same period a year earlier, only two state-chartered banks received such a rating.

Anonymous said...

This is one of the more interesting regional story's, for months this guy had gone berserk, but had threatened to fire everyone in the police dept in Redmond, which he is the manager. He can even fire the police chief. After weeks and weeks of drunkenness, DUI's, disorderly public conduct, ... finally somebody got the bright idea to have the County Sheriff arrest his ass.

Yes, he has a 'personal situation', if anybody else went on a two week rampage they would go to jail, but in this case Little Garzini get's a get out of jail free card.

Bar fights, all out hell for weeks, and of course everyone in Redmond was terrified of losing their job in this economy. So nobody would touch mr-untouchable. In the below story of course the BULL portrays Mr. Perfect as a victim.



Redmond official arrested in assault
City Manager Mike Patterson not yet charged, taking 2-week leave

By Patrick Cliff / The Bulletin
Published: November 18. 2008 4:00AM PST
Mike Patterson

Redmond City Manager Mike Patterson was arrested on Sunday on suspicion of assault and menacing at a Redmond home.

Patterson, who has been with the city since 2004, began two weeks vacation Monday, Redmond Mayor-elect George Endicott said Monday.

Rather than the Redmond Police Department handling the case, the Deschutes County Sheriff’s Office is investigating because Patterson, 41, is a Redmond city executive, according to Endicott. The Deschutes County district attorney has not yet filed charges.

“I know he has a personal situation, and it’s up to him to deal with it,” Endicott said. “It’s not a city issue. It’s a personal and private one.”

Endicott said he was not worried about the city’s management and how Patterson’s absence could affect it because Assistant City Manager Sharon Harris will act as city manager during Patterson’s leave.

Patterson told city leaders this morning that he would take time off, according to Endicott.

“He just said, ‘I’m going to take vacation and deal with this,’” Endicott said.

Patterson did not respond to two messages left on his cell phone.

Endicott and City Councilor Joe Mansfield both said the city leadership supported Patterson. They each mentioned that he had recently received a positive job review.

“It’s a shock to me, of course,” Mansfield said. “I’ve got to think the man is innocent until proven guilty.”

The victim reported the alleged assault — which reportedly occurred sometime before the weekend — at about 3 a.m. Sunday morning, according to Capt. Tim Edwards of the Sheriff’s Office. Patterson was not at the Redmond residence until later in the day. The Sheriff’s Office arrested him at about 8 p.m., Edwards said.

Patterson was arrested on suspicion of fourth-degree assault. That charge requires that the assault victim is either a relative or domestic partner and that the victim was injured. There was also at least one child present during the alleged assault, so the charge is elevated to a felony.

Patterson was also arrested on suspicion of menacing, a misdemeanor.

Edwards said he did not know if the victim sought treatment for any injuries.

Oregon state law requires that law enforcement officials make an arrest when there is evidence of a domestic assault.

The days making up Patterson’s two-week leave are paid vacation days that Patterson has accrued, according to Harris, also the human resources director for the city. She did not know whether or not Patterson had scheduled his days off before Monday.

“We’ve been trying to get him out on vacation,” Harris said. “If you don’t take it, you could lose some.”

According to Patterson’s contract, he can be fired for violating the city’s employee handbook. Employees can be fired for a number of reasons, without notice. One of those is being convicted of a crime involving “moral turpitude.”

Endicott said the city hadn’t considered that possibility.

“We haven’t gone that far yet,” Endicott said. “I mean, you know this happened yesterday. It’s just too hard to try and speculate what could possibly happen a month, six months, a year from now.”

Patterson was released on bail on Sunday. His trial date is set for Nov. 28, according to jail officials.

Anonymous said...

Patterson was released on bail on Sunday. His trial date is set for Nov. 28, according to jail officials.

*

Patterson was bailed out by his buddy the Redmond Fire Chief, nobody else would even come and make bail for him.

Is the BULL not the best fucking toilet wrap in Orygun?

I love the BULL!!!

Anonymous said...

Here's a scary fucking story that could be BEND-OR. In this case a PA town is selling derivatives on a BET, that interest rates will be kept low, a sweet money to make money NOW just like BUFFET, trouble is what if they BET wrong? I sure to HELL hope that KUNTS are watching our CITY/COUNTY closely, and they're not doing this SHEET. How fucking fast can you lose money? If & when OREO does a VOLCKER (20% rates), and HE will, cuz that is the ONLY way to bring dim back to da dollar.

***

Deutsche Bank Swap Lures County as Budgets Crumble (Update1)

By Martin Z. Braun

Nov. 26 (Bloomberg) -- As Wall Street’s biggest banks run away from derivatives, Dauphin County, Pennsylvania, home of the state capital, Harrisburg, is embracing them.

The three-member county commission voted in August to approve two “range accrual swaps” with Deutsche Bank AG, according to minutes of the meeting. The interest-rate swaps, which involve $42 million of fixed-rate debt, guarantees Dauphin County $816,000 the first year and then wagers taxpayers’ money that short-term interest rates beginning in September 2009 won’t exceed 7 percent. Those rates are 2.2 percent now.

“It’s a way for us to raise revenue for the county,” said Chad Saylor, chief of staff to the county commission. “The only source of revenue we have, much like the school districts here, is the property tax.”

The commission’s decision shows the appeal of derivatives, even as states, cities and counties reel from misplaced bets on them. It also illustrates the lure of easy money at a time when municipal finances are deteriorating and the market for interest-rate swaps is under a federal criminal investigation into whether Wall Street banks conspired to overcharge local governments on the contracts.

Florida’s Miami-Dade County paid about $75 million in July to terminate a swap on its water and sewer bonds after the credit rating of an insurer guaranteeing the debt was cut. It plans to pay an additional $40 million to $50 million, following a refinancing this month. New York paid $44.6 million as of Sept. 30 to unwind swaps after they failed to protect the state when the interest on auction-rate securities surged.

‘Seen Enough’

“Haven’t we seen enough?” said Steve Goldfield, a senior managing director at Public Resources Advisory Group in Media, Pennsylvania, a financial adviser to state and local governments. “If everything works perfectly, it might be an OK idea. But usually, everything doesn’t work perfectly.”

Dauphin Commission Chairman Jeff Haste didn’t return requests for comment. Losses on debt payments the county would incur if short-term rates rise above 7 percent, which have happened 20 percent of the time the past quarter century, would be counteracted by higher yields on the county’s cash investments, which total $110 million, said Jay Wenger of Harrisburg-based Susquehanna Group Advisors Inc., the county’s swap adviser.

‘Saw the Benefits’

“We really view them as kind of offsetting in that kind of high-rate environment where the swap value starts to deteriorate, but your cash portfolio would improve in terms of interest income,” Wenger said at the Aug. 20 meeting, minutes show.

County commissioners “weighed the risks and saw the benefits,” Saylor said.

Swaps are private agreements, meaning no comprehensive data exists on how many municipalities are involved in the almost $400 trillion interest-rate derivatives market or the total paid to exit the contracts. A review of Pennsylvania Department of Community and Economic Development records shows that at least 185 school districts, towns and counties in the state have entered into derivatives deals with Wall Street since 2003, when state law was changed to explicitly allow the trades.

Derivatives are contracts whose value is derived from assets including stocks, bonds, currencies and commodities, or from events such as changes in interest rates or the weather. In a swap, parties agree to exchange interest payments, usually a fixed payment for one that varies based on an index.

Upfront Cash

Public agencies may benefit by using interest-rate swaps to lower borrowing costs or lock in rates for future bond sales.

Governments may use swaps as a way to generate upfront cash, an attractive feature at a time when the recession is eating into municipal finances. At least 31 states and District of Columbia face a combined budget shortfall of $24 billion this fiscal year, the Center on Budget and Policy Priorities in Washington said Nov. 12. The estimate on Oct. 10 was $8.9 billion.

Pennsylvania’s Adams County, home of Gettysburg, sold Charlotte, North Carolina-based Wachovia Corp. an option on a swap in June, according to the state’s economic development department. The “swaption,” which works in favor of the municipality if interest rates rise, allowed Adams County to pocket $1.1 million.

Mountain States Health Alliance did a $25.3 million “total return swap” this year with Merrill Lynch & Co. The derivatives increased liabilities at the 1,700-bed hospital system in eastern Tennessee, bordering the Appalachian Mountains, by $79.6 million as of the end of June, according to its audited financial statements. The swap boosted the hospital’s assets by $96,000, the documents said.

Betting on Bonds

The agreement calls for Mountain States to pay Merrill interest based on a short-term municipal bond index through 2012 on the $25.3 million, which is the amount of bonds the hospital has outstanding from debt issued in 2001. In return, the hospital receives interest of 6.25 percent. If the value of the bonds fall, the hospital will have to pay Merrill the difference between the price of the securities at the time the swap was agreed upon and when it is terminated. Should the bonds rise, Merrill pays.

Mountain States Health Alliance Chief Financial Officer Marvin Eichorn and Adams County Chairman George Weikert didn’t return calls seeking comment.

“We’ve got to get municipalities out of managing their interest-rate risk based on their view of the world,” said Robert Brooks, the Wallace D. Malone Jr. endowed chair of financial management at the University of Alabama, Tuscaloosa. “If they can’t explain clearly to their constituencies what they’re doing, perhaps the transaction fails the explainability test and shouldn’t be done.”

Alabama Bankruptcy

In Alabama’s Jefferson County, home of Birmingham, rising interest costs on more than $3 billion in adjustable-rate sewer bonds combined with wrong-way bets on swaps is threatening to produce the biggest municipal bankruptcy since Orange County’s default in 1994. Governor Bob Riley is negotiating with JPMorgan Chase & Co. and the county’s bond insurers to restructure the debt and swaps.

Attending the Dauphin County meeting where the swap arrangement was approved were Deutsche Bank municipal derivatives salesmen Doug Goldberg and Sam Gruer, the minutes show.

The Justice Department informed Gruer in November 2007 that he is a target in a federal criminal investigation of the municipal derivatives market, according to Financial Industry Regulatory Authority records. Gruer, who stopped working for Deutsche Bank in September, denies wrongdoing, the records show.

Two-Year Probe

About 30 banks, brokers and insurance companies have been subpoenaed in the two-year probe, and at least nine individuals have disclosed they’re targets of the investigation. On Sept. 3, JPMorgan, a former Gruer employer, shut down the unit selling debt derivatives to municipalities.

Dauphin County commissioners were aware that Gruer was under investigation, Wenger said in an interview. “We don’t have any evidence of any wrongdoing by anyone at Deutsche Bank,” he said.

Frankfurt-based Deutsche Bank received about $260,400 for the two swaps, according to the county. Michele Allison, a Deutsche Bank spokeswoman, declined to comment.

The terms of Dauphin County’s swaps -- one $30.7 million, the other $11.1 million -- guarantee a profit for the municipality in the first year. Firms such as Deutsche Bank are willing to provide such terms because they can profit by hedging the risk of the contracts with other parties. They also get fees for arranging the transactions.

$816,000 Payment

From September 2008 through September 2009, the county pays Deutsche Bank the three-month London interbank offered rate. In exchange, Deutsche Bank will give the county three-month Libor plus a fixed percentage, guaranteeing the county about $816,000.

Beginning September 2009 and lasting until the swaps mature in 2018 and 2023, the county makes money if short-term floating rates stay below 7 percent; loses if they exceed 7 percent. Three-month Libor is forecast to be 1.72 percent in the third quarter of 2009, according to the weighted average estimate of 24 economists surveyed by Bloomberg. It was 2.18 percent today.

On the $30.7 million swap, the county will pay Deutsche Bank three-month Libor through 2018. Deutsche Bank will pay the county three-month Libor plus 1.71 percentage points times a ratio. The ratio is determined by the number of days three-month Libor is less than or equal to 7 percent in a specified period divided by the number of calendar days in the period.

On the $11 million swap, beginning Sept. 1, 2009, and ending in 2023, the county pays three-month Libor and receives the same formula from Deutsche Bank, except the fixed spread is 2.62 percent instead of 1.71 percent.

‘Speculative Trade’

“It’s a purely speculative trade. It’s not a real hedge,” said Andrew Kalotay, chief executive officer of New York-based Andrew Kalotay Associates Inc., which advises corporations, federal agencies and municipalities on debt management. “You know how volatile it is. Why do you need to make that bet?”

Since its inception in 1984, three-month Libor has exceeded 7 percent about 20 percent of the time, including all of 1985, 1989 and 1990, according to data compiled by Bloomberg. This year, three-month Libor ranged from a low of 2.13 percent Nov. 12 to a high of 4.82 percent on Oct. 10.

Anonymous said...

http://tinyurl.com/69w2bv

I went to council last night, and had my buddy record the session.

Like he says a picture is worth a thousand words.

Bruce said...

http://tinyurl.com/69w2bv

I went to council last night, and had my buddy record the session.

Like he says a picture is worth a thousand words.

bruce said...

From my last comment on the old post comments (no, I wasn't the last, that's BP wanna be):

Check this out, employment in Bend Area:

http://tinyurl.com/69w2bv

Interesting. BEBB is looking good, as are several heartland areas and lube/gas areas.

Anonymous said...

“We’ve got to get municipalities out of managing their interest-rate risk based on their view of the world,” said Robert Brooks, the Wallace D. Malone Jr. endowed chair of financial management at the University of Alabama, Tuscaloosa. “If they can’t explain clearly to their constituencies what they’re doing, perhaps the transaction fails the explainability test and shouldn’t be done.”


*

No what you have is drunks in Redmond like Patterson, or retards cavers in Bend like Eric King.

'Gambling', that is all you have. This is going to go down, and hard.

At $500 Trillion outstanding there isn't enough bail-out money on earth to cover all these bad bets, even if they could get bailed out.

Secret Executives Sessions is that which enables ALL THIS SHIT.

Anonymous said...

The entire credit-derivative game today is to INSURE all debt. Trouble is the 'insurance company' must have assets, or a payer to pay the claim.

The city's and county's take the premium on a 'bet'.

They take the premium upfront as cash which makes them look cool, and on the books as an asset.

Trouble is when they bet wrong the local government gets wiped out. Corporations and banks get a commission, all bad debt gets insured, and city's get cash-flow.

But like LEHMAN every once in awhile the unthinkable happens, and nobody can pay the claim.

Given that this SHIT is just the tip of the iceberg, its ONLY going to get worse for years go come.

The USA is addicted to Friedman/Johnson Accounting.

tim said...

We all know how portfolio insurance ends. Buster is right. This is like a big case of portfolio insurance.

Great book: "A Demon of our own Design" by Richard Bookstaber. The author was a risk-manager who was _partially_ responsible for implementation of portfolio insurance and other financial debacles. The message of the book (which I think I mentioned last year before the shit really hit the fan) is that our risk management is laughable and we need to de-leverage, de-leverage, de-leverage.

A little late now, obviously. But it's interesting to read the people who KNEW inside and out just how bad things were. He got scant media attention when the book came out. People didn't want to hear it.

Anonymous said...

Apu,

That's hardly the point most US city's & county's today ARE ONLY FUCKING ALIVE cuz they're writing policy's for insurance they can't pay.

Like I rhetorically said earlier about 4AM this AM, right now the average US citizen owes MILLIONS, in federal, state, county, local debt.

If & when there is ever a war, and we lose, and we will, the victor is going to be completely cleaning out the accounts of ALL, including those that didn't play.

Anonymous said...

In this fucking day & age, what is the point of an INVISIBLE BLOG????


HOMER/DUNC,

Since you both the SAME,

And you be the ONLY BLOG KUNTS in BEND that still have NOT disabled the NO-FOLLOW.

It really irks me that bendbubble.blogspot.com & bendbubble3.blogspot.com shows up on all google searches, but bendbubble2.blogspot.com is invisible to the world.

Over SIX MONTHS ago we demanded you dumb fucking kunts fix your sites, and we explained how.

I have always thought you two to be the same, you sure do the same shit.

There are only two possible reasons you have not removed the no-follow.

1.) That you think since the 'man' enabled it that they love you cuz you leave it disabled.

2.) Your so fucking dumb that as soon as you disabled it, you went back and re-enabled it.

Please remove the fucking no-follow template from these blogs so that GOOGLE can find this shit about bend-oregon.

In this fucking day & age, what is the point of an INVISIBLE BLOG????

bruce said...

Well I followed buster's advice, and refused to leave city council last night during executive session.

They had me arrested and this AM trudi made bail.

Buster I hate you.

LavaBear said...

>>>They had me arrested and this AM trudi made bail.

You serious Bruce? How much was bail? I'll chip in. Did they at least feed you?

Anonymous said...

That's another fake bruce.

Anonymous said...

Fueled by pressure from COBA, COB will try and slip through code change at planning commission meeting on 12/8 to allow projects to get extended forever and a day due to economic conditions. This means that projects that barely made sense during the "good times" will get a reprieve and can be resurrected years later without community input to determine if they still make sense or are compatible with surrounding neighborhoods. Voice your disgust w/ COB planning division by 12/1 to be heard at meeting on 12/8.

Anonymous said...

Another one for the RIP column:

Vernon C Palmer
Palmer Homes
6 NODs on 11/26
5 in Crosswinds

http://www.palmerhomes.com/communities/Crosswinds/Community_Map/

Lots 1, 2, 26, 27 and 29. The 5 built homes that haven't sold.

Anyone been out there to see if others are started, or are they bare lots?


Happy Thanksgiving

Anonymous said...

why is it that local government try's to act like federal government? the big difference is the locals can't create money to fund.

Anonymous said...

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

Anonymous said...

http://www.youtube.com/watch?v=pBAwB5CyKKU&feature=related

Anonymous said...

not a good idea linda johnson to replace chris tefler. And we speak for the majority of the people.No matter how political it really is a bad idea.

bruce said...

Re: You serious Bruce? How much was bail? I'll chip in. Did they at least feed you?

###

No, that's the wanna-be-BP, LB. I'm over in Utah at the in-laws for the holidays, and missed the CC meeting. I haven't posted much in the last couple of days.

Thanks for the offer, though--but I hope I never have to take you up on it :)

If in doubt, click on my name to see the bio, and you can figure out who's who. I must be ruffling some feathers.

Actually, skimming the comments, there now seems to be two wanna-be-BPs...

HST--when the going gets wierd, the wierd turn pro.

Anonymous said...

Looks like the appointment may get waived for Johnson, as we may all be guessing with Friedman gone, her Cascade Book-keeping is imploding and needs her 24/7.

Thank God.

Had Friedman not died, and even though she got voted out, she would have got brought back in for Telfers seat, but with Friedman gone, she can't even though she wants to. This update from today. It's still her's if she wants it, as Telfer will pass it over to her, but she simply can't afford to let her business die.

bruce said...

http://tinyurl.com/6pkxnh

I have turned Pro.

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